Do Corporate Healthcare Incentives Work?

Healthcare insurance incentives are somewhat successful, according to the National Business Group on Health, which says approximately 68 percent of its members either offer their employees discounts on premiums if they quit smoking or start eating more healthfully or begin exercise programs.  The companies have a vested interest in these programs because they keep healthcare costs down and add up to fewer sick days.

The impetus for healthcare incentives is the Safeway Amendment that is one part of President Barack Obama’s healthcare reform legislation.  The amendment lets companies reimburse employees as much as 20 percent of their insurance premiums if they take part in wellness programs.  This percentage rises to 30 percent in 2014 and to 50 percent with special governmental approval.  The amendment is so named because of the support of Safeway CEO Steve Burd, who wrote an op-ed piece in the Wall Street Journal in 2009 about how his company’s Healthy Measures program proved that incentives can slash healthcare costs by as much as 40 percent.

According to Harald Schmidt, a health policy expert and Harkness Fellow at the Harvard School of Public Health, “In principle, I think wellness incentives are a good idea.  But it all depends on how they are implemented.  If the focus is on just reducing the cost of healthcare rather than improving health, then you may have a problem.  The second issue is, we must make sure everybody has a reasonable chance of benefiting from incentive programs.  We really have a problem if some find it much harder than others, and especially if we hold people responsible for things that are in fact beyond their control.”

Kevin Volpp, a physician and director of the Center for Health Incentives at the University of Pennsylvania School of Medicine, offers a slightly different perspective.  “The reality is that we have a healthcare financing system that pays to treat people once they are sick.  There’s a growing recognition that health behaviors are a major driver of premature mortality and healthcare costs.  We need to rigorously test approaches that can better align incentives for patients with other interests of the health system, such as employers and insurers, so that resources go to keep people healthy.  Wellness incentives are a piece of that and can be used in ways that provide positive feedback to patients.”

Tags: , , , , , , , , , , , , ,

Leave a Reply