America’s obsession with gadgets continues to make its way into the workplace wellness arena, but whether wearable technology actually improves health outcomes and saves employers money in the long run is still a matter of debate. Some skeptics even dismiss the technology as a waste of money.

There’s a lot employers should consider when looking to integrate wearables into their wellness programs.

Strong consumer demand is driving workplaces to incorporate the latest gadgets into their wellness programs, says Springbuk co-founder Phil Daniels. His company — an Indianapolis health analytics firm that serves mid- to large-size employers — recently released the Employer Guide to Wearables 2.0, a three-part study that reviews key preferences, features and implementation considerations of employers for wearables in corporate wellness programs.

The study found that more and more, employers are turning to the incorporation of wearable technology in wellness programs for employees. Use of such devices is up 10% from 2015 findings, with 35% of employers now using wearables in their workplace wellness programs, Springbuk found. Meanwhile, nearly half of employers say they’re considering purchasing such devices over the next 12 months. At least one in six U.S. consumers use wearables in the form of either a smartwatch or a fitness band.

And for some employers, wearables are having a positive impact on both employees’ health and their own costs.

A recent Wearables in Wellness Case Study Report from the nonprofit Health Enhancement Research Organization (HERO) spotlighted companies like global energy firm BP, which started incorporating wearables in 2013. Today, more than 75% of eligible participants enroll in the company’s annual "Million Step Challenge," and 79% reach their goal.

BP has modified the program over the years to add goals beyond one million steps, as well as smaller goals for less active participants who are unable to achieve the million-step goal. As a result, the program has been consistently popular with participants, HERO says.

Despite such successes, the HERO report makes clear, wearables are most effective when employers understand their role in a larger wellness initiative.

“We see a lot of promise in the use of wearables as a component of a comprehensive workplace wellness program,” says Jessica Grossmeier, vice president of research for HERO. “Early research supports that a device, on its own, will not change health behaviors over the long term.”

Dave Hoinville, director of business development at myInertia, a health consultant, agrees, noting that other critical components must be incorporated into a wellness program for it to sustain success. These include everything from financial incentives and a culture of health to social connections and great customer service.

Is the price right?

There are many considerations for employers to review when shopping for the right wellness tools. The starting point is usually price, which Daniels says can range anywhere from about $30 or $40 to several hundred dollars per device. “The math adds up quickly if you’re spending that kind of money on 1,000 employees,” he notes.

Another critical factor is peer-to-peer connectivity — the social aspect of walking challenges and other
activities that he says can “incentivize” the workforce to break its sedentary desk lifestyle.

Daniels is encouraged that among slightly more than half of the subjects his company studied, improving the health of members was cited as the primary reason for using wearable devices. Another hopeful sign? Nearly 42% said the use of wearables was to drive behavioral change, Springbuk found. “Less important to employers was the coolness factor of wearables,” he adds.

Springbuk’s research includes responses from employers, benefit consultants and wellness vendors who participated in an award program involving more than 8,000 employers nationally. It includes a second survey of more than 820 employers who assessed the features, preferences and integration of wearables.

The ROI debate

The potential return on investment for employers that make wearables a centerpiece of their wellness program is significant, according to Daniels.

In a study of activity-tracking devices, Springbuk found that healthcare costs for employees with access to a Fitbit averaged $1,242 less after two years than those in a control group. After two years, employees who opted into the program had healthcare costs that were on average 24.5% less than that of a control group.

In recent years, however, the wellness industry has been under fire for staking ROI claims that critics say are exceedingly difficult — if not impossible — to prove.

Two such skeptics are Al Lewis and Vik Khanna, co-founders of a company called Quizzify, which emphasizes the need for employers to use healthcare literacy to move the needle on cost and outcomes. Khanna, who also is a healthcare entrepreneur, even co-authored an article titled “It might be time to throw your fitness wearable in the trash.”

Khanna says there’s no evidence that wearable products actually work. “It’s one of the great flaws with the scientific process in this country as it applies to the dissemination of good data,” he explains. Another issue is that the wearable industry is “playing to people’s needs, interests, desires [and] fascination with everything app- and gizmo-related,” he says.

Despite the never-ending push for more bells and whistles in wearables, Hoinsville believes simplicity is what resonates with most people. That means not having to worry about recharging devices every few days or wondering whether a Fitbit is waterproof. The most effective way for companies to better manage their overall medical care costs is to help employees understand and navigate a marketplace “filled with confusing, contradictory, non-evidence-based information,” Khanna suggests. “That’s what health literacy is all about.”

The goal should be to equip employees with “honest, credible, verifiable, evidence-based information so that they can both make healthier choices for themselves on a day-to-day basis,” he says, “but also, when it comes to using their medical care benefits, [to] do so in a manner that is safer, smarter and more cost-effective. And there is no wearable that gets them to either of those destinations.”

A predictive perspective

A corporate wellness program built around only an online health-risk assessment, annual checkup and several brown-bag lunch events will not influence employee behavior or ROI, Hoinsville agrees. But he’s certain that wearables have a positive impact, though it could take up to four or five years of sustained behavior change to actually lower medical claims.

“What we’re seeing is that if you can get people to the 4,000, 5,000, 6,000 steps per day average, then you will actually start to see a difference in their health outcomes,” he says, noting that most people are in the 1,500 to 2,500 range.

Daniels predicts devices will be added to the wearables category that do more than track heart rate and sleep or sitting time. As more data is generated, he believes, the industry will become more intelligent about the way it’s applied. For example, various recommendations could be made to workplace wellness programs based on the unique needs or challenges of each employee population.

Additionally, Daniels says, combining data from wearables with numbers from biometric screenings, medical claims, pharmacy usage, absenteeism, productivity and so on can have a powerful impact on individual and collective employee health.

“That data will become available on more true health factors, which is exciting for us,” he says, referencing the recent inclusion of artificial intelligence in his company’s software platform. “From a predictive standpoint, we’re actually using existing data to predict future health costs and disease states in at-risk members with 99% accuracy.”

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