By Katherine Baicker, David Cutler, and Zirui Song
Workplace Wellness Programs CanGenerate Savings
Amid soaring health spending, there is growing interest in workplace disease prevention and wellness programs to improve healthand lower costs. In a critical meta-analysis of the literature on costs andsavings associated with such programs, we found that medical costs fall by about $3.27 for every dollar spent on wellness programs and thatabsenteeism costs fall by about $2.73 for every dollar spent. Althoughfurther exploration of the mechanisms at work and broader applicability of the findings is needed, this return on investment suggests that the wider adoption of such programs could prove beneficial for budgets andproductivity as well as health outcomes.
nanenvironmentofsoaringhealthcarespending, policymakers, insurers, andemployers express growing interest inmethodsofimprovinghealthwhilelow-ering costs. Much discussion has takenplace about investment in disease preventionand health promotion as a way of achieving bet-ter health outcomes at lower costs. PresidentBarack Obama has highlighted prevention as acentralcomponentofhealthreform,ashavema- jor congressional reform proposals.
Work-place-based wellness programs, which could af-fect prevention, have been showcased in thesereform proposals, the popular press, and con-gressional hearings.
This enthusiasm for workplace programsstemsinpartfromthefactthatmorethan60per-centofAmericansgettheirhealthinsurancecov-erage through an employment-based plan,
aswell as from the recognition that many employ-ees spend the majority of their waking hours inthe workplace
which makes it a natural venuefor investments in health. There are several rea-sons that employers might benefit from invest-ments in employee wellness. First, such pro-grams might lead to reductions in health carecosts and thus health insurance premiums. Sec-ond, healthier workers might be more produc-tive and miss fewer days of work. These benefitsmay accrue at least partially to the employer (such as through improved ability to attractworkers), even if the primary benefits accrueto the employee.These factors may motivate the increasing in-terest in such programs among employers
andespecially large employers. In 2006, 19 percentofcompanieswith500ormoreworkersreportedofferingwellnessprograms,whilea2008survey of large manufacturing employers reported that77 percent offered some kind of formal healthandwellnessprogram.
Consistentwiththeevi-dence presentedbelow,small firms seemslower to offer such programs, and many of the pro-grams offered are still quite limited in scope.
Several well-publicized case studies have sug-gested a positive return to employers
invest-ment in prevention. For every dollar investedin the program, the employer saves more thanthe dollar spent. The Citibank Health Manage-ment Program reported an estimated savingsof $4.50 in medical expenditures per dollar spent on the program.
Studies from the Cali-fornia Public Employees Retirement System(CalPERS), Bank of America, and Johnson andJohnson have similarly estimated sizable healthcaresavingsfromwellnessprograms.
doi:10.1377/hlthaff.2009.0626HEALTH AFFAIRS 29,NO. 2 (2010):
©2010 Project HOPE
The People-to-People HealthFoundation, Inc.
(Kbaicker@hsph.harvard.edu) is aprofessor of health economicsat the School of PublicHealth, Harvard University, inBoston, Massachusetts.
is a professor ofeconomics at HarvardUniversity.
is a doctoralcandidate at Harvard MedicalSchool.FEBRUARY 2010 29:2HEALTH AFFAIRS