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Workplace Wellness Programs Can Generate Savings

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  • Baicker, Katherine
  • Cutler, David M.
  • Song, Zirui

Abstract

With health care expenditures soaring, there is increasing interest in workplace-based disease prevention and health promotion as a means of improving health while lowering costs. We conduct a critical meta-analysis of the literature on costs and savings associated such programs, focusing on studies with particularly rigorous methods and examining effects on health care costs and absenteeism. We find that medical costs fall about $3.27 for every dollar spent on wellness programs, and absentee day costs fall by about $2.73 for every dollar spent. This average return on investment suggests that the wider adoption of such programs could prove beneficial for budgets and productivity as well as health outcomes.

Suggested Citation

  • Baicker, Katherine & Cutler, David M. & Song, Zirui, 2010. "Workplace Wellness Programs Can Generate Savings," Scholarly Articles 5345879, Harvard University Department of Economics.
  • Handle: RePEc:hrv:faseco:5345879
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    File URL: http://dash.harvard.edu/bitstream/handle/1/5345879/Workplace%20Wellness%20Programs.pdf
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    References listed on IDEAS

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    1. Deborah Peikes & Randall Brown & Greg Peterson & Jennifer Schore, 2009. "The Promise of Care Coordination: Models that Decrease Hospitalizations and Improve Outcomes for Medicare Beneficiaries with Chronic Illnesses," Mathematica Policy Research Reports 2de6fbb7f31a459cace4e08ce, Mathematica Policy Research.
    2. Chernew, Michael & Cutler, David & Keenan, Patricia S., 2005. "Increasing Health Insurance Costs and the Decline in Health Insurance Coverage," Scholarly Articles 2660660, Harvard University Department of Economics.
    3. Randall D. Cebul & James B. Rebitzer & Lowell J. Taylor & Mark E. Votruba, 2011. "Unhealthy Insurance Markets: Search Frictions and the Cost and Quality of Health Insurance," American Economic Review, American Economic Association, vol. 101(5), pages 1842-1871, August.
    4. Joseph P. Newhouse, 1992. "Medical Care Costs: How Much Welfare Loss?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 3-21, Summer.
    5. repec:mpr:mprres:6492 is not listed on IDEAS
    6. Neeraj Sood & Arkadipta Ghosh & José J. Escarce, 2009. "EmployerSponsored Insurance Health Care Cost Growth and the Economic Performance of US Industries," Mathematica Policy Research Reports 88ac266a27d2497c84f0a2db7, Mathematica Policy Research.
    7. Katherine Ho, 2009. "Barriers to Entry of a Vertically Integrated Health Insurer: An Analysis of Welfare and Entry Costs," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(2), pages 487-545, June.
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    Cited by:

    1. Pedersen, Morten Saaby & Arendt, Jacob Nielsen, 2014. "Bargaining for health: A case study of a collective agreement-based health program for manual workers," Journal of Health Economics, Elsevier, vol. 37(C), pages 123-136.
    2. repec:gam:jsusta:v:9:y:2017:i:9:p:1543-:d:110258 is not listed on IDEAS
    3. repec:spr:izalpo:v:6:y:2017:i:1:d:10.1186_s40173-017-0080-6 is not listed on IDEAS
    4. Christophe Moussu & Steve Ohana, 2016. "Do Leveraged Firms Underinvest in Corporate Social Responsibility? Evidence from Health and Safety Programs in U.S. Firms," Journal of Business Ethics, Springer, vol. 135(4), pages 715-729, June.
    5. Joanne Castonguay & Benoit Dostie & Christian Moroy, 2011. "Initiatives de Promotion de la santé au travail : Un examen des enjeux et du contexte au Québec et au Canada," CIRANO Project Reports 2011rp-15, CIRANO.
    6. Nikayin, Fatemeh & Heikkilä, Marikka & de Reuver, Mark & Solaimani, Sam, 2014. "Workplace primary prevention programmes enabled by information and communication technology," Technological Forecasting and Social Change, Elsevier, vol. 89(C), pages 326-332.

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