Health Incentive Plans Pay Off

March 10--Tina Nanos' life was bogged down by her weight for years.

"I thought about it. I was overweight for a very large portion of my life," said Nanos, who lives in Wallingford with her husband and two children, 13 and 5.

But when her weight "skyrocketed" after having her second son, so much so that sitting in an airplane seat and even walking were uncomfortable, she still didn't change.

Then her employer and health insurer, UnitedHealthcare, offered her a cash incentive. She shed 101 pounds in two years and saved $1,200 on her annual premium.

"Basically, they wanted to inspire employees to empower themselves and live healthier lives. ... Learning a little bit about the program, I saw the first year, 'Oh boy, I'm not going to be able to get my points and save on my premiums because I'm overweight,'" Nanos said.

Nanos changed her lifestyle. She exercises daily on an elliptical machine, she serves smaller portions at mealtime and she even bought smaller dinner plates. Nanos met the benchmarks annually, and she feels better.

"I started to see the weight fall off. I became inspired, empowered," Nanos said.

UnitedHealth Group's rewards program is one of many offered by insurers. They are particularly attractive to large employers hoping to reduce medical expenses, improve productivity and reduce absenteeism. The percentage of large employers that offer monetary incentives has increased each of the past three years, from 33 percent to 48 percent, according to a 2012 Mercer National Survey of Employer-Sponsored Health Plans released in November. The Mercer survey included responses from more than 2,800 employers of various sizes.

The incentive programs come at a crucial time.

An increasing number of Americans are overweight or live sedentary lifestyles; there's an upheaval in health care, as new rules related to the Affordable Care Act take effect; and many employers are shifting a bigger share of medical care costs to workers. Facing ever higher insurance premiums, a discount on an the employee-paid contribution to health insurance offers welcome relief for some workers.

UnitedHealth spokesman Benjamin Goldstein said an average family in Connecticut pays an annual medical premium of $3,801, which could be reduced to $2,601 if the family received the maximum $1,200 annual discount on premiums.

Savings in these types of health incentive plans are linked to having a checklist of good health practices including a yearly physical, blood metrics and an improved body-mass index, which is determined by age, gender and height.

The approach has its critics. Advocates for people with cancer and other chronic conditions argue that if financial incentives are tied to improving health, people who are incapable of meeting those goals will simply pay more for health insurance.

Old Idea, New Twist

Employer-sponsored programs to get workers to live healthy lifestyles date back decades. What's relatively new is the monetary aspect, whether its gift cards, raffles, contributions to a health savings account or discounts on health insurance premiums -- all of which have become increasingly popular.

Most health insurers offer their customers, which is to say employers, some framework for improving their employees' overall health while managing diseases including diabetes. They encourage employees to eat better, quit smoking, exercise, get regular checkups and more.

Despite the encouragement, participation was about 10 percent without an incentives, said Paul Coppola, Aetna's head of Wellness Program Strategy & Development.

"When you start to put an incentive around it, and you marry that with an organizational commitment, we can see that go over 25 percent even upward of 50 percent," Coppola said. "And we've had employers in organizations that are really committed to the success. ... In those cases, we can even see participation in the 70s, 80s and 90 percent."

Bloomfield-based Cigna Corp. said its customers have seen twice or three times greater participation in health management or wellness programs when a financial incentive is used, company spokesman Mark Slitt said. The number of employers that use Cigna's Incentive Points program -- offering financial incentives for a health assessment, biometric screenings and health coaching -- increased by 52 percent last year over the previous year.

Anthem Blue Cross and Blue Shield in Connecticut, the state's largest health insurer by membership, has had a similar experience.

"We have pretty good programs, but our biggest challenge is getting people to actually engage and fully participate in them," said Anthem's chief medical officer, Dr. Peter Bowers. "Clients who put financial incentives to engage with diabetes ... we saw an increase almost two-and-a-half times better engagement in the programs when there was a financial incentive versus when there wasn't."

So, what's in it for the employers? Plenty. They hope that their employees will be happier, more productive and less expensive in terms of medical costs, especially for large companies, which often are self-insured.

Health management or wellness plans are the employers' top long-term strategy for controlling health spending, according to the Mercer survey.

"While most employers believe that health management programs are making a difference, proving ROI [return on investment] remains a challenge for many," Tracy Watts, a partner in Mercer's Washington, D.C., office, said in a prepared statement accompanying the report. "That said, there are many examples of programs saving lives by identifying a ticking time bomb and getting that person immediate care."

The most common incentive employers offer is a reduction on health insurance premiums for workers who complete a health assessment. Increasingly, though, employers want people to achieve a medical benchmark or goal to receive the discount, the Mercer report said.

Not Always A Win-Win

It's the outcome-based incentives that concern advocates for people with chronic conditions, who could be penalized for conditions they cannot affect.

"The way they do it is they'll market a program to employees as a rewards program and offer a policy that basically allows workers to buy down a high deductible by achieving certain biometric targets," said Dick Woodruff, vice president of federal relations for the Cancer Action Network, citing a Georgetown University health policy study.

"So, the employer will increase the health plan deductible from where it was, say $500, up to $2,500, and then offer employees a wellness policy that allows them to earn credits, you know, $500 each by demonstrating appropriate body mass, blood pressure, cholesterol levels," Woodruff said. "And if they're all real healthy, they get back down to the $500. And if they don't, then they're out of luck."

If an incentive program is poorly designed, it can shift costs to workers in the greatest need of health care, run afoul of federal anti-discrimination and privacy laws and affect which workers stay in employer-based health plans and which end up in a health insurance exchange, according to a policy paper written in February 2012 by JoAnn Volk and Sabrina Corlette of Georgetown University'sHealth Policy Institute.

Incentive programs that require employees to meet certain standards, benchmarks for cholesterol, for example, can be problematic.

"A 'standard-based' wellness program may become more attractive to employers seeking to cut costs, but it increases the risk that wellness programs will result in higher premiums or cost-sharing for workers based solely on their health status," Volk and Corlette wrote in their paper.

Woodruff, at the Cancer Action Network, said the real question is what alternatives employers offer to people with chronic conditions if they are unable to meet the employer-defined health targets, or outcomes. The Georgetown paper identifies federal guidelines that employers have to follow when they offer an outcomes-based incentive, but Woodruff maintains that employers have wide latitude.

Proof In The Numbers

Three in four large employers surveyed last year by Mercer said their health-management programs are having a positive influence on their medical cost trends.

The Massachusetts Mutual Life Insurance Co. has had employee-health services since the mid-20th century. Those efforts have been intensified since at least 2004 at the Springfield-based life insurer, which employs 6,700 and has major operations in Enfield.

Employers recognize that financial incentives alone won't make a lasting change in a person's behavior, said Dr. David Artzerounian, vice president and chief medical officer of MassMutual. It's also important that a company create a culture of health that could include fitness centers, food choices in the cafeteria and vending machines, flu shots or other health services.

MassMutual offers financial incentives that include $200 to employees to get biometrics measured, such as blood pressure, body-mass index, cholesterol, blood sugar and waist circumference. That money is put into a health savings account for the employee, and additional funds can be added for other behaviors, for instance, if a person self reports 150 minutes of exercise per week. The contributions reach a maximum of $500 per employee and an additional $500 for a spouse.

Over 75 percent of people in MassMutual's health plan take part in the financial incentives and wellness programs.

"We've looked at a cohort of employees who had biometrics in 2011 and 2012," Artzerounian said. "If you just look at the pure cholesterols, blood pressures, weights, glucose measurements and waist circumference on our employees on a year to year basis, they all have improved significantly. There's no better objective measure of an improvement in health than those sorts of measures."

Still, Artzerounian is cautious about overstating the benefits.

"These financial incentives will get people moving in the right direction, but making this sustained behavioral change is really what it's all about," Artzerounian said. "You and I both know many people who have lost weight and gained it back. It's just sort of a fact of life."

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