Corporate wellness programs have become a $6 billion industry for one, possibly flawed, reason: they help reduce companies’ healthcare costs, while saving their employees money.
To some degree, they have been a success. Growth in premiums has hit its lowest point in the last 16 years. A new survey by the Kaiser Family Foundation shows that 71 percent of employers believe corporate wellness programs are either “very” or “somewhat” effective at reducing spending on providing benefits for their employees, who would be rewarded with these benefits by meeting various incentives.
But companies can also impose a penalty. They can charge an employee more for smoking or being overweight. It’s the very reason why, says Professor Nancy Koehn of the Harvard Business School, these programs don’t work.
“What’s really happening in many instances is that costs are getting shifted to employees, whether it’s because they don’t meet certain goals or they don’t conform in certain ways,” she says. “Healthcare costs are going down for companies, but not so much for individuals and families.”
And they’re not having any lasting effects on their health, either, she adds.
“All these incentives, all these hurdles, greatly increase the cost of testing employees. So these things are more costly than you might think.”
Listen to the full conversation in the audio player above.
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