CASE STUDY: How a US employer saved $5 million in employee healthcare costs with a Fitbit-sponsored wellness program

As the largest source of health insurance coverage in the US, employers face the unique challenge of juggling the rising cost of providing insurance, managing worker health, and meeting employee demand for competitive health benefits. And US businesses are staring down an ever-growing spike in their workers' healthcare costs: Employers contributed more than $14,000 per worker with a family health insurance plan in 2018 — up more than 90% from 2004.

Wearable-based wellness programs have emerged as a popular choice to help employers allay rising costs by fostering greater workforce fitness. And tackling inactivity in particular makes sense for employers: The annual medical costs for consumers who walk 8,000 steps are around $3,000, while those who take 2,000 steps or fewer rack up annual costs over $10,000, for example. As both the providers of employee healthcare coverage and beneficiaries of a healthy workforce, US employers can potentially reap massive gains from using wearables to incentivize healthier employee behavior.

The Greater Dayton Regional Transit Authority (RTA), a public transit agency with 650 employees across Ohio, deployed a wearable-based wellness program with Fitbit to address the high insurance costs of an inactive workforce. Fitbit Health Solutions — the health services arm of Fitbit — shared data with Business Insider Intelligence demonstrating the RTA's success in reducing health costs. We also spoke with Fitbit Health Solutions COO Amy McDonough and RTA Workplace Wellbeing Supervisor Julie Bonsall to better understand the fundamentals of a successful wearables-based wellness program.

Challenge

CA sedentary workforce was driving up the RTA's healthcare costs. RTA bus drivers were inactive for large portions of the day, leading to weight gain and poor associated health outcomes that increased the RTA's medical bills. Weight gain among RTA employees was so pervasive that workers dubbed the tendency of employees to gain 50 pounds as the "RTA spread."

The negative health effects of inadequate physical activity — which include increased risk of breast cancer, diabetes, and heart disease — account for $117 billion in annual US healthcare costs, per the CDC. Moreover, a hypothetical US business with 1,000 employees faces absenteeism rates as high as 1,083 days a year due to physically inactive employees, with associated annual costs of $286,000. While the RTA rolled out an initial wellness program without Fitbit, the program didn't do enough to incite higher activity levels that resulted in any meaningful reduction in employee medical costs.