Why Wellness Does Not Work and Is Still Popular in Two Paragraphs

This is Austin Frakt writing at the Incidental Economist:

There are other ways wellness programs can fail to improve health or reduce spending. Through overuse and the over-treatment to which they can lead, screenings can increase spending without large health gains if they are not narrowly targeted. And, penalties for poor screening results could discourage use of valuable care. It should also be noted that, for better or worse, penalizing less healthy individuals undoes some of the risk-spreading function of insurance. 

Given all of this, why are wellness programs so pervasive? My hypothesis is, it’s supplier induced demand. People don’t understand that observational studies don’t support causal inferences. It’s easy for a wellness program marketing rep to cite seemingly glorious-sounding results. This is big business; the wellness industry is a $6B one. This would not be the first time Americans bought something that hasn’t rigorously been proven to work as well as advertised.