Do Wellness Programs Reduce Medical Costs?

Topics: Health care, Medicine, Propensity score Pages: 13 (2576 words) Published: April 24, 2014
INQUIRY: The Journal of Health Care
Organization, Provision, and Financing
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Do Workplace Wellness Programs Reduce Medical Costs? Evidence from a Fortune 500 Company
Hangsheng Liu, Soeren Mattke, Katherine M. Harris, Sarah Weinberger, Seth Serxner, John P. Caloyeras and Ellen Exum
INQUIRY 2013 50: 150
DOI: 10.1177/0046958013513677
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INQXXX10.1177/0046958013513677INQUIRYLiu et al.

Research Paper

Do Workplace Wellness
Programs Reduce Medical Costs?
Evidence from a Fortune 500
Company

INQUIRY: The Journal of Health Care
Organization, Provision, and Financing
50(2) 150­–158
© The Author(s) 2013
Reprints and permissions:
sagepub.com/journalsPermissions.nav
DOI: 10.1177/0046958013513677
inq.sagepub.com

Hangsheng Liu, PhD1, Soeren Mattke, MD, DSc1,
Katherine M. Harris, PhD2, Sarah Weinberger, MBA, MPH3,
Seth Serxner, PhD4, John P. Caloyeras, MPhil5, and Ellen Exum6

Abstract
The recent passage of the Affordable Care Act has heightened the importance of workplace wellness programs. This paper used administrative data from 2002 to 2007 for PepsiCo’s self-insured plan members to evaluate the effect of its wellness program on medical costs and utilization. We used propensity score matching to identify a comparison group who were eligible for the program but did not participate. No significant changes were observed in inpatient admissions, emergency room visits, or per-member per-month (PMPM) costs. The discrepancy between our findings and those of prior studies may be due to the difference in intervention intensity or program implementation. Keywords

Workplace, Wellness program, Medical cost, Evaluation

Workplace wellness programs have become
increasingly popular in the United States in
recent years, with the expectation that these programs can promote employee health, reduce medical costs, and improve productivity.
According to the annual survey of employer
health benefits by the Kaiser Family Foundation,
51 percent and 39 percent of employers offered a
wellness program in 2009 and 2010, respectively
(Kaiser Family Foundation 2010, 2011). Among
employers with two hundred or more workers,
about 90 percent offered a program in both 2009
and 2010. Although wellness programs are
widely available to employees, participation is
relatively limited. A recent survey by the National
Business Group on Health showed that only 38
percent of surveyed employers offering a health
risk assessment (HRA) achieved a participation
rate of greater than 50 percent for the HRA, a

questionnaire on employee health behavior,
health risk factors, and health status (Nyce 2010).
Among eligible employees, two-thirds of the
employers reported a participation rate of less
than 20 percent for smoking cessation programs,
and more than half of the employers had a rate of
less than 20 percent for weight management.

1

RAND Corporation, Boston, Massachusetts, USA
RAND Corporation, Arlington, Virginia, USA
3
University of California, Berkeley, California, USA
4
OptumHealth, Golden Valley, Minnesota, USA
5
Pardee RAND Graduate School, Santa Monica, California,
USA
6
PepsiCo. Inc, Purchase, New York, USA
2

Corresponding Author:
Hangsheng Liu, RAND Corporation, 20 Park Plaza, Suite
920, Boston, MA 02116, USA.
Email: hliu@rand.org...
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