Boosting Employee Wellness Participation Without Breaking the Bank

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By Steven Nyce

During 2009, rising health care costs, rocky economic conditions and the specter of health care reform drove employers to seek new ways to manage costs and help their workers lead healthier lives. Many companies made considerable investments in wellness programs, hoping that motivating employees to take control of their health would reduce costs and enhance productivity. Their investments often include monetary rewards for participation, but that wellness strategy is expensive and does not always attain desired results. This analysis explores other, less expensive — but equally successful — alternatives that hold out great promise.

Today, employers devote nearly 2% of their health claim dollars to wellness programs, which have become a standard workplace benefit. ^[1] But while more employers sponsor such programs, many are increasingly frustrated by the results. According to the 15th Annual National Business Group on Health/Towers Watson Employer Survey on Purchasing Value in Health Care, nearly two-thirds of employers say employees’ poor health habits are the biggest challenge to managing health care costs. Likewise, 58% of companies cite low employee engagement as the greatest obstacle to changing unhealthy behaviors. Many employers point to medical vendors’ ineffectiveness in promoting healthy lifestyles and encouraging more efficient use of health care services.

The success of wellness programs hinges on whether employees participate. To that end, employers have been actively and even aggressively taking actions to boost program enrollment. Financial incentives — notably cash — have been the strategy of choice. But even though cash rewards have worked for many employers, they are not a panacea. Ongoing cash rewards are not financially sustainable and/or scalable, especially in the current economic climate, and research suggests participants’ healthier behaviors often end when the financial incentives disappear. 

Successful employers share a common commitment in their wellness strategy. They provide broad-based and targeted communication to their workforce and develop a healthy workplace culture with strong support from senior leadership. These efforts emphasize the power of the organization to tap into employees’ intrinsic motives and to cultivate an inherent drive to manage their own health, thus ultimately leading to sustainable behavior change.

Struggling to engage employees in wellness activities

Participation rates in health management programs widely vary across organizations. Over 30% of companies that offer health risk appraisals (HRAs) report more than 50% participation — yet one-quarter report participation levels of 10% or less (see Figure 1). Likewise, while 16% of responding employers report that 50% of employees participated in biometric screenings, nearly an equal percentage report participation rates of 5% or less. Despite rising obesity in recent decades, participation rates in weight management programs remain quite low at most companies. Moreover, few employees use health coaching services or participate in a smoking cessation program when they are offered.

Many employers struggle to track participation in their wellness and health management programs, especially for personal health records and adult health exams. The lack of good data can be a barrier to informed decision making. But tracking wellness data more closely is not always possible, especially given federal laws that restrict access to some of this information.   

Figure 1
Employee participation/completion rates in wellness activities

Notes: Based on companies that offer the program and report the participation rate. Participation rates reflect only employees who qualify and/or are recommended for the programs.

Source: 15th Annual National Business Group on Health/Towers Watson Employer Survey on Purchasing Value in Health Care. 

Many benefits from boosting wellness participation

Companies whose employees participate in health management programs report lower overall health cost trends across nearly all health-related activities (see Figure 2). For example, if at least 50% of employees complete a biometric screening, cost trends average 6%, compared with 7.5% when participation is lower. However, the association between higher participation and lower cost trends is weaker for weight management programs and disappears for disease management programs. 

This is not meant to imply that health management participation is the only factor in driving trends lower. In fact, employers with the greatest success use many different tactics to bend the cost curve^.[2] But as we discuss below, companies with high participation in health management programs stand apart from other organizations in a number of ways, and these strategies are central to defining their success.            

Figure 2
Health management program participation and cost trends

Note: Based on companies that offer the program and report participation rates.

Source: 15th Annual National Business Group on Health/Towers Watson Employer Survey on Purchasing Value in Health Care.

> Next - Increasing participation with monetary incentives (Part 2)