The idea behind workplace wellness policies is straightforward. Many workers could use a nudge toward adopting healthier lives, including diet and exercise. Employer are paying for health insurance anyway, and also experiencing costs of lower productivity and sick days for their employees. If a workplace wellness program can improve health, it could be a win for both workers and employers. However, a couple of recent studies from this year suggest that such programs don't pay off.
One study was published by Damon Jones, David Molitor, and Julian Reif, "What Do Workplace Wellness Programs Do? Evidence from the Illinois Workplace Wellness Study," in the Quarterly Journal of Economics (November 2019, 134:4, pp. 1747-1791). As background, they write (citations omitted):
The 2010 Affordable Care Act (ACA) encourages firms to adopt wellness programs by letting them offer participation incentives up to 30% of the total cost of health insurance coverage, and 18 states currently include some form of wellness incentives as a part of their Medicaid program. Workplace wellness industry revenue has more than tripled in size to $8 billion since 2010, and wellness programs now cover over 50 million U.S. workers.
This study was carried out among employees at the University of Illinois at Urbana-Champaign campus. Here's a capsule description of the process:
We developed a comprehensive workplace wellness program, iThrive, which ran for two years and included three main components: an annual on-site biometric health screening, an annual online health risk assessment (HRA), and weekly wellness activities. We invited 12,459 benefits-eligible university employees to participate in our study and successfully recruited 4,834 participants, 3,300 of whom were assigned to the treatment group and were invited to take paid time off to participate in the wellness program.3 The remaining 1,534 subjects were assigned to a control group, which was not permitted to participate. Those in the treatment group who successfully completed the entire two-year program earned rewards ranging from $50 to $650, with the amounts randomly assigned and communicated at the start of each program year.
The researchers had access to lots of background information as well, because they could look at past employment records and health care spending for those who wanted to participate They write:
From our analysis, we find evidence of significant advantageous selection into our program based on medical spending and health behaviors. At baseline, average annual medical spending among participants was $1,384 less than among nonparticipants. This estimate is statistically (p = .027) and economically significant: all else equal, it implies that increasing the share of participating (low-spending) workers employed at the university by 4.3 percentage points or more would offset the entire costs of our intervention. Participants were also more likely to have visited campus recreational facilities and to have participated in running events prior to our study. We find evidence of adverse selection when examining productivity: at baseline, participants were more likely to have taken sick leave and were less likely to have worked more than 50 hours a week than were nonparticipants.
The results? Disappointing.
Despite strong program participation, we do not find significant effects of our intervention on 40 out of the 42 outcomes we examine in the first year following random assignment. These 40 outcomes include all our measures of medical spending, productivity, health behaviors, and self-reported health. We fail to find significant treatment effects on average medical spending, on different quantiles of the spending distribution, or on any major subcategory of medical utilization (pharmaceutical drugs, office, or hospital). We find no effects on productivity, whether measured using administrative variables (sick leave, salary, promotion), survey variables (hours worked, job satisfaction, job search), or an index that combines all available measures. We also do not find effects on visits to campus gym facilities or on participation in a popular annual community running event, two health behaviors a motivated employee might change within one year. These null effects persist when we estimate longer-run effects of the two-year intervention using outcomes measured up to 30 months after the initial randomization. ...
Our intervention had two positive treatment effects in the first year, based on responses to follow-up surveys. First, employees in the treatment group were more likely than those in the control group to report ever receiving a health screening. This result indicates that the health screening component of our program did not merely crowd out health screenings that would have otherwise occurred without our intervention. Second, treatment group employees were more likely to report that management prioritizes worker health and safety, although this effect disappears after the first year.
As another example, Zirui Song and Katherine Baicker published "Effect of a Workplace Wellness Program on Employee Health and Economic Outcomes; A Randomized Clinical Trial" in the Journal of the American Medical Association (April 16, 2019, 321:15, pp. 1491-1501). The study involved "32, 974 employees at a large US warehouse retail company." Over 160 separate locations for this company, 20 were randomly selected to receive a workplace wellness program. "The program comprised 8 modules focused on nutrition, physical activity, stress reduction, and related topics implemented by registered dietitians at the treatment worksites. ... Self-reported health and behaviors via surveys (29 outcomes) and clinical measures of health via screenings (10 outcomes) were compared among 20 intervention and 20 primary control sites; health care spending and utilization (38 outcomes) and employment outcomes (3 outcomes) from administrative data were compared among 20 intervention and 140 control sites."
The results? Again, disappointing.
After 18 months, the rates for 2 self-reported outcomes were higher in the intervention group than in the control group: for engaging in regular exercise (69.8% vs 61.9% ...) and for actively managing weight (69.2% vs 54.7% ...). The program had no significant effects on other prespecified outcomes: 27 self-reported health outcomes and behaviors (including self-reported health, sleep quality, and food choices), 10 clinical markers of health (including cholesterol, blood pressure, and body mass index), 38 medical and pharmaceutical spending and utilization measures, and 3 employment outcomes (absenteeism, job tenure, and job performance). ... [T]here were no significant differences in clinical measures of health, health care spending and utilization, and employment outcomes after 18 months. Although limited by incomplete data on some outcomes, these findings may temper expectations about the financial return on investment that wellness programs can deliver in the short term.
A couple of takeaways here. First, both of these studies were done with randomized methods (albeit the randomization was of a different kind across the two studies). No social science methodology is flawless, but this is a highly respected approach; indeed, applying randomized experimental methods to issues in development economics won the most recent Nobel prize in economics. In other words, these similarly disappointing results from two different datasets deserve some weight in your thinking on this subject.
Second, the results are perhaps not surprising upon due consideration. People's habits about exercise and diet are deeply rooted. Many people say that they would like to change their patterns, or would like to have changed their patterns in the past. But it's hard to do so. Workplace wellness policies, at least as they exist at many locations, apparently don't offer enough of a shock to change people's behavior.
A version of this article first appeared on Conversable Economist.
Timothy Taylor is an American economist. He is managing editor of the Journal of Economic Perspectives, a quarterly academic journal produced at Macalester College and published by the American Economic Association. Taylor received his Bachelor of Arts degree from Haverford College and a master's degree in economics from Stanford University. At Stanford, he was winner of the award for excellent teaching in a large class (more than 30 students) given by the Associated Students of Stanford University. At Minnesota, he was named a Distinguished Lecturer by the Department of Economics and voted Teacher of the Year by the master's degree students at the Hubert H. Humphrey Institute of Public Affairs. Taylor has been a guest speaker for groups of teachers of high school economics, visiting diplomats from eastern Europe, talk-radio shows, and community groups. From 1989 to 1997, Professor Taylor wrote an economics opinion column for the San Jose Mercury-News. He has published multiple lectures on economics through The Teaching Company. With Rudolph Penner and Isabel Sawhill, he is co-author of Updating America's Social Contract (2000), whose first chapter provided an early radical centrist perspective, "An Agenda for the Radical Middle". Taylor is also the author of The Instant Economist: Everything You Need to Know About How the Economy Works, published by the Penguin Group in 2012. The fourth edition of Taylor's Principles of Economics textbook was published by Textbook Media in 2017.