Since 2013, 66 percent of employers have increased their health and wellness program offerings — on-site fitness centers, yoga classes, massages — and 67 percent plan to offer even more over the next five years.
These wellness programs and initiatives have picked up speed and popularity, becoming the trendy “one-stop solution” that employers can implement to check “employee health” off their to-do lists. Unfortunately, there is little research to support the efficacy of these programs. They are costly — $100-$150 per employee per month, plus an additional $784 in per capita incentives, by some estimates — few (24 percent) employees participate and those that do are often already healthier than an employer’s target audience. One study found that those who participated in wellness programs were younger, had a higher rate of monthly gym visits and already have, or were likely to, participate in 5k/10k runs.
[Related: 10 Quick Ways to Promote Workplace Wellness]
Instead, the best and most cost-effective route to improve employee health is to start ensuring health plans provide access to value-based primary care, which incentivizes physicians to order fewer unnecessary and costly tests/procedures (from both a financial and medical harm perspective) and focus on generating positive patient outcomes.
The status quo fee-for-service model we see today pays physicians not for how well they do their jobs, but for how many services they provide. This could explain why experts believe $200 billion goes to waste each year in unnecessary medical testing. One study on patient care in Washington found that $282 million was unnecessarily spent on commonly overused procedures — preoperative tests for low-risk surgeries, scans for low back pain and excessive cancer screenings. Starbucks’ study of back pain interventions found that 90 percent of what hospitals did provided no benefit.
In a value-based primary care system, physicians are incentivized by outcomes, resulting in fewer additional, and therefore less expensive, appointments. Value-based primary care practices enable telemedicine where employees who aren’t seriously ill can reach health professionals via phone, email or video, which reduces waiting room size and prevents impatient, seriously sick people from forgoing a traditional appointment and heading to an ER or Urgent Care center where they rack up expensive bills.
Yet another way employers save money is by working with Centers of Excellence: networks of high-quality provider organizations known for being superior in certain specialties and procedures. In such a setting, an employee would be evaluated by many multidisciplinary physicians who would collaboratively work with the patient from diagnosis to treatment to rehabilitation. This is especially important when dealing with chronic conditions like diabetes, organ transplants and joint replacements or cancers since treatment is often ongoing.
Additionally, rather than having multiple bills for each individual service, Centers of Excellence use bundled payments so there is only one set cost for the entire treatment plan. Since the payment has been predetermined, a provider organization is responsible for any medical expenses that exceed the allotted amount.
For Boeing, their preferred Centers of Excellence are the Mayo Clinic’s Phoenix and Scottsdale, Arizona campuses. They waive employees’ coinsurance, the portion of the claim an employee must pay, and they provide travel and lodging for those needing cardiac care, spine care and hip and knee replacements. Similarly, Walmart identified Mercy Hospital in Springfield, Missouri as a Center of Excellence for its employees needing transplants, heart surgery or spine surgery, paying for the procedure, travel, lodging and food, too. By encouraging employers to receive top-notch care at these facilities, it saves money in the long run.
Award-winning owner of Rosen Hotels & Resorts, Harris Rosen, switched to a value-based health plan, saving more than $340 million and spending 40 percent less per capita on employee insurance than the national average. Rosen Hotels has an on-site medical center equipped with a team of physicians, dieticians, physical therapists, pharmacists, health coaches and nurses which employees can visit — with free transportation while on the clock — during their workday. This is especially important to hourly employees, for whom going to the doctor during the day would typically mean fewer work hours and therefore less pay. Employees have no coinsurance, pay only $5 for an office visit and don’t have to pay for 90 percent of their prescriptions.
Despite minimal financial ROI, those in favor of so-called wellness programs argue that they have a high Value on Investment, or VOI, that leads to increased productivity, employee engagement and overall happiness. But employers can see these same positive results without having to spend additional money on wellness programs and incentives.
Employers already set aside money for employees’ health plans each year, and the fix lies not in funding wellness programs on top of insurance costs, but instead using healthcare money more wisely. To cut costs and provide better care to their employees, employers should start by adopting a health plan that supports value-based primary care.
Dave Chase is co-founder of Health Rosetta, which aims to accelerate the adoption of simple, practical, non-partisan fixes to our health care system. He is also the author of The CEO’s Guide to Restoring the American Dream: How to Deliver World Class Health Care to Your Employees at Half the Cost. (Health Rosetta Media, September 2017).