Wellness programs are all welland good as long as employers understand why they are paying forthem and what outcomes they can realistically expect.

One thing they shouldn't expect: saving a lot of money onhealthcare benefits for employees.

That's what the RAND Corp. concluded after reviewing wellnessprograms at eight companies. Seven of those that participated inthe study (representing 600,000 employees) provided recent data toRAND, while the eighth, a Fortune 100 employer, provided a decadeof data for RAND to sift through.

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These employers attempted to manage healthcare costs andemployee health in two ways: via wellness programs that focused onhelping employees with lifestyle issues (smoking and obesity beingthe top two); and with disease management support for employeeswith existing chronic conditions.

What RAND found was that the disease management programs had amuch higher return on investment than did the wellnessprograms.

The gap was huge: ROI for disease management was $3.80, but just50 cents on the dollar for wellness programs.

As RAND stated, “the two component programs reduced theemployer's average health care costs by about $30 per member permonth (PMPM). But disease management was responsible for 87 percentof those savings. … Furthermore, only 13 percent of employeesparticipated in the disease management component, compared with 87percent for the lifestyle management component. Put differently,the much higher participation in the lifestyle management componentcontributed only slightly to the overall savings.”

RAND doesn't suggest employers abandon wellness programs infavor of disease management initiative. It just wants to underscorethat disease management pays off sooner and with a larger dollarimpact. Offering wellness programs as a sign of concern aboutemployee well-being is a good motive. Offering them in an attemptto significantly reduce employee health costs would be amistake.

RAND had three recommendations for employers that emerged fromits study:

• “First, employers need to be clear about their goals for thewellness program. The RAND Wellness Program Study has shown thatlifestyle management can reduce health risks such as smoking,obesity, and lack of physical activity. Our analysis of the Fortune100 employer's program also shows that lifestyle management canreduce absenteeism. Thus, if an employer wants to improve employeehealth or productivity, an evidence-based lifestyle managementprogram can achieve this goal. But employers who are seeking ahealthy ROI on their programs should target employees who alreadyhave chronic diseases.
• “Second, given the lack of financial return from the lifestylecomponent, employers need to pay attention to cost. Screening allemployees for health risks and offering one-to-one counseling andcoaching to those with such risks is expensive, but otherinterventions, such as offering healthy food choices and launchingeducational campaigns to use the stairs, are not.
• “Third, execution really matters. The findings presented hereare derived from leading employers with a strong organizationalcommitment to wellness and substantial experience with runningprograms. Learning from them how to engage employees and achievefundamental behavior change would be prudent for employers who wantcomparable results.”