Employer Incentives for Healthy Behaviors on the Rise

Nick Vailas

Posted 2/28/12 on Healthcare Transparency Now

Mercer in late 2011 reported that employer incentives for healthy behavior of employees have grown.

Tougher wellness program design, coupled with price transparency of care, lead the American household to greater accountability for their health.

It is obvious when issues of the heart effect people’s pocketbook, you get greater participation.  It’s called “skin in the game”.  By giving people firm incentives to take care of their health is an essential component in solving our healthcare cost problem.

Any solution to the healthcare cost problem devoid of personal responsibility or “skin in the game”, price transparency will fail.

It is essential that to get desired behavior, people need to have “skin in the game” or a firm incentive as well as the tools to be able to take responsibility.

The Towers report said, “An astonishing 87% of large employers say they will add or strengthen programs or policies to encourage more health-conscious behavior. For a second year in a row there was a sharp increase in the use of incentives or penalties to encourage higher participation rates: 33% of large employers with health management programs provided incentives or penalties, up from 27% last year and 21% in 2009. Five years ago, the most common incentive offered by large employers for completing a health assessment was either a token gift or cash; this year it is a lower premium contribution (the median reduction in the annual contribution is $240).  Health assessments, which are intended to alert employees to possible health risks and to identify individuals who could benefit from disease or lifestyle management programs, are offered by most large employers (70%), but small employers are adopting them as well: 34% offered an assessment in 2011, up from 29% in 2010

Towers Watson’s survey for the National Business Group on Health, published in late 2011, confirms the toughening of incentives for wellness. “ despite significant investments in wellness and other health management programs, engaging employees in their health is proving to be a very difficult challenge. As a result, a growing number of employers are rethinking their current strategies and imposing tougher, more specific requirements for incentives. For example, this last year marked a twofold increase in incentive designs that pinpoint specific outcomes for weight control or cholesterol levels.

Another 33% of employers plan to adopt an outcome-based program in 2012 — “a staggering increase given only 6% of employers had such a program in 2010.”

Per the Towers, report, 13% of employers in 2011 Require employees with high health-risk-factor status or with chronic condition(s) to show evidence of active treatment management from specialty vendor and/or treating provider to receive reward (or avoid penalty). 18% expect to implement such a program in 2012.

Further, average spending per employee on incentives has risen 65% – from $260 in 2009, to $430 in 2010 – according to the National Business Group on Health and Fidelity Benefits.

About Brian Klepper

Brian Klepper is a health care analyst, commentator and a Principal in Health Value Direct.
This entry was posted in Analytics, Benefits, Consumerism, Health Care Cost, Market Dynamics, Medical Management, Quality and tagged , , . Bookmark the permalink.

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