Manufacturers

Caring, sharing and saving cash...PepsiCo’s staff wellness program

09-Jan-2014 - By Ben Bouckley+
PepsiCo's healthcare savings from its wellness program are no drop in the ocean... (Photo: Matt/Flickr)
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PepsiCo’s staff wellness program saved cash in terms of lower healthcare costs but its mainstream ‘lifestyle management’ component had little overall effect, US researchers have concluded.

The company’s Healthy Living program was launched in 2004 and includes health risk assessments, onsite wellness events, lifestyle and disease management, a 24/7 nurse advice line and maternity management.

Such schemes are increasingly popular with US employers trying to slash healthcare costs and reduce absenteeism; PepsiCo’s scheme is open to all employees bar fewer than 10% enrolled in a health maintenance organization or who receive health coverage through a trade union.

Assessing 67,541 staff eligible for the disease management, lifestyle management programs or both (with datasets drawn from 2002-11) Caloyeras et al. associated participation with lower healthcare costs.

Disease management – offered to staff with one of 10 chronic conditions – focuses on improving medication adherence, patient self-care knowledge and abilities, via calls with a nurse.

Disease management linked to savings

Lifestyle management programs involve phone calls with a wellness coach to tackle issues such as weight management, fitness, stress management and smoking over a six month period.

“However, when we broke down the effect on healthcare cost by program component, we found disease management but not lifestyle management to be associated with lower costs,” Caloyeras et al. write.

“We estimate disease management to reduce costs among participants by $136 per member per month, or $1,632 annually, driven by a 29% reduction in hospital admissions.”

The academics said that employees enrolled on both programs had an estimated reduction of healthcare costs of $160 and $1,020 respectively.

‘Wellness saves money’ not a given

They calculated that taken together both program components reduced absenteeism by 0.1 day (48 minutes) per staff member annually, at a monetized impact of $28 per year.

“Based on our analyses, we estimate that the lifestyle management and disease management components returned an average of $0.48 and $3.78 respectively for every dollar invested, when both health care and absenteeism impacts were included,” Caloyeras et al. write.

“Together, they returned $1.46 for every dollar invested…the main driver of the positive ROI is the reduction in healthcare costs associated with disease management participation.”

Emphasizing that current evidence suggests blanket claims of ‘wellness saves money’ are unwarranted, Caloyeras et al. say that any healthcare program needs to be scrutinized to understand its results.

Employers should align programs with their objectives, they add, and if the primary objective is cost control should focus on interventions for higher-risk employees with risk factors or chronic diseases.

“Employers and policy makers should not take for granted that the lifestyle management components of such programs can reduce healthcare costs or even lead to net savings,” they write.

Title: ‘Managing Manifest Diseases, But Not Health Risks, Saved PepsiCo Money Over Seven Years’

Authors: Caloyeras, J.P., Hangsheng, L., Exum, E., Broderick, M., Mattke, S.

Source: Health Affairs, 33, No.1 (2014): 124-131, doi: 10.1377/hlthaff.2013.0625

Related topics: Manufacturers, PepsiCo, Soft Drinks & Water