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The percentage of employers and plans offering wellness incentives is steadily rising, and program designs are becoming more diverse.
When Oscar Health in New York started paying its members $20 if they got flu shots, the number doing so doubled. It also pays members $60 for a wellness visit, and they can earn up to $240 annually for meeting walking goals on a wearable fitness device.
Sentara’s Optima Health in Virginia is offering members up to $275 this year for walking while wearing a fitness tracking device. “We were looking at ways to reward people for being active,” says John DeGruttola, Optima’s senior vice president of marketing and sales. Research found people “had trouble relating to athletes and got discouraged,” he says, “so we wanted to reward people for just getting up off the couch.”
“We’re not doing this to get the best risk,” DeGruttola adds. “Anybody who signs up with us, we’re trying to get to be proactive with their health.” Through its member surveys, Optima Health has “found somewhere between $50 and $100 will make you at least think about” healthy behavior, he adds.
Employers have used similar tactics in workplace wellness programs for some time. But under Affordable Care Act (ACA) provisions taking effect in 2014, employers became able to offer incentives, either rewards or penalties, comprising up to 30% of premiums, deductibles and other costs, and up to 50% for tobacco programs.
The question now being asked is: do the programs work? “I think the evidence is mixed on the success,” says Gerard Wedig, associate professor at the University of Rochester’s Simon Business School. “If you think people are already well-informed and know what they ought to be doing, you had better weigh those incentives and make sure they’re strong enough to effect change.”
The percentage of employers offering wellness incentives is steadily rising, according to the latest survey by the National Business Group on Health and Fidelity (NBGH). And managed care organizations able to help employers with those efforts have what another expert describes as “a huge competitive advantage.”
Preliminary data show 80% of employers participating in the NBGH survey are offering financial incentives to workers in 2015, up from 74% in 2014. “We think it’s continued strong interest and an uptick,” says LuAnn Heinen, NBGH’s vice president of workforce well-being, productivity and human capital.
Employers are also spending more on wellness programs: A median of $600 per employee for 2015, up from about $500 in 2013 and in 2014. “It’s significant dollars,” Heinen says, noting the survey’s figures don’t include money spent on incentives for spouses.
Companies are setting up a variety of programs, some that offer financial rewards and others that use participation-based and activity-based incentives, she says. Other employers, including many hospital systems, have outcome-based incentives requiring employees to work toward certain biometric standards to receive financial rewards.
Some are also using penalties, with a tobacco surcharge being the most common type of penalty, and that has raised workplace fairness issues and at times led to litigation.
“There are just so many variations. We’re seeing the designs are complicated, because there are so many ways to get at this,” Heinen says. Employers might not financially reward employees for completing a health assessment, but the worker may need the assessment for a Health Savings Account (HSA) or to get into the pool of incentives, she explains.
“Sometimes it’s not about money changing hands,” Heinen adds. “Sometimes it’s points, sometimes it’s a premium reduction, sometimes it’s a contribution to reduce point-of-service costs for uncovered services to put toward your deductibles or copays. And it can be a combination of rewards and penalties.”
Employer wellness incentive programs also differ depending on philosophies, Heinen says. For example, she says, “There are companies that don’t use financial incentives because they’re all about supporting employee stress levels...and their focus is more on relaxation, healthy eating and physical activity.” Others, including UnitedHealth Group, focus on biometric scorecards for employees, she says.
On the individual side, the aim of consumer-driven health plans (CDHPs) is to help people take greater control of their healthcare, sometimes by coupling HSAs with wellness programs.
“With consumer-directed health plans, the feeling is we need to manage our health as best we can,” Heinen says. “And when you have a $4,000 deductible and no coverage beyond preventive services until you hit the deductible, companies feel they’re helping employees’ budgets” with wellness components--and also aiming to improve the population’s health as a whole.
“There are companies who say, ‘You give someone a big enough financial incentive and they’ll become engaged,’” Heinen says. Other companies “are really into social incentives: You get $50 if you do something, and you get more if your entire work unit does it.”
Heinen asserts most employers seem more interested in improving health risks than focusing on return on investment. She says it is difficult for employers to determine the cost impact, but some report positive effects on worker recruitment, retention, and worker productivity, along with less absenteeism.
Employers are also looking to health plans for expertise. “The health plan is in many cases the third party delivering this [wellness incentive program], or a vendor is--not the employer,” adds Heinen.
A positive impact of the ACA is that it has prompted employers and plans to look at wellness and health promotion programs to change behavior, says Ron Goetzel, PhD, vice president of consulting and applied research at Truven Health Analytics. “But the bad thing is that many have tunnel vision of what a wellness program is--and whether to pay people for not being obese...That may be a component, but that’s not the whole program.”
Goetzel, also a senior scientist at Johns Hopkins University, stresses that incentive programs, whatever their design, are not the same as comprehensive health promotion programs. Moreover, he says, programs seem to work best when embedded in a “healthy” corporate culture where senior managers and staffers believe that having a healthy workforce is good for the organization, and with a high level of trust between the employee and employer.
MCOs “don’t, unfortunately, control the culture,” Goetzel says. “However, what the health plan can do is create a partnership with the employer...and say, ‘We’ll work with you to create policies, programs and practices to support health.’” Employees also should help design programs, he says.
Incentives are a relatively “new wrinkle” in the process, Goetzel says. Research indicates that participation-based incentives work to boost engagement but it is less clear whether outcome-based incentives help to change outcomes. “If that’s all you’re doing [i.e., paying to achieve certain health outcomes], I think you’re bound to fail,” he says.
“If you’re paying people hundreds of dollars to change behavior, that’s a huge expense. It’s easier to have programs and policies that support healthy lifestyles,” Goetzel asserts, citing appropriately labeled “healthy” cafeteria food, on-site fitness centers and subsidized weight-loss programs as examples.
Each workplace will have its unique approach to wellness, and what works at Company A “may fall flat at Company B and vice versa...but there are best practices out there,” he adds.
Optima’s new rewards program, which includes nutrition, weight loss and physical activity components, is starting with individuals. In all, 200-plus individual and family plan members had completed personal health assessments from January 1 to January 13 as the first step to get the fitness device.
“The reason why we picked the individual population is they pay 100% of their premium, so they’re more motivated,” DeGruttola says. But he says the plan seeks to determine how the fitness-device program might also work for employer groups. Of Optima’s 451,000 members, about 34,000 are individual and family plan; the rest are group members and in Medicare and Medicaid.
“We want to see the program grow,” DeGruttola says. “We do see interest from employers...so once we know [the device’s use] is scalable, we’ll offer it to them....We already have about 90,000 members in group wellness incentive programs, but without trackable devices.”
“We know more than 40% of healthcare costs are due to modifiable behavior,” he says. “...We’re just trying to get people to be more aware of it,” and become more fit.
Judy Packer-Tursman is a freelance writer from Washington, D.C.