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Chicago wellness program all cost and no savings?

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Chicago Mayor Rahm Emanuel's signature wellness initiative may be just a 90-pound weakling, the city's Inspector General Joe Ferguson is suggesting.

In a report issued Tuesday, the city's watchdog said there are “serious questions” about whether the much-promoted program, which aims to get city workers to shape up or pay more, actually has accomplished much except to spend money.

“While the city spent nearly $10.5 million in taxpayer resources from 2012 to 2014 to improve employee health and reduce health care costs through (the program), the city has not formally assessed the program's impact in either area and, at present has no plans to do so,” Mr. Ferguson said. With national research mixed on the subject, the city needs to set up “specific performance measurements and analysis” to find out.

Under policies implemented by Mayor Emanuel, workers have to participate in Chicago Lives Healthy screenings, counseling and health activities or pay an extra $50 a month for their health insurance. Not surprising, 85% of benefits-eligible workers and dependents have signed up.

But no formal measure of success has been adopted, Mr. Ferguson wrote, and the city's health care tab keeps rising.

“In fact, despite a 19% decrease in its workforce between 2004 and 2013 (41,550 to 33,554 full-time equivalents), the city incurred a 43% increase in health care costs.”

The city's current $24 million contract with American Healthways Services L.L.C. a Franklin, Tennessee firm that runs the program, is due to expire at the end of the year. The company had received just under $10.5 million from the city through 2014.

Says the city, in an emailed statement: “We agree that the city must be vigilant in its stewardship of taxpayer resources and are always striving for efficiency, cost reduction and program improvements. And while participation is one metric to measure the program, ultimately we would like individual progress — in quitting smoking or becoming more healthy — to serve as a measurement as well. ...There is no question that all of our programs taken together have been effective at providing coordinated and integrated care ensuring better health at a lower cost.”

Greg Hinz writes for Crain's Chicago Business, a sister publication of Business Insurance.