All This Focus On Health and Wellness Is Good, But Who Really Gains?

There is a huge focus on health and wellness these days, but what's the goal and who gains the most? The answer may be surprising.

March 24, 2015

3 Min Read
All This Focus On Health and Wellness Is Good, But Who Really Gains?

There is a huge focus on health and wellness these days, but what's the goal and who gains the most? The answer may be surprising.

Arundhati Parmar

Health and wellness got a tremendous boost with the passage of the Affordable Care Act in two ways.

One, the law enacted in 2010, requires employers to offer wellness programs with different goals for employees. And second, health plans were mandated to cover preventive services without charging people co-pays or co-insurances. These include everything from smoking cessation programs to obesity screening and counseling, and immunization vaccines to diet counseling.

One can argue that the law's focus on health and wellness has created an opportunity for wellness widgets that have attracted even the likes of Apple to invent a whole new category of consumer device - the Apple Watch - with fitness tracking capability. Other names like Fitbit and Misfit Wearables have become household names.

But the question is who truly gains from all this focus on health and wellness? For employers, the incentive of course is that healthier employees means less productivity loss due to sickness, which has an impact on a company's business. For health plans, the incentive is similarly financial. Less sick members mean less healthcare utilization and lower claims.

But at the annual meeting of the American Academy of Orthopaedic Surgeons that kicked off in Las Vegas on Monday, a panelist called into question the immediacy of financial gains that can be made when employers and plans invest in health and wellness.

"You know what the ROI of wellness is, how many years? asked Brian Silverstein, president of HC Wisdom, a healthcare consulting firm, to a roomful of orthopedic surgeons. "Well [it's] zero ROI immediately, and you got to wait five, 10, 15, 20 years before you see any ROI. So if we make huge investments in wellness, that's just going to help us go out of business next year."

Silverstein went on to add:

You might say, 'Why in the world did the Feds as part of the ACA mandate that all wellness is free?' You know why? Because they are making a bet that 'Hey we want everyone else to pay for wellness so by the time they get to us, hopefully they won't be as sick.

It's an interesting bet. We will see how it plays out.

One can argue that this is somewhat of a cynical view of health and wellness. After all, as a nation we will be better off if patients can use these programs and become more healthy.

But the perspective is interesting nonetheless. Hearing Silverstein, I recalled the luncheon conversation I had at the JPMorgan Healthcare Conference in San Francisco in January, where a European private equity executive declared that U.S. insurance companies are reluctant to pay for wellness programs. And that was because unlike in single payor systems, American payors aren't covering a person for life. As people change employers, they typically switch to the health benefits being offered by the insurance company the new employer has on board.

As such, health insurer B or a self insured employer may end up reaping the benefits of the wellness investments made by health insurer company A. And that is anathema to a free market-based economy such as ours. 

Then again, perhaps this may be why the ACA mandated wellness programs be covered by insurers in the first place - because the Feds knew that there was no chance of it happening otherwise.

Fifteen, 20 years from now if what Silverstein calls "an interesting bet" by the government pans out, we might end up with a healthier patient population and a moderately less expensive healthcare system.

Health and wellness is only part of the puzzle of lowering costs and improving care overall, but it's an important piece nonetheless. 

Arundhati Parmar is senior editor at MD+DI. Reach her at [email protected] and on Twitter @aparmarbb 

[Photo Courtesy of user onurdongel]

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