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Do Healthcare Incentives Really Work?

Guest Author | Hailey Andersen

Do Healthcare Incentives Really Work?

In 2009, Safeway CEO Steve Burd wrote a piece for the Wall Street Journal touting the results of his company’s healthcare incentive program.  The program, which focused on tobacco use, weight, blood pressure, and cholesterol, rewarded healthy employees by charging them less for their insurance.  Burd’s efforts received so much support that they inspired the Safeway Amendment.  Now a part of the Obama administration’s healthcare plan, the Safeway Amendment allows companies to reimburse employees between 20% and 50% of their insurance premiums if they participate in the company’s wellness program.  Efforts like Burd’s and the Safeway Amendment are sparking a conversation and giving American workers an opportunity to discuss the merits of incentivized workplace wellness.

Healthier Choices

Perhaps most importantly, offering healthcare incentives seems to elicit healthier behaviors from program participants.  A couple of years ago, the New York Times wrote about a program that paid people to take their own medicine.  They told the story of a young woman with lupus who finally began taking her medicine consistently when she was rewarded for doing so.  Similarly, Wal-Mart employees who quit smoking are often rewarded with discounted health insurance.  These discounts have led to many employees giving up the unhealthy habit.

Cost-Effective

Not only do healthcare incentives benefit the employees, but they also work to the advantage of the company.  Burd shared that Safeway had a choice: either reward an employee $300 to stop smoking or pay four times as much to insure him and his unhealthy choice.  The decision was an obvious one. Incentive programs work well because they benefit everyone involved.
Do Healthcare Incentives Really Work?
Mandated Incentives

Up to now, it seems that incentives are largely optional.  Companies can choose whether or not to offer them and employees can decide whether or not to participate.  How the Safeway Amendment will influence the optional nature of these incentives is to be determined.  So far, though, it doesn’t seem like workplace wellness incentives have to be mandatory.  Once the numbers are presented to a company and its employees, they often choose to participate.

A 2012 study on the health of America found that we’re living longer, but we’re sicker than ever before.  It seems that most older Americans rely on medicines and long-term health care to get them through each day.  Perhaps the increasing popularity of incentivized workplace wellness can help turn the trend.  Encourage people to get healthy now, so that we can live longer and healthier lives in the future.

Hailey Andersen enjoys exploring the latest trends and regularly writes both for personal and professional purposes. Follow her on Twitter at: @HaileyWrites.

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