Managing Manifest Diseases But Not Health Risks Saved PepsiCo Money Over Seven Years
Author: John P. Caloyeras, Hangsheng Liu, Ellen Exum, Megan Broderick, Soeren Mattke
Workplace wellness programs are increasingly popular. Employers expect them to improve employee health and well-being, lower medical costs, increase productivity, and reduce absenteeism. To test whether such expectations are warranted, we evaluated the cost impact of the lifestyle and disease management components of PepsiCo’s wellness program, Healthy Living. We found that seven years of continuous participation in one or both components was associated with an average reduction of $30 in health care cost per member per month. When we looked at each component individually, we found that the disease management component was associated with lower costs and that the lifestyle management component was not. We estimate disease management to reduce health care costs by $136 per member per month, driven by a 29 percent reduction in hospital admissions. Workplace wellness programs may reduce health risks, delay or avoid the onset of chronic diseases, and lower health care costs for employees with manifest chronic disease. But employers and policy makers should not take for granted that the lifestyle management component of such programs can reduce health care costs or even lead to net savings.