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Wellness Incentive Programs: A Double-Edged Sword

The principal tenet of the Epicurean philosophy proffers “that men’s lives should be governed by pleasure, not thoughtless self-indulgence, but pleasure rationally calculated” (West, 2008).  With tranquility as the ideal, the epicurean lifestyle encourages indulgence in activities that promote harmony and pleasure. America’s zealous embrace of this philosophy has unfortunately resulted in the inclusion of thoughtless self-indulgence, which is a significant contributor to the nation’s rapidly increasing obesity rates.

The National Business Group for Health reports that as obesity rates have climbed, a rise in associated health conditions has also become evident.  In the “period 1997 to 2006, the number of working-age adults who report being diagnosed with at least 1 of 7 major chronic conditions (heart disease, hypertension, stroke, diabetes, emphysema, asthma and cancer) grew by 25% to a total of nearly 58 million,” and obesity is believed to be largely responsible. With this information, employers are becoming more aware of the negative effects associated with brash indulgence in unhealthy lifestyles.  Unhealthy lifestyle choices are associated with high direct and indirect costs, such as disability, workers compensation, absenteeism and lack of productivity (National Business Group). In a recent survey of 507 employers on their health program decisions and strategies, nearly two-thirds of respondents reported their biggest challenge to managing health care costs was their employees’ poor health habits. The following figure illustrates the significance of this concern relative to other challenges employers encounter in health cost management.

As employers struggle to create cheaper options to provide coverage for employees, they have adopted wellness incentives programs, which largely focus on promoting weight management, healthy food intake and increased physical activity.  Authorized by the Patient Protection and Affordable Care Act (PPACA), wellness incentives seek to encourage healthy behavior while prohibiting employee health status discrimination (Terry & Anderson, 2011). These programs encompass financial incentives for employees to engage in health management under the condition that a “‘reasonable alternative standard’ or waiver for employees with medical conditions precluding them from achieving the health standard” (Terry & Anderson, 2011).  To reward employees for “healthy” behavior, employers will offer significant discounts on health insurance for employees.  For example, part of Obama’s healthcare reform is the Safeway Amendment, which allows employers to provide employees with reimbursements of up to 20% of insurance premiums (Terry & Anderson, 2011).

Initially, these programs appear to be an effective way to improve the health behaviors of employees while reducing costs for coverage.  However, experts warn health management programs may unfairly shift healthcare costs to employees, especially if the incentives are poorly structured (Terry & Anderson, 2011). For example, the Safeway Amendment enables employers to increase premiums for all employees by $500.  The employer will pay back the $500 if the employee meets a certain target, which raises questions pertaining to ethical sensitivity. Opponents assert outcome-based incentives assume that every person has a reasonable chance of benefiting from these programs (LA Times).  Rather, they emphasize the need to find a balance of responsibility, arguing that people may have health issues beyond their control, such as genetically related, pre-existing or disability problems. Both the American Heart Association (AHA) and American College of Occupational and Environmental Medicine (ACOEM) express concern with incentives tied to health insurance premiums and deductibles without significant consumer protections. Asserting these “incentives should be used to encourage participation in these [wellness] programs and should not be tied to status, biometric results or meeting outcomes from health improvement programs,” the  ACOEM offers an alternative: participation-based incentives. (Terry & Anderson, 2011).

Furthermore, determining an individual’s premium based entirely on the numbers does not account for external factors affecting their health choices. The dependency upon quantitative data (e.g., Body Mass Index Scores) may hamper consideration of the influence of ecological contexts upon an individual. The AHA warns that several employees, particularly the most vulnerable, lack access to healthy affordable foods and safe places for physical activity. Thus, the expectations of individuals created by “healthism” are sometimes not feasible with the structure of society. This leaves certain groups of working individuals vulnerable to financial burden, targets for stigma, and moral retribution. Concurrently, it is important to consider the fairness of incentive programs for those employees who practice healthy lifestyles to subsidize health plan premiums for those unwilling to try to improve their health.

Ultimately, health management programs are recent installments and need further research to determine its cost-effectiveness.  Several factors, such as behavioral economics and potential ethical issues, must also be acknowledged when evaluating the efficacy of these programs.  In addition, for wellness incentives to be effective and fair, they need to be structured so that employees constrained by environmental boundaries to healthy living have options that support healthy choices. Wellness incentive programs show strong promise for encouraging healthier lifestyle choices for employees and reducing costs for employers; however, they face the daunting challenges to avoid cost-shifting to employees, consider employee ecological contexts and motivate those lost in the world of skewed Epicureanism to practice healthier living.

References:

West, D. (2008). Lucretius and the poetry of argument. Renaissance Studies, 5, 242-249.

http://www.businessgrouphealth.org/benefitstopics/topics/0039.cfm/topic=0039&desc=Healthy%20Lifestyles

Terry, P. E., Anderson, D. R. (2011). Finding common ground in the use of financial incentives for employee health management: A call for a progress-based approach. American Journal of Health Promotion, 26.

http://www.businessgrouphealth.org/pdfs/NBGH%20WeightyMatters_Final.pdf

http://www.towerswatson.com/assets/pdf/1345/TW_15565_NBGH.pdf

http://articles.latimes.com/2011/jan/03/health/la-he-health-incentives-20110103

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