What’s next for workplace wellness?

Workplace wellness programs have sprouted up with a vengeance in the last decade or so, but do they work?

Workplace wellness programs have sprouted up with a vengeance in the last decade or so. The term includes everything from work-sponsored biometric screenings, to anti-smoking programs, to health coaching and, yes, even Zumba classes.

It’s a wide net, workplace wellness, but as these programs become increasingly popular, things are changing.

“Where the market’s evolved to is not just a phone call or a meeting with a coach,” said Michael Rosenfeld, president of WellNow, a wellness management company in Trevose, Pa. “Now where the market’s moving is into a technology realm.”

When Rosenfeld started his company eight years ago, the workplace wellness world was a different ballgame, he says.

“When we started, the industry was kind of afraid of asking employees to disclose information, kind of an Orwellian thing — ‘I’m asking you to draw blood, I’m asking you to answer questions about your health,'” said Rosenfeld. “They felt like that was kind of over the top.”

That has changed.

The Orwellian uneasiness on the part of employers has been subsumed by the bottom line realities of the rising cost of offering health coverage. 

Big problems, popular fix

Workplace wellness is now a $6-billion industry. Recent data suggest that about half of all companies with at least 50 workers have some sort of wellness program. And if you work at a really big company, it’s almost certain that you have access to at least one. 

“Given where health-care costs have really risen to it’s, ‘I need to get involved because if I don’t, my costs are going to pretty much go out of control,'” Rosenfeld said.

WellNow offers comprehensive programs to roughly two-dozen companies, most in the Philly area.

The backdrop for all this is the ongoing crisis state of the American health care market. Chronic conditions, many of which are from so-called “lifestyle diseases,” drive lots of spending.

Rosenfeld says the idea behind workplace wellness is to help people understand the intersection of lifestyle and health. If you can give people the tools, classes or support to make a change, they might feel better — and they might help their employer avoid costly health claims down the road.

But does this actually save companies money? 

But the thing is, just how valuable, just how much less employers are paying for health care because of workplace wellness programs, is now coming under much more scrutiny.

“We still find evidence for the programs improving health and health-related behavior, we just don’t find that this saves a lot of money,” said Soeren Mattke, a senior scientist at the RAND Corporation. A report authored by Mattke last summer was a gut check for the workplace wellness industry.

RAND, a leading policy analysis firm, was tapped by the government to do the most comprehensive evaluation of workplace wellness programs to date.

Going into it, the conventional wisdom was that every dollar a company spent on wellness yielded three dollars in return.

“Our estimate for the Department of Labor report said, at best, these programs are cost neutral when it comes to health care costs,” Mattke said. “Actually, the Pepsi study that we just published a few weeks ago, showed that return on investment was only 25 cents on the dollar for their specific program.”

The soda maker’s wellness offerings are among the most well established in corporate America.

Mattke stresses that wellness programs do seem to chip away at what the RAND report called “the current epidemic of lifestyle-related diseases.” Think obesity, diabetes, heart disease.

And even if the narrow business case for them may not be so strong, Mattke says wellness programs probably aren’t going anywhere.

Another study last summer from the Kaiser Family Foundation found that most employers still swear by them — with the idea being that something, anything, to fight rising health costs might be worth keeping.

But RAND says some employers are likely to switch gears going forward, offering more targeted ways of getting bang for their wellness buck.

“I would forecast that they are becoming smarter about what they do — and for whom they make it available,” said RAND’s Mattke.

And that’s what a handful of new wellness startups are also banking on.

‘A stock exchange for your health’

“Pick a character,” said Jon Cooper, founder and CEO of LifeVest Health. 

I picked “9-to-5 Fred.” 

“Glad to hear that,” Cooper said. “Everyone usually goes for Workaholic Wendy.”

Cooper and I are looking at his laptop. My avatar: the bumbling Kevin character from the sitcom “The Office.”

Cooper was walking me through how the LifeVest online dashboard works.

“We have this underlying concept of building a stock exchange for your health, and treating your health like a stock that will go up or down as you improve or neglect your health,” he said.

It’s all based on biometric screenings and tracking health measures. If your blood pressure goes down, for example, your stock goes up; you stand to make more money. If you light up during a lunch break, your stock goes down.

You can see it on Kevin’s hypothetical dashboard: money as both carrot and stick.

“So what does he do?” Cooper said, clicking away. “He goes in to add his record that week, he mentions that he’s been smoking, and right away he gets instant feedback.

“It says, ‘Hey, that cost you $5, you just lost 146 days from your life expectancy. And that’s a real message, right? It’s something that people don’t shrug off, really.”

LifeVest is new to the market. The Philly-based startup relocated from Denver about a year ago. It recently signed JetBlue to its roster of roughly a dozen companies.

Cooper says the thing that makes LifeVest stand out in a crowded field is … money.

“There’s a powerful association between having an investment in your health — or having skin in the game, taking on a little risk — and actually affecting your behavior change,” Cooper said.

Direct financial incentives for participating in workplace wellness programs are still quite rare, according to the studies from RAND and Kaiser. But — no surprise here — they also found that cash tends to be a good motivator.

Measuring the impact of incentives on behavior

Cooper says it’s early yet, but his company is seeing promising engagement numbers — a partial validation of the startup’s approach to workplace wellness deeply rooted in behavioral economics.

“We use every sort of accountability tool there is out there,” Cooper said. “So we’re using financial incentives, you’ve got competition with your friends, you’ve got your family who’s holding you accountable. In that sense it is gamified, but it’s not a video game for health.”

But do we really want employers wielding more effective tools for coaxing us to work out?

Cooper says better health is a win-win. And easing concerns around employers having too much access to personal information is a major focus industry-wide.

“[Your employer] can see, you know, ‘What does my Atlanta office look like?'” said Cooper. “But they don’t see, ‘What does Bob in accounting look like?'”

Along with a boost from changing understandings of wellness ROI, LifeVest thinks it’s poised to ride a wave of structural change in the health care landscape. The Affordable Care Act lets companies dangle bigger financial rewards for hitting health goals.

And impose stiffer penalties, too.

For example, the law allows companies to make smokers bear up to 50 percent more in premiums than nonsmokers.

Soeren Mattke of RAND says aligning incentives to create better public health is probably a good thing, but thorny ethical issues are likely to emerge.

“I think many people are OK with penalizing smokers if you offer them a way out of the addiction,” he said. “But if you look at obesity and eating behavior, that’s a much more nuanced and complex problem.”

“Finding the right balance between incentivizing weight control and just imposing a tax on obesity is going to be really hard,” Mattke added.

If high-powered incentives become a bigger part of making workplace wellness work, the goal of LifeVest and others will be to walk that thin line — while getting us to walk more, too.