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Digital Wellness Programs Could Be Key to Engagement and Utilization-The HSB Blog 10/18/21

Our Take:

Digital health organizations' data-driven and personalized approach to employee wellness programs design will improve employee engagement by shifting more control of health management to employees. Digital health and technology products like wellness software, smartphones, apps, and virtual services, have provided organizations and businesses with enormous support in improving employees’ health and well-being.

The COVID-19 pandemic has shifted the fragmented approach of traditional wellness programs by introducing centralized and personalized digital health solutions in managing work stress and physical and mental health. Digitized solutions are particularly significant because the COVID-19 pandemic made remote working the new norm with accompanying spikes in work stress and mental health-related issues. However, the impact of wellness programs on saving cost, regardless of its form, traditional or digitized, remains unclear.

Key Takeaways:

  • According to the CDC, “work stress is the leading workplace health problem and a major occupational health risk, ranking above physical inactivity and obesity.”

  • 82% of large firms and 53% of small employers in the United States offered a wellness program, amounting to an $8 billion industry.

  • 80% of health care costs borne by employers are a result of preventable health conditions.

  • According to a 2020 Aetna International survey, employees believe technological innovations and digital tools could further help them to improve their health.

The Problem:

Chronic health conditions lower employees’ productivity and increase the number of missed workdays. For employee absenteeism caused by high blood pressure, diabetes, smoking, physical inactivity, and obesity, employers incur an annual cost of $36.4 billion. Consequently, strategic and successful companies establish wellness programs to reduce health-related absenteeism, increase employee productivity and mitigate costs.

While most businesses have embraced wellness programs as an essential component of their recruitment and retention strategy, a number of factors have limited employee engagement levels. According to a Harvard Business Review article entitled, “Why People Do - and Don’t - Participate in Wellness Programs” in a survey of 465 full-time employees in companies with established wellness programs, a lack of information and privacy concerns were the most prevalent reasons for nonparticipation in wellness programs. Employees are less likely to engage if they feel that the wellness program is intrusive or a channel for monitoring their health. Improved employee involvement in the wellness program decision-making is crucial for its effectiveness because driving lifestyle changes require individual interest and commitment.

With the COVID-19 pandemic, employers faced a different dynamic for employee wellness management, with most employees working from home. Studies and surveys reported high rates of burnout, mental distress, and increased substance use rates for employees working remotely; essential workers faced an even higher risk.

​​The Backdrop:

There are a number of issues that should be evaluated when looking at the role and efficacy of employee wellness programs. First, the early case for workplace wellness programs hinged on their ability to help employers manage employee health costs by reducing absenteeism, enhancing productivity, and reducing the overall cost of care. Driven by research that demonstrated many of the unhealthy lifestyle behaviors linked to reduced productivity are modifiable by behavior changes, wellness programs' claim of providing solutions that enhance workers' productivity gained in popularity. However, evidence that clearly shows that wellness programs reduce costs was limited. For example, a 2018 report published in the Journal of the American Medical Association (JAMA) stated that while 82% of large firms and 53% of small employers in the United States offered a wellness program, the report found no significant difference in the control and treatment groups when considering the impact of healthcare spending and utilization.

Secondly, enticing employees to take part in employee wellness programs has long been an issue, with rates of engagement generally staying at low levels. This is due in part to the fact that some employees consider workplace wellness programs to be intrusive and would prefer to manage their wellness from the comfort of their homes. Interestingly, many organizations are less supportive when employees opt out of formalized wellness created by the organization and often choose not to support or reimburse more personalized options that employees might pursue (ex: purchasing equipment for exercise at home priced comparably to gym memberships). While there are clear issues with monitoring usage and correlating effectiveness, well-designed self-management programs might be cheaper and more impactful for certain employees than taking advantage of a company's wellness benefits.

Finally, there is the issue of an employer's ability to reach the family decision-maker when it comes to wellness programs. For example, in the case of married employees when companies employ the male spouse, it is typically the female member of the household that makes the decision whether or not to engage in wellness programs. For example, a study by the Optum unit of United Healthcare women's uptake in workplace wellness programs was prompted more by physical appearance while 40% of the men engaged because they were prompted by their family. Furthermore, the study observed that mailers to the homes of employees that targeted female spouses had the potential of increasing the uptake rate of the male employees.

As a result, many believe digital wellness programs have the potential to vastly alter employee engagement with easier usage, greater customization, and improved ability to target users. All of which could lead to improved utilization.


Digital health applications for employee wellness have the potential to dramatically improve deidentified data collection, enhance workflow, increase productivity, and reduce the financial costs of employee health risks. The digital health wellness programs have filled a gap by providing one-stop solutions for employees that eliminate the hurdle of navigating numerous unrelated solutions offered by many traditional wellness programs. Even companies traditionally thought of as non-technology companies have become involved in digitized wellness program innovations. For instance, Peloton, an exercise equipment company, developed a corporate wellness program providing employees with subsidized access to its digital fitness membership. Similarly, Blue Shield of California saw an increased uptake in employees' engagement with its personalized digital wellness program. The organization reported that at the beginning of the pandemic, there was a significant increase in the organization’s employee engagement and a tenfold increase after the initial outbreak.

Another sweet spot is that digitized wellness programs collate and analyze data to provide personalized solutions that motivate employees’ engagement resulting in higher levels of success. For example, ongoing data collection allows providers to tailor solutions to changes in employees' lifestyles or health conditions. This can be particularly important in the area of mental health. As was broadly reported, during COVID-19 lockdown, there was a spike in the rate of anxiety, depression, and substance abuse as a result of many factors related to the pandemic. When this was combined with the shortage of mental health practitioners in the U.S, digitized solutions for mental health became an effective and expedient way to narrow this gap. Companies including Modern Health, Lyra, and Ginger all have mental health applications targeted at the employer wellness space.

Nevertheless, there remains the issue of effectiveness and return on investment. As noted in “Effect of a Workplace Wellness Program on Employee Health and Economic Outcomes”, when the authors looked at the impact of workplace wellness programs in the retail industry, they found no significant differences in clinical measures of health, health care spending, and utilization. Making wellness programs more effective requires a different approach that focuses on creating a personalized experience, informed outreach, and providing individualized incentives for improved engagement. Digitized wellness programs that focus on designing solutions that reduce cost while leveraging its unique approach of improving employee engagement through customized and centralized solutions for employees have the potential to drive this change.

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