Why Employers Are Wasting Millions On Wellness Programs (With Little To Show For It)

by | Aug 18, 2021

Employers are paying more than ever for employee healthcare, from small businesses to multinational corporations.

This isn’t anything new – healthcare costs have been steadily rising for years. It’s estimated that in the next two years, employer healthcare costs will rise as much as 5.3% for 2021 and another 6.5% in 2022.

And this doesn’t necessarily take into account the “COVID hangover”. According to a Kaiser Family Foundation poll, almost half of Americans said they deferred medical treatments because of COVID. Now, as things open up and people start scheduling everything from hip replacements to heart surgeries, employer healthcare plans are facing a tidal wave of utilization.

Seeing these costs eat into the company’s bottom line, employers have searched for a wide variety of ways to mitigate these costs while still providing their employees with high-quality healthcare.

It hasn’t been easy to find solutions that balance cost with quality.

There are many strategies, like:

  • HAS (Health Savings Account) contributions
  • Mining employee health data to ensure outcomes
  • Cutting pharmacy costs with biosimilars
  • Referring employees to doctors’ offices instead of hospitals
  • Adding telemedicine services
  • Using value-based designs with bundled services
  • Integrated wellness programs

With all these options, why are employers still struggling to cut costs?

Why cutting employer healthcare costs is so difficult

No business, big or small, can dictate the healthcare marketplace. And when healthcare costs rise across the board, everyone has to pay higher prices.

Even with the many and varied ways employers can cut costs, results can be marginal, or even nonexistent.

The cost savings methods we mentioned before can work, but one of the most effective ways to cut costs is through integrated wellness programs (in theory – we’ll get to that later).

Integrated wellness programs are meant to help employers cut costs by having employees actively engage in healthy activities by exercising, eating healthier, losing weight, improving emotional and mental health, quitting bad habits, and managing chronic conditions like heart disease and diabetes.

Healthier employees equal less healthcare utilization, less absenteeism, and more productivity – in theory.

Corporate wellness programs are a 6-billion-dollar industry. Companies spend millions in the hopes that these programs will help them cut their healthcare costs.

The press and even some academics have praised the cost-cutting powers of wellness programs. However, a recent Rand Corporation study found only a negligible impact on cost savings.

They found that out of 600,000 employees at seven major corporations, wellness programs had little, if any, impact on the company’s healthcare costs.

So if these programs are supposed to be so amazing at cutting costs, why do some data say otherwise?

Why employers are wasting millions of dollars on wellness programs

Gallup recently published the results of a poll on employee wellness programs called: Most Companies Wellness Programs Are A Bust.

They found that only 24% of employees at companies offering a wellness program participated in it. A mere 12% of employees strongly agree that they have substantially higher overall well-being because of their employers.

More importantly, a majority consider their job a detriment to their ability to achieve higher well-being. So what’s going wrong? There are three main problems:

1.) How the company supports well-being

2.) How the company defines well-being

3.) How the managers promote well-being

The solutions for each of these problems were: treat the whole person holistically, make participating easier by integrating it into corporate culture, and having managers lead by example with their health.

However, the main problem that can stop any of these solutions before they start is underutilization. If employees aren’t using the wellness program – why waste the time and money on them?

How can you get employees to actively participate in their wellness program to make it an effective tool to cut costs?

The solution to cutting employer healthcare costs that nobody thought of

Many wellness programs have great features: biometric data tracking, emotional health and fitness programs, phone apps to track daily health activities, and more.

But no matter how slick the program, app, or compilation of data, if all an employee is getting is an email reminding them to eat healthier or a company-wide fitness challenge, even if it means lowering their healthcare costs (and improving overall health), many employees simply won’t engage.

At AlbumHealth, we poured over this challenge, turning over our platform like a puzzle piece, seeing where it fit.

The Aha! moment came when we realized that our system was a powerful solution to the problem of underutilization.

We already took a whole-person approach to health, merging both emotional and physical health with our program. We managed, reduced, and improved chronic diseases like diabetes and heart disease by focusing on improving mental and emotional health. Without emotional health, physical health either doesn’t improve or in some cases worsens.

But it was our health coaches that were the key to combatting underutilization and maximizing the returns on a wellness program.

Our professional healthcare coaches function as mentors and take a hands-on approach with the employees they supervise. They not only interact one-on-one, with actual human contact to help their clients through their healthcare journey – they teach them how to create and engage in healthy habits on their own.

Teach a man to fish, so the saying goes.

By activating your wellness program with AlbumHealth’s hub, you can leverage the full power of your wellness plan by incorporating it into our unique behavioral change platform.

Our coaches guide your employees. We track and measure progress with biometric data analytics. We improve both the emotional and physical wellness of our clients. By incorporating AlbumHealth’s unique platform, our system seamlessly meshes with your current plan to supercharge it, give it a life that’s more than just an email alert or weight loss competition. It’s a personalized system with a personal relationship with each employee and wellness coach to not only help them get healthier but to teach them how to do it themselves.

The genius of it was that companies can fully utilize the wellness plans they’ve already purchased simply by melding it with the AlbumHealth platform.

So what we saw was that employee wellness programs can work and they can save companies money.

All you have to do is use them.

Contact us today, and let’s talk about how AlbumHealth can help you cut costs and increase positive outcomes by fully utilizing your wellness program.