Wellness Fails Again

UntitledPepsiCo is the latest large employer to report that its wellness program has a negative return on investment, returning $0.48 for every dollar invested.

A voluntary program to help people manage actual diseases returned $3.78 per dollar invested.

The authors note that the results likely overstate the return on investment because they did not include the cost of program staff or the cost of employee time.

Beginning this year, ObamaCare requires that the government spend $200 million on wellness grants for small businesses that did not have a program in place when the law passed in 2010.

Comments (21)

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  1. Health Debunker says:

    Maybe if only companies that sold healthy products made investments in these wellness programs would the return be positive.

    • Jay says:

      Perhaps corn syrup laden beverage companies correlate with negative returns on wellness programs. The apple doesn’t fall far from the tree.

  2. Thomas says:

    I wonder if any company’s wellness program has picked up any steam and has a positive return on investment. They seem to be good benefits to offer in theory, but I would estimate PepsiCo aren’t the only ones in which they fail to gain traction.

  3. Matthew says:

    It is interesting how voluntary programs find success. If wellness programs are mandatory, perhaps this turns people off and makes him unwilling to participate.

    • James M. says:

      Any sort of wellness program should be optional and not forced on its employees.

    • Andrew says:

      Of course with voluntary programs, it is directed at a particular demographic. When a service is offered to meet the needs of individuals, it is likely to be more successful. Not every employee needs or chooses to be in a wellness program.

  4. Walter Q. says:

    Hospitals have taken the wellness programs and implemented them in their organizations. I wonder if their return rates are successful, since they should be promoting wellness by being a medical institution. How would their programs compare with a company like PepsiCo?

    • Devon Herrick says:

      Years ago I worked for a hospital that implemented a wellness program. Hospitals are in a unique situation because: 1) they are labor intensive. 2) their workers know about the medical technology and aren’t afraid to use it.

      The early attempts at wellness were a failure in terms of cost control. The hospital had this (now outdated) idea that if it encouraged workers to see the doctor for every whim, the additional office visits would lower hospital costs later. It didn’t.

      • John R. Graham says:

        Plus – even if such progams did work – it is hard to imagine how they could work in small businesses, which do not have a bureaucracy or paternalistic culture to implement a wellness program.

  5. Buster says:

    The only health & wellness program that works is screening out all the unhealthy applicants, and running off those workers who don’t take care of their health.

  6. Ted says:

    You can’t force people to be healthy.

  7. Ava says:

    It makes sense that programs for people already dealing with disease pay off. They’re the ones who already acknowledge their health issues.

  8. John R. Graham says:

    Gallup just published an intersting survey on wellness programs (http://tinyurl.com/pey4yqr).

    Apparently, on 60 percent of employees are even aware of wellness programs at their workplace, and only 40 percent of the 60 percent engage them. That would be 24 percent of employees, net.

    I suspect that these would largely be employees who would live healthy lifestyles, notwithstanding a the job-based wellness program.

  9. Jimbino says:

    A return of $0.48 on the dollar is very poor, but not a “negative” return. A negative return would be where Pepsi reaches into your wallet at year’s end and takes a lot more out.

    All insurance is characterized by a very poor return on the premium dollar. Why don’t you publish the figures? Amerikans are totally clueless as to how much of their healthcare premium is money down the drain. Roulette returns some $0.96 on the “investment” dollar, and Obamacare, by design, returns less than $0.80 on the premium dollar, and probably much less.

    NFIP flood insurance typically returns some $0.65 on the premium dollar. Title insurance returns some $0.02 on the premium dollar. Insurance is everywhere and always subscribed to by fools, and if not fools, those who have pre-existing conditions or other unfair preferences, or who manage to defraud.

    • John R. Graham says:

      Thank you for that necessary reminder. It is why insurance should be used rarely, and only for rare, catastrophic, and unpredictable events.

    • Devon Herrick says:

      That’s a good point that is lost on most people. Insurance (by design) is a pooling of risk (that is, a transfer of risk from individuals to the whole group). Insurance is asset protection for people with assets to protect. Insurance is not an efficient way to pay routine bills.