Here’s your health insurance. Now step on the scale.
More U.S. workers are being asked to submit to medical tests. Is this costcutting, lifesaving or both?
Once a year, employees of the Swiss Village Retirement Community in Berne, Ind., have a checkup that will help determine how much they pay for health coverage. Those who don’t smoke, aren’t obese and whose blood pressure and cholesterol fall below specific levels get to shave as much as $2,000 off their annual health insurance deductibles.
At Chicago-based Jones Lang Lasalle, a real estate firm, workers can earn up to $300 in cash for having a physical and hitting certain medical goals or completing health coaching programs.
Gone are the days of just signing up for health insurance and hoping you don’t have to use it. Now, more employees are being asked to roll up their sleeves for medical tests — and to exercise, participate in disease-management programs and quit smoking to qualify for hundreds, even thousands of dollars’ worth of premium or deductible discounts.
Proponents say such plans offer people a financial incentive to make healthier choices and manage chronic conditions such as obesity, high blood pressure and diabetes, which are driving up health care costs in the USA. Even so, studies of the effect of such policies on lifestyle changes are inconclusive. And advocates for people with chronic health conditions, such as heart disease and diabetes, fear that tying premium costs directly to test results could lead to discrimination.
Employee reaction has also been mixed. “It’s
an invasion of privacy,” says Bradley Seff, 54, a court reporter who in August 2010 filed a lawsuit against his employer, Broward County, Fla., for introducing such a plan.
Nonetheless, such plans appear to be the wave of the future. Faced with crippling health care costs, the number of employers embracing such programs inched up from 49% in 2010 to 54% last year — and more say they expect to do so soon, according to a survey by consultants Aon Hewitt. Big-name participants include insurer Unitedhealthcare, car rental firm Hertz, postage meter maker Pitney Bowes and media owner Gannett, owner of USA TODAY. More employers are expected to adopt them starting in 2014, when the health law — if the Supreme Court upholds it — would allow them to offer larger incentives or penalties.
“We’re seeing a big move in this direction driven by employers’ concern about rising health costs and their sense that employee behavior has a lot to do with high costs,” says Kevin Volpp, a professor at the University of Pennsylvania School of Medicine, who has studied the use of such incentives.
Cost savings seen
Leaders at Swiss Village credit their 8-year-old wellness program, along with a high-deductible insurance plan and an on-site fitness center, with slowing health care cost increases. Indeed, workers saw no increase in premiums from 2005 to 2011.
“We continue to embrace what we’re doing,” says Daryl Martin, executive director of the non-profit organization. Even so, a few high-cost medical issues among its 230 covered employees and their dependents last year caused Swiss Village to raise employee costs 14% this year. What’s important, Martin says, is that the company’s approach keeps health “at the forefront of what people are thinking about.”
Of the employers who offer such programs, about one-third offer financial incentives to those who undergo specific medical tests, according to the Aon Hewitt survey. And 5% of those tie the financial rewards or penalties to meeting specific medical-based standards. The survey also found an expansion of such tests is on the horizon: 57% of employers said they planned to add incentives for spouses and dependents in the next three to five years.
“A lot of costs come from spouses, but only 29% had incentives for spouses,” says Cathy Tripp, a senior vice president at Aon.
Employers will still have to craft plans to comply with federal and, in some cases, state requirements, Volpp says. The programs must be voluntary — meaning an employer can’t require a worker to participate as a condition of coverage — and the employer must offer a “reasonable alternative” to qualify for the reward, or to avoid the penalty for those who can’t achieve the goals.
But Dick Woodruff, vice president of federal relations for the American Cancer Society Cancer Action Network, worries that there’s no definition of what a reasonable alternative must include.
Some workers also complain that the programs are an intrusion into their private lives.
“They portrayed it as voluntary, which it isn’t, because if you don’t participate, they fine you every paycheck,” says Seff, the former Broward employee who is suing over the program. He has since retired on disability with back and neck problems. “I don’t think any employer should do it.”
In an effort to slow rising costs, Broward County in 2009 began asking workers to fill out a health information form and have a finger-stick blood test each year to check blood sugar and cholesterol levels, according to court filings. Workers who declined were docked $40 a month. Those who participated were offered disease-management programs if they had asthma, high blood pressure, diabetes, congestive heart failure or kidney disease. The county stopped docking those who declined to participate Jan. 1, 2011, after Seff’s lawsuit was filed, court documents show.
