Just days after city Budget Director Alex Holt met with Inspector General Joe Ferguson to discuss immediate measures the city could take to make revenue, the OIG’s office released a report stating serious doubts about the City’s $20 million wellness program’s deliverables.

Between 2012 and 2014, the City has spent more than $10.5 million on its Chicago Lives Healthy (CLH) program with the goal of improving employee health and reducing healthcare costs. But it hasn’t properly assessed the results and cost-effectiveness of the program and doesn’t have plans to, according to a report from the Office of Inspector general released Tuesday.

In 2012, Chicago, like many companies nationwide, adopted a wellness program, which offers premium discounts, gym memberships and other incentives to employees as a way to improve overall health and fitness and reduce health insurance costs. While there was a 19% decrease in the City’s workforce between 2003 and 2013, healthcare costs went up 43%, the IG says. The CLH website bills its program as a way to “improve health and help maintain high value health care benefits at a reasonable cost to employees.” Biometric screening and health coaching are requirements of the program.

85% of eligible city employees (or 23,130 of 27,339) are enrolled in the program, which is also made available to spouses and domestic partners. City employees that don’t want to participate pay a $50 monthly surcharge, which has garnered the city $1.9 million.

The City has no way of knowing the cost-effectiveness and health benefits of offering the program, because it has not “formally assessed” the program’s impact and no plans to do so, the report concludes. “The City has yet to determine a method for measuring healthcare cost savings and employee health improvements. Without such a framework, the City cannot make evidence-based, cost-benefit decisions about the future of CLH.”

The report advises the City to:

  • Set health status and health care savings targets and timeline
  • Connect performance measures like biometric data to targeted health performance outcomes
  • Start a study to ID and measure whether there’s a causal relationship between CLH and health status improvement and health care savings
  • Include specific health status and health care savings targets into an RFP for the next wellness program
  • Monitoring CLH on an ongoing basis
  • Publicly reporting findings

Healthways, the company operating the program, reports to the City on enrollment, coaching participation and employee health status. Its $24.0 million contract with the City ends December 31, 2015. In a press release, Inspector general Joe Ferguson said while “there are serious questions as to whether the program is achieving any demonstrable benefits and if it will ever do so,” the City has refused to make measurement changes. Ferguson sent his report to the city on June 25.