UA Research Ties Insurance-Based Wellness Programs to Reduced Hospitalizations

The new study has ramifications for the effectiveness of expanded incentives allowed by the Affordable Care Act.
March 6, 2013

Workplace wellness incentive programs may decrease hospitalizations, but not overall health claim costs, according to a new paper by professor of economics Gautam Gowrisankaran of the University of Arizona Eller College of Management, out now in Health Affairs. The paper's findings constitute the first rigorous evaluation of a comprehensive, insurance-based wellness program with financial incentives for participation.

Gowrisankaran and colleagues at Washington University in St. Louis and Harvard Medical School studied the effectiveness of a program that tied employees' eligibility for the most generous health plan to participation in a wellness program. The employer, St. Louis-based hospital system BJC HealthCare, launched the program in 2005 with the goal of improving its employees' health.

The researchers found that the program was associated with a 41 percent decrease in hospitalization rates for conditions targeted by the incentives, but no net change in health claim costs. They also found widespread participation in the health risk assessment and health fairs.

"Expansions of allowable incentives under the Affordable Care Act may lead more employers to adopt and increase insurance-based wellness incentives," said Gowrisankaran. "We believe that these incentives may lower associated hospitalizations and may spur increases in individual health status and workplace productivity."

However, he cautioned, expanded incentives under the Affordable Care Act are unlikely to greatly reduce health care spending in the short term and should not be relied upon as the foundation of efforts to control spending.

"Health-care costs are complex, so there is no easy answer to reducing them, and a single intervention isn't likely to make a dramatic difference," Gowrisankaran said. "It will be important to continue to follow this intervention and to study similar interventions in other settings in order to verify and further validate these findings."

The UA Eller College is internationally recognized for pioneering research, innovative curriculum, distinguished faculty and excellence in management information systems, entrepreneurship and social responsibility. U.S. News & World Report ranks the Eller undergraduate program No. 14 among public business schools and three of its programs are among the top 20 – entrepreneurship, MIS and management.

U.S. News & World Report ranks the Eller MBA Full-Time program No. 57 in the U.S. The college leads the nation's business schools in generating grant funds for research. In addition to a full-time MBA program, the Eller College offers an evening MBA program and the Eller Executive MBA.

The Eller College supports more than 5,000 undergraduate and 600 graduate students on the UA campus.