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Fact and fantasy of wellness programs

Waistline

An insightful Bloomberg story finds that behind the growing trend of wellness programs in employee health coverage is, well, not much.

Citing a study by Rand Corp., half of all large organizations with 50 or more employees have wellness plans that use financial incentives to get employees to improve their health with lifestyle changes, or reducing their cholesterol numbers, for example. Some use penalties for poor performance, charging employees more for smoking or having excess body fat.

Bloomberg looks at one particularly onerous employee program at Penn State that levies a $100 monthly surcharge on health insurance for all nonunion employees who don't submit their health histories, take an annual health exam, and submit to periodic tests of cholesterol, blood-sugar, blood-pressure,  body mass and waist size. 

The Affordable Care Act is one reason for the spread of the wellness model. It increases the legal limit on penalties employers can charge in their health programs to 30 percent of the total premium cost, Bloomberg says. The goal is to reduce healthcare spending and improve health, but, Bloomberg reports, there's not much evidence they do,

"In a recently released white paper, health economists Dennis Scanlon and Dennis Shea reviewed the evidence on what drives health-care cost growth. A leading factor is health-care technology. Expansion of third-party payment (i.e. insurance coverage) and income growth have also, historically, played large roles. The evidence suggests that disease prevalence may explain 25 percent of health-care spending growth, only a portion of which is due to modifiable lifestyle factors.

"Given all of this, why are wellness programs so pervasive? Our hypothesis is that it’s a form of supplier-induced demand." Read the story.

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