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By RONALD R. LOEPPKE, MD, MPH, FACOEM, FACPM, vice-chairman of U.S. Preventive Medicine and co-chair of the company's International Advisory Board, as well as the chairman of the board of the Integrated Benefits Institute and board member of the American College of Occupational and Environmental Medicine.

Employers face a harsh certainty these days. Poor employee health will continue to derail profitability unless innovative solutions put the train back on the track. To continue business as usual--which maintains a "sick care system" focused on a rapidly growing burden of chronic health conditions--is unsustainable.

Studies are documenting how organizations with comprehensive wellness programs achieve remarkably lower total healthcare costs, with shorter sick leaves, reductions in long- and short-term disability, and improved general workforce health. Medical costs fall by about $3.27 and absenteeism costs fall by about $2.73 for every $1.00 spent on comprehensive workplace wellness and prevention programs, according to a Harvard meta-analysis study of the literature titled "Workplace Wellness Programs Can Generate Savings" published in Health Affairs.

High employee engagement and active participation are required to achieve the desired health outcomes and costs savings. Employees not only must be educated about the benefits of joining the program, they also must be motivated to improve their health behaviors. It is not easy to convince people to put down the cigarettes or go to the gym instead of the sofa. Appropriately structured incentives, often referred to as "carrots," play a starring role in a successful preventive medicine program.

To date, a variety of incentive strategies have been used to promote healthy lifestyle choices and discourage behaviors and attitudes detrimental to good health. Incentives can be extrinsic or intrinsic as well as tangible or intangible, and often include peer recognition; group competitions; merchandise; vacation days; cash for allocations to a 401(k) or flexible or health savings accounts; or reductions in healthcare premiums.

In a 2009 study, the insurance brokerage and benefits consultancy Aon surveyed 1,313 employers nationwide and found that just greater than 40 percent offered gift cards, the most common incentive used, followed by premium reductions (28 percent) and cash awards (24 percent). Almost 40 percent of employers offered an incentive value of $50 to $249 per employee per year.

Some employers are linking an individual's biometrics and lab values--such as body mass index, blood pressure, lipid profile and glucose--directly to the incentive they receive. This approach links their current health status to the incentive and only rewards optimal results. However, this approach does not provide an individual the opportunity to be rewarded for participation in incremental behavior change. Also, this type of health status incentive is often an enrollment-based discount, rather than the incentive being based on true engagement through coaching, educational programs and other health improvement initiatives. As a result, there is no real tracking or recognition nor ongoing motivation for the individual to increase their knowledge and make lifestyle changes throughout the year between assessments of their health status. Furthermore, that type of health status incentive not only risks low participation, but low engagement as well.

Whichever method employers use, incentives alone do not typically achieve the participation and engagement rates needed to drive significant health improvements in a population. A 2008 cross-sectional study published in the Journal of Occupational and Environmental Medicine, involving 124 employers, 882,275 eligible employees and 344,825 completed health risk assessments (HRAs), showed that the strongest predictors of HRA completion rate were:

1. Commitment to a culture of health

2. Comprehensive communications about the wellness initiatives

3. Incentive value

Titled "A Cross-Sectional Analysis of Factors Associated with Employee Participation in Health Risk Assessments," the study showed that the commitment to a culture of health and good communications about the wellness initiatives were more powerful influencers to participation rates than the value of the incentives. In fact, to achieve a 50 percent HRA completion rate, employers with a low level of commitment and communications needed an average incentive value of approximately $120, whereas employers with a high level of commitment and communications only needed approximately $40.

Workplace prevention and wellness programs should address the privacy and other concerns of employees, while at the same time provide employers a robust and objective means to engage and reward their employees for participating in healthier lifestyles.

In addition, another paramount consideration in designing an appropriate and effective wellness incentive strategy is to understand and adhere to the various laws that are related to these types of initiatives. These include, but are not limited to, the Health Insurance Portability and Accountability Act (HIPAA), the Affordable Care Act (the federal healthcare reform legislation), the Americans With Disabilities Act (ADA), and the Equal Employment Opportunity Commission's published rulings on the Genetic Information Nondiscrimination Act (GINA). Employers are encouraged to seek professional legal, tax and accounting advice when building their workplace wellness initiatives.

As the science of incentive research grows, perhaps more precise formulas will emerge, and the process of motivating healthy behaviors will require less artistry and intuition. What researchers do know now is that employers are in a unique position to reduce the full costs of poor health by creating a culture of health with a sustainable healthy workplace environment built on the pillars of prevention and supported by appropriate and effective incentives that motivate employee participation and engagement.

January 1, 2011

Copyright 2011© LRP Publications