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In an effort to bring down health-care costs, employers are increasingly turning to workplace wellness programs that reward employees who engage in healthy behaviors — or, alternatively, penalize those who don’t.
Some wellness programs use carrots, decreasing a worker’s health insurance premiums if they enroll in a smoking cessation program or start hitting the gym. Some use sticks, setting higher deductibles or premiums for those who can’t meet a certain body-mass index or do not quit smoking. Both approaches are on the rise: Benefits consulting firm Towers Watson’s annual employer survey finds an increase in workplace wellness programs over the past year, with even more implementation plans in the works for 2013.
The health reform law is likely playing a role here: It lets employers vary premiums based on wellness program participation by as much as 30 percent — 10 percent more than what federal regulation currently allows.
There’s a lot to like about wellness programs, in that they align the economic incentives of the employer and the employee: Both have a financial stake in engaging in more healthful behaviors that could ultimately drive down the cost of health care. Some employers have already seen success with such programs. As Ezra reported a few months ago, the Cleveland Clinic was able to slow the growth of its insurance costs for its employees with such programs.
But there’s also some concern, from consumer advocates, that these programs could become a way to discriminate against sicker employees who can’t meet given metrics. Here’s more from BusinessWeek’s John Tozzi on new Georgetown University