What PepsiCo’s Wellness Program Study Results Uncovered

December 17, 2015

What PepsiCo’s Wellness Program Study Results Uncovered

Chronic condition costs

Employers are spending big bucks on workplace wellness programs ― designed to improve the health and well-being of their employees, increase their productivity, reduce their risk of developing costly chronic diseases and improve management control of chronic conditions. In 2003, PepsiCo introduced two corporate wellness initiatives for their employees: one program was focused on overall lifestyle and health management, while the other was dedicated to chronic condition management. Based on a study that collected data from thousands of PepsiCo employees over a ten year period of time, the results of these wellness programs can tell us quite a bit about the effectiveness of corporate wellness programs and employee health management.

 Two wellness approaches driving different results

The chronic condition management program yielded PepsiCo savings of $3.78 in healthcare costs for every $1 invested. By focusing aggressively on chronic conditions, participants of this program saved PepsiCo $136 per member per month (PMPM) and had their number of hospital admissions reduced by 29 percent. In contrast, the lifestyle management program did not produce cost saving results. The data pulled from the study showed that there was a reduction in absenteeism, but there was no noticeable impact on the company’s healthcare costs.

Achieving cost savings with chronic condition management

In 2012, more than 90 percent of companies with 50,000 or more employees were offering a wellness program but relatively few of them achieved the kind of results that PepsiCo did with their chronic condition management program. PepsiCo’s chronic condition management program was able to drive greater savings on the basis of two primary factors: the program was pointed towards more specific health issues, and focused on a group that already had significant baseline healthcare costs.

According to research cited from the Centers for Disease Control and Prevention (CDC), 86 percent of all healthcare spending in 2010 went towards people with one or more chronic conditions. So, while a lifestyle management program can be a popular benefit among the workforce, it doesn’t necessarily have the same high potential for cost savings in the way a proactive, engaging program like PepsiCo’s chronic condition management initiative does.

Significance of PepsiCo’s wellness program results

I believe the PepsiCo study results are especially significant beyond the obvious conclusions. The results indicate corporate wellness programs focused on management of chronic diseases showed greater short-term return on investment (ROI) than lifestyle management. Instead of looking at this study and narrowing the focus to only those with chronic diseases present, it is important to note that the lifestyle component has greater future potential for impacting prevention of costly disease especially for those that already have a pre-chronic condition such as prediabetes. According to the study, “preventive interventions, the core of lifestyle management, can save money, but only if the risk is high in relation to the cost of the intervention.” The implications from this study are that employers interested in improving their employees’ health or productivity, can achieve both short-term ROI goals and impact the costs and health of long-term employees, who may not yet have a chronic disease but are at risk due to lifestyle and other factors. For information on how Paladina Health’s Direct Primary Care Medical Home program can contribute to cost reduction through preventive healthcare and chronic disease management,  view this case study.

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