An analysis of PepsiCo’s wellness program raises questions about the bottom-line benefits of such programs, as more and more employers turn to wellness initiatives as a potential remedy for rising health care costs.
A Rand Corp. study found that PepsiCo’s efforts to help employees manage chronic illnesses saved $3.78 in health care costs for every $1 invested in the effort. However, the program's lifestyle-management components that encourage healthy living did not deliver returns that were higher than the costs.
The results of the study are published in the January edition of the journal Health Affairs.
“The PepsiCo program provides a substantial return for the investment made in helping employees manage chronic illnesses such as diabetes and heart disease,” said Dr. Soeren Mattke, the study's senior author and a senior natural scientist at the nonprofit Rand Corp. “But the lifestyle-management component of the program – while delivering benefits – did not provide more savings than it cost to offer.”
The analysis supports that the notion that it’s easier to achieve cost savings in people with higher baseline spending, as found among those who participated in the PepsiCo disease-management program. The disease-management participants who also joined the lifestyle-management program experienced significantly higher savings, which suggests that proper targeting can improve the financial performance of lifestyle-management programs.
“While workplace wellness programs have the potential to reduce health risks and cut health care spending, employers and policymakers should not take for granted that the lifestyle-management components of the programs can reduce costs or lead to savings overall,” Mattke said.
Healthy Living Program
Workplace health and wellness programs are becoming an increasingly common workplace benefit in the United States. The Affordable Care Act has several provisions designed to promote such efforts as a way to lower health care costs.
A recent Rand study conducted for the U.S. Department of Labor found that about half of U.S. employers with at least 50 workers and more than 90 percent of those with more than 50,000 workers offered a wellness program during 2012.
The current Rand study provides an assessment of over seven years of PepsiCo's Healthy Living wellness program. The program has numerous components, including health-risk assessments, onsite wellness events, lifestyle management, disease management, complex care management and a nurse-advice phone line. The study evaluated the experiences of more than 67,000 workers who were eligible for the disease-management or lifestyle-management programs.
Researchers found that the disease-management program reduced costs among participants by $136 per member per month, or $1,632 annually, driven by a 29 percent drop in hospital admissions.
Among people who participated in both the disease-management and lifestyle-management programs, the savings were $160 per month with a 66 percent drop in hospital admissions.
People who participated in the lifestyle-management program reported a small reduction in absenteeism, but there was no significant effect on health care costs.