February 7, 2015
Disease Management: Savings at Pepsi
by Eric Bricker
Savings were $136 per member per month -- but the wellness/lifestyle management part of the program lost lots of money.
The second-most read article from Health Affairs in 2014 was a fantastic piece by the employee benefits professionals from Pepsi and researchers from the RAND Corp.
The Pepsi team and the RAND researchers evaluated PepsiCo’s wellness program over a seven-year period and found the following:
- The disease management component of the overall wellness program lowered healthcare costs by $136 per member per month (PMPM) and decreased hospital admissions by 29%
- Lifestyle management/wellness showed a return on investment (ROI) of .48 to 1 (in other words, it LOST money)
- Disease management’s ROI was 3.78 to 1
- Combined ROI for wellness and disease management was 1.46 to 1
- Findings were consistent with RAND’s workplace wellness programs study, which found that lifestyle management did not lower healthcare costs
- Lifestyle management program’s cost was $144 per participant per year
The article concludes that “blanket statements like ‘wellness saves money’ are not warranted.”
As employers evaluate their healthcare strategies, it is important to keep these findings in mind.