Incentives – What Works?

Employers and health plans spend a significant amount of money on incentives designed to improve employee health, but many are disappointed with the results. While employers want their workers to improve productivity and reduce absences, and health plans want individuals to adopt healthier behaviors and reduce their risks of developing chronic conditions, costly incentive-based programs oftentimes fail to achieve these results.

Financial incentives are widely used as a means of motivating individuals to take action to improve their health. Incentive payouts typically take the form of cash or cash equivalents, such as gift cards, reductions in premiums, or co-pays. As part of the Patient Protection and Affordable Care Act, group health plans will be able to give premium reductions of up to 30% to employees who participate in wellness programs, starting in 2014. Today, payers typically reward actions such as taking a healthcare risk assessment (HRA), signing up for a wellness program, or speaking with a disease management health coach. A few payers have begun rewarding actual behavior change outcomes, such as reaching a normal blood pressure or achieving a body mass index reduction of 10%.

There is increasing evidence that, when applied correctly, incentives can be somewhat effective in driving behavior change. The real problem is that when not designed or applied correctly – as is most often the case – incentives can be a waste of money, deliver a false sense of accomplishment to individuals, and distract employers and health plans from retooling their efforts to create effective programs to improve health and productivity.

In a recent survey by the Healthcare Intelligence Network that captured the latest trends in health and wellness incentives from 139 organizations. Almost two-thirds of survey respondents — 63 percent — offer health and wellness incentives for participation in health promotion programs.

The top five programs that have shown the most positive response to incentives are:

• HRA completion: 32 percent
• Weight management: 14 percent
• Preventive screening: 13 percent
• Onsite wellness or exercise: 13 percent
• Disease management: 11 percent

As you evaluate implementing incentives to motivate your work force to consciously choose to live a healthier lifestyle, consider the design and application of the incentives and pay close attention to best practices to achieve the desired results. A thoughtful, well designed incentive program can clearly be effective in driving positive behavior.

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