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Health Care Reform and Incentives For Healthy Behaviors

The health reform debate raging in Congress isn’t only about fixing the nation’s health care system. Lawmakers also want to keep Americans from getting sick in the first place by encouraging healthy lifestyles. Since it’s not always easy to persuade people to do the right thing, health reform legislation would borrow a strategy some companies have used to get their employees’ cooperation: gift cards, merchandise or even cash as a reward.

Under the House health care reform bill passed in November, small businesses could get grants of up to $50,000 to help pay for employee wellness incentive programs that are approved by the secretary of Health and Human Services. The companies could provide a financial reward for workers who participate, but such incentives could not be used to reduce an individual’s health insurance premium or out-of-pocket expenses.

However, under the Senate bill now under consideration, workers who participate in proven health promotion or disease prevention programs could be rewarded with as much as a 50 percent insurance premium discount.

Insurance premium discounts

It is likely that some kind of wellness program with rewards will be part of any final health care reform legislation. But whether the final measure will allow financial incentives in the form of insurance premium discounts remains to be seen.

Patient advocacy groups, unions, consumer groups and AARP fear that the Senate’s insurance premium discounts could be awarded for successful wellness results, and that could mean lower costs for the healthy members of employer health plans—and higher costs for those who are less healthy. So even though both House and Senate bills clearly prohibit insurers from charging higher premiums based on a patient’s health or preexisting medical conditions, the concern is that a rewards system linked to premiums could provide a loophole allowing discriminatory pricing.

Unhealthy workers would end up paying more than their coworkers who succeed in a wellness program. As the gap grows, critics argue that coverage will become unaffordable for those who need it the most, and a major goal of health reform will remain out of reach.

Several business groups that support the wellness program measure in the Senate—including the U. S. Chamber of Commerce, the National Association of Manufacturers and the Business Roundtable—say these incentives are a good way to control health care costs, improve productivity and help workers stay healthy. Current insurance rules allow a maximum reward of 20 percent of the cost of coverage, which the Senate bill would raise.

“My amendment would guarantee that the incentive is strong enough for Americans to want to participate,” Sen. John Ensign, R-Nev., who cosponsored the provision, told reporters when the Senate Finance Committee approved it in September. “This isn’t just about offering financial incentives; this is about making Americans healthier.”

Money talks

Studies have shown that nearly 80 percent of health care costs in the United States are due to chronic illnesses, many of which are preventable or at least controllable—including hypertension, diabetes and heart disease. But experts don’t always agree on what health problems can be addressed by wellness programs and what kind of incentives—how much, how often—are most effective.

Rewards have to be carefully designed, says Kevin Volpp, M.D., director of the Center for Health Incentives at the University of Pennsylvania. People respond better when the reward is something they can see—a gift card or a check—instead of a smaller premium deduction in their paycheck, he says. Rewards that are more immediate, he says, are better than ones earned at the end of a year.

Both the House and Senate bills recognize these challenges and therefore require scientifically proven or “evidence-based” prevention programs. Both bills also would create task forces to evaluate and publicize successful prevention services. Additionally, the Senate bill would provide technical assistance to employers and evaluate their wellness programs.

Quit smoking, gain hundreds of dollars

Even though an increasing number of U. S. companies are offering wellness programs, there’s no guarantee they will work for everyone who joins. For example, antismoking programs have had some success, but Volpp discovered the right rewards make them even more effective.

He enlisted 900 General Electric workers in a recent landmark, three-year antismoking study published in the Feb. 2009 New England Journal of Medicine. Half of the workers took part in the antismoking program with no financial reward. The other half got $100 if they completed the program and $250 if they quit smoking within six months. They earned an additional $400 if they stayed tobacco-free for six more months. After a year, the group that received financial incentives had a quit rate nearly three times higher than the group with no rewards.

Volpp says what kind of healthy habits a wellness program targets also makes a difference. Some people may complete a program that prompts them to take their medications faithfully, but just taking their medicine as prescribed may not always improve problems like high blood pressure. Vaccinations and cancer screenings, however, are highly effective means of avoiding illness.

Some 58 percent of companies offering health benefits also provide weight loss programs, gym membership discounts, smoking cessation programs, nutrition classes or personal health coaching, according to a recent survey by the Kaiser Family Foundation and the Health Research and Educational Trust. Eleven percent of those companies entice employees to participate by offering a financial reward. At New Jersey-based Johnson & Johnson, for example, employees can receive a $500 medical benefit plan credit for voluntarily completing a health risk assessment that can identify any potential health problems.

At Safeway, a nationwide supermarket chain headquartered in the San Francisco Bay area, 16,000 nonunion workers are enrolled in the company’s Healthy Measures program and can earn an $800 premium discount ($1,600 for couples) if their cholesterol level, blood pressure and body mass index—a measure of weight—is within a healthy range and they don’t smoke. Those with failing scores can get a second chance if, for example, they lose a certain amount of weight or stop smoking.

A Safeway spokesman declined to say how many employees have received the $800 reward. (The program is not available to about 100,000 union workers at Safeway whose contracts provide free preventive care including weight loss and smoking cessation programs, a union official says.)

Some states, too, offer incentives to their workers.

State of Ohio employees and their spouses enrolled in a state-sponsored health insurance plan can receive up to $100 each annually for completing a health risk assessment, working with a health coach, getting health screenings (blood pressure check, blood glucose and cholesterol tests) and participating in a “lifestyle change program.” More than 33,000 employees have received rewards totaling $3.3 million in fiscal year 2009. Chronic-condition management alone—offered as part of the health-coaching program—has saved $17.1 million between October 2007 and February 2009, says a spokeswoman for the Department of Administrative Services.

Penalize older people?

Still, some people may fail in these programs through no fault of their own, Nancy LeaMond, AARP’s executive vice president told congressional staff and reporters at a briefing this week.

“Weight, cholesterol and blood pressure problems,” she says, “are caused not just by behavior but are also strongly linked to genetics, physical and mental disabilities, lack of community resources or other life priorities, like caregiving or the need to work multiple jobs to pay family expenses.”

LeaMond also says that many of these conditions become more prevalent with age and can be more difficult to control in low-income and minority communities because of economic hardship, unsafe neighborhoods or limited access to healthy food.

To deal with these inequities, employees in the Safeway program who cannot reach a certain target may still receive the $800 discount if their doctor confirms that there is a medical reason why they failed. The Senate bill would also take medical problems into account.

The goal of health reform, LeaMond says, should be to ensure that everyone—regardless of health status—has affordable health care coverage options. “Discounts for healthy behavior,” she adds, “should not become a backdoor way to cherry-pick enrollees and deny coverage to the sick.”

Susan Jaffe covers health and aging issues from Washington, D.C.

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