Relevant rewards: Incentives inspire healthy behavior, but be prepared to invest and innovate

November 1, 2007

As the abundance of cliches would indicate, incentives are a powerful force. Health incentives, however, are becoming more sophisticated, and stakeholders need to adopt programs that work.

For years, employers have used gift cards, T-shirts and free gym memberships to promote wellness, but with mixed results. Programs that start off with a bang often end with a whimper, due to lack of C-suite support or failure to make programs relevant to employees' lives.

But a confluence of factors is shining new light on health promotion incentives, and employers, plans and workers are embracing the programs with vigor. According to "The Road Ahead: Emerging Health Trends," Hewitt's 2007 employer survey, 32% of respondents say they offer incentives for employees who participate in wellness or other health-related initiatives; half of those respondents adopted their programs this year. Fourteen percent of employers offer incentives to at-risk workers who participate in condition-management programs and comply with recommended therapies; more than three-quarters of those adopted their programs in 2007. Most respondents who didn't have incentive programs told Hewitt they were considering them for the future.

"I think we may be witnessing a tectonic health shift," says Ronald Loeppke, MD, MPH, chief strategy officer of Matria Health, a Marietta, Ga.-based health enhancement company.

To an observer, Dr. Loeppke's perspective may seem optimistic. Not a day goes by without a news report about the surge in diseases, the aging of America and soaring healthcare costs. In short, the health status of the typical American leaves much to be desired.

A handful of forward-thinking companies started doing just that in the 1990s. Using data that connected health with employee productivity, organizations began promoting programs that would encourage healthy habits, such as smoking cessation and weight loss. A decade ago, a free gym membership would have been a nice perk, but now employers are offering free gym memberships with the expectation that employees achieve fitness goals.

LEAP OF FAITH

Although gifts are still popular, some employers are underlining the correlation between lifestyle choices and healthcare costs by rewarding employees who participate in wellness programs with cash contributions to health savings accounts and cash bonuses.

"A decade ago employers were looking much more at disease management than at wellness," says Gregg Lehman, president and CEO of Minneapolis-based HealthFitness, and past president and CEO of the National Business Coalition on Health. "Wellness was seen as 'soft.' It took a leap of faith for a lot of employers to relate healthcare costs to lifestyle. Now the evidence is finally out there."