The lawsuit, which argues that the county’s program violates the Amer- icans with Disabilities Act, is likely the first of its kind in the nation, says Seff’s attorney, Daniel Levine in Boca Raton, Fla. Without ruling on whether the wellness effort was voluntary, a federal district court judge backed the county in April of last year, saying the plan fell under provisions of the law meant to protect bona fide benefit programs. The case is now on appeal. Broward County attorneys did not return requests for comment.
Some state lawmakers are also concerned about the potential for discrimination. Colorado passed legislation in 2010 that requires wellness programs to be accredited, bars penalizing workers for not participating or failing to meet a health standard — and allows appeals if an employee is denied an alternative. A similar bill was brought unsuccessfully in California last year, according to a February report by Georgetown University’s Health Policy Institute.
Concern for consumers
While supporting wellness programs in general, several patient advocacy groups warned the Obama administration last March that additional consumer protections are needed. Tying medical test results to financial incentives or penalties in premiums or deductibles could discriminate against some workers, especially those who already have health problems, the groups said.
“When you start increasing premiums or pumping up the deductibles, you’re making it more expensive and harder for people to access insurance,” says the Cancer Society’s Woodruff, who adds that offering gift cards or bonuses are a better way to reward people for participation.
Employers argue, however, that since they’re on the hook for the bills, they can ask workers to take more responsibility.
“House money, house rules,” says Ken Sperling, global health care practice leader at Aon Hewitt.
The first worker wellness programs, which began about a decade ago, rewarded simple participation: attending a health fair or filling out “health risk assessments,” with the worker perhaps receiving a $25 gift card in return.
Today, many offer discounted premiums to workers who meet standards related to blood pressure, cholesterol and weight, with the value of those discounts running between $30 and $60 a month, says Jim Pshock, founder and CEO of Bravo Wellness in Avon, Ohio. Bravo administers such programs for about 220 employers nationwide, including Colorado construction firm Oakwood Homes and Nashville’s Ardent Health Services.
Although employers may set specific goals — such as a body mass index (BMI) below 30, the level considered obese — many also reward achievement of less daunting targets. One employer rewarded workers if their test results didn’t worsen, Pshock says.
At Swiss Village, workers get $500 off their deductible for each of these measures: not smoking, having a BMI of 27.5 or less, a low-density lipoprotein cholesterol level (LDL) of 130 milligrams per deciliter or less, and blood pressure of 130/85 or less. LDL levels above 129 are associated with higher risk of heart disease, while blood pressure greater than 120/80 is considered a risk factor for heart attack and stroke.
A second tier of awards allows employees who approach those ranges to earn $250 per category. The testing takes place at an on-site health fair or at a doctor’s office, with the results gathered by an independent insurance firm that runs the company’s program.
The information is generally gath- ered by firms that run wellness programs or insurance plans. UnitedHealthcare, which offers its “Personal Rewards” program to large, self-insured clients, says it does not use the information to set premiums.
But do they work?
Given the available data, it’s hard to parse how much of the reported savings from such programs come from improved health, and how much from the frequent pairing of such programs with high-deductible policies.
“We just don’t know how effective (incentives) are,” Volpp says. There is pretty good evidence they help smokers quit, he says, but less that they prompt workers to lose weight and keep it off.
Volpp says the medical literature shows they work best when participants have choices: get below a certain BMI, or lose 5% of current body weight, for example. And, he says, rewards should be immediate. “If you want the employee to do a health assessment or (medical) screening, you should give them the reward right after they do it,” Volpp says.
At Jones Lang Lasalle, workers who make a pledge — on the honor system — that they don’t smoke, or will take a stop-smoking class, and achieve a healthy weight, get 10% off their contribution toward insurance premiums.
In 2010, the firm added a cash bonus program, offering $50 to workers who get a physical and another $50 for every one of four medical tests they take: weight, blood pressure, glucose and cholesterol, plus an extra $50 if they do all the tests. If they meet specified goals — or complete a coaching program — they receive the money as a cash bonus. Spouses and domestic partners are also eligible, says Howard Futterman, senior vice president of benefits.
Last year, 65% of employees participated. While it’s early, he says, indications are the program is having an impact on costs: Health spending rose 6% in 2010, but only 3% in 2011.
“Our long-term goal is to make health and well-being part of our culture and everyday values,” Futterman says. “When people start doing it naturally and you don’t have to pay them for it, that’s when you know you’ve succeeded.”