• Wellness programs aren’t ready for prime time

    Aaron and I have a column up at Bloomberg about why the pushback against Penn State’s new wellness program is well founded. You must go read it!

    In it, we reference a white paper by Dennis Scanlon and Dennis Shea. If you want that paper in PDF form, the authors have permitted us to host it here. It’s a great resource on drivers of health care spending growth and wellness program issues.


    • I can buy that in general wellness programs to date haven’t saved money, although it may depend on what the specific components of the wellness program are. Having heterogeneous designs evaluated seem benefit….

      I’d like to see more evidence for your claim that wellness programs may not improve health. In particular, asking tobacco users to pay more to continue smoking should likely lead to health benefits based on previous literature. I know less about obesity related diseases, but it’d be interesting to see the evidence.

      My other question is – should wellness programs be held to higher standard than other healthcare spending? Why do they need to save money to be implemented? If wellness programs improve health at less than 200K per QALY level doesn’t that suggest it’s better than other healthcare spending?

      One last thought on a potential benefit of wellness programs. Healthcare spending for the obese is much higher than the general population. Thus, since a soda tax and other measures are not currently politically possible, the non-obese is subsidizing the healthcare spending for those that are obese. Wellness program are one politically acceptable (and maybe fairer?) way to reduce the subsidy going from non-obese to obese.

    • I think it’s worth looking at the tax treatment of wellness programs both currently and under ACA.

    • I also (dimly) recall that wellness programs can be used as a form of adverse selection / cost shifting, particularly onto non-employed chronically ill spouses of employed (high cost) workers. Seem to remember than coming up years ago in the Walmart cost discussions:


    • I think the article is fair. There has been real shift that employers are responsible for employees health care choices. So try to make them healthier. It would be interesting to see if the head of the university is also required to participate in the wellness program.

      There is a lot of information that we are not seeing that lead to this decision.

      If a employee of Penn St. does not like the wellness program, they can always drop off and by their own insurance.

    • This can also be a way of evading the limitations on charging a premium (or basing an employer premium contribution) on health status. And there are regulations in the PHSA/market conduct regulations on wellness programs.

      It was also an issue in the MLR regulations: i.e., is the $100 considered premium revenue? Or conversely, is a $100 incentive payment a medical expense?

    • Employee wellness programs wouldn’t be necessary if we could move beyond the ridiculous employer-sponsored insurance paradigm. ESI contributes nothing to the actual health or *wellness* of anyone, beyond the private insurance industry and their investors. It also distorts the labor market and discourages entreprenuership and new business formation.

      I sincerely hope that the ACA’s insurance exchanges will prove effective and thereby facilitate the decline of employers’ involvment in the health insurance racket. While such a change may prove “unhelpful” to incumbent firms, I see only positives from social welfare perspective.