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The Unnoticed $40 Billion Health Industry

Employer Wellness cost companies worldwide an estimated $40 billion annually, about 4 times the GDP of Niger. But, despite the massive funding, these programs are considered to sit on the periphery of healthcare, far from the heart of provider-focussed health world. Many employer wellness companies are also controversial for not even improving employees’ health outcomes or reducing the employer’s healthcare costs.

Despite the controversy, Employer Wellness is riding a wave of growing popularity of preventative health, with potential for these programs to be a large part of how we keep people well. I decided to delve deeper and look into the history of employer wellness programs and where they are now.

A Quick History of Employer Wellness

During World War II, President Roosevelt forced businesses to freeze wages to discourage inflation. Savvy businesses decided to offer benefits like health insurance in order to vie for talent, and the system of employer-sponsored insurance sprung out of this loophole. In 1943, the IRS decided that health insurance as an employee benefit should not be taxed, and would be cheaper than insurance bought by individual workers, further cementing the use of employer-sponsored insurance.

'Men Working Together!' WWII Poster

In 1978, Johnson and Johnson launched one of the first large wellness programs, promising their employees insurance discounts for participating in free programs like smoking cessation and counseling. Over the next decade, employer wellness programs surged in popularity and employers expanded the scope of these programs. In addition to smoking programs and gym memberships, organizations began to add health coaching, mental health services, stress management and financial wellness.

Now, these programs have gone digital. Over the last ten years employers have flocked to solutions that leverage mobile technology, wearables, and behavioral science. While these new weight-loss apps often have shiny designs, their impacts are often lackluster.

Two Kinds of Wellness Companies

As the number of employer wellness companies has increased, they are typically in two major camps. The Productivity-Focused, appeal to companies’ HRs to increase worker efficiency. They use wellness solutions to build culture, reduce stress and sick days and improve overall productivity. The second group, Outcomes-Focussed, conduct risk assessments, interventions, and other procedures to lower health care costs for the employer.

I did a quick search online and it was easy to distinguish the two by their marketing copy. One real Productivity-focussed site asked ‘Want healthier, happier employees prepared to do their best?’ while another stated ‘More Engaged Employees. Better Business Results’, with no mention of more efficient care. They’re mostly pitching a perk that can be used in recruiting and a team-building health programs that can boost culture and reduce absenteeism. The other focuses on better, cheaper care.

Outcomes-focussed websites says things like ‘Guide [employees] to the highest quality, lowest cost option’ or that they want to ‘address and control increasing healthcare costs’. They are appealing more towards the finances of the company, insurance costs, and dealing with health behaviors and chronic illness.

While 78% of companies now offer some kind of wellness program, many of them are doubting the return on that investment. The Outcomes-Focused companies are especially focussed on whether their participants are getting healthier. One of the core pillars of most wellness programs is health interventions, or programs designed to help risky patients move towards healthier habits and away from expensive and enduring chronic illness. However, many of these interventions have unproven benefits and are based on crude measures like Body Mass Index, a health metric with popularity far surpassing its usefulness.

The Critics

Al Lewis' Book

Even if screenings can help identify high-risk patients, many think that they spur more harmful overtreatment than health improvement. Pushing patients to undergo diagnostics tests post-intervention can result in false diagnoses and expensive and even dangerous excess treatments. Finally, mounds of research has shown that even the goal of weight loss proves humble results, with a RAND study showing that $10 in wellness spending resulted in only a .03 pound weight loss, or $1000 for 3 pounds. The critiques have grown so extreme that one of the most outspoken critics, Al Lewis (whose Book is shown right), is offering $2 million to show that wellness saves money. Despite the controversy, the employer wellness world is still brimming with optimism (and funding) about the potential of its programs to improve health care and reduce costs. Stay tuned to hear more.

Up Next

I'll be talking to Rick McCartney, CEO of iRewardHealth to learn more about the faults and future of the Employer Wellness industry. Check it out here

#healthcare #employerhealth