Why Every Wellness Program is Destined to Fail (And What to Focus On Instead)

BY RYAN SPENCER Wellness programs have long been championed as ways for employees to reduce benefits expenses, presumably by making employees healthier. Unfortunately, study after study has proven that wellness programs don’t generate an ROI or even help unhealthy employees improve their health. Employers approach these programs from the wrong angle. While they’re not effective at improving health, they can be excellent tools for company culture, a factor that may contribute a different kind of ROI through employee retention. Wellness programs fail to improve employee health because of their design—and statistics. 80% of a company’s annual health care claims and costs are generated by high-claimant employees. Typically, these individuals are the ones with the gravest, most persistent health issues. Wellness programs are great for guiding employees who are already healthy or in generally good health, but they fail to properly reach high-claimants and your next high-claimants (employees who are on course to have significant costly medical issues within the next few years). Your high-claimants and next high-claimants need better health education and proactive intervention, but the majority of wellness programs focus on incremental health improvements with ideas like “Salad Tuesdays” and “Walking Wednesdays.” By failing to reach the demographic that generates 80% of a company’s costs, wellness programs won’t make a significant difference in annual spend—and they won’t significantly change the lifestyles of your employees. Instead of focusing on wellness programs, it’s best for companies to take two different steps:

• Improve the overall benefits package. Employees should be able to afford regular visits with doctors and specialists to improve their health and ward off potential long-term diseases. Each member of your team is different, so their roadmap to health is going to be inherently different as well. A salad and a walk aren’t going to work for everyone, but proper medical treatment will equip employees with the right knowledge and resources to improve their health.
• Educate your employees. Leverage your employees’ favorite communication channels (like texting, voice mail, and video) to educate them on plan policy so they can get every advantage to improve their health.

When Wellness Programs Work

When clients are considering a wellness program, we always ask the same question: “What’s your end goal?” If the goal is to improve health, we don’t recommend pursuing the wellness program. However, if the goal is to improve company culture, then we’ll support it. We have our own successful wellness program at Conner Insurance. Although it is regularly recognized as one of the best in Indiana, that wasn’t the goal of the program—and it’s not the reason we have such a healthy workforce. Our goal for the wellness program was to improve company culture for our employees, not to reduce claims. The program supports our employees, brings our team together, and supplements the rest of our company benefits and culture. Implementing a wellness program isn’t inherently a bad idea, but company leaders need to approach them with the right strategy. Research has shown that wellness programs fail to produce an ROI. However, with the proper execution, wellness programs can be excellent tools for building a robust company culture that connects employees together and reduces employee turnover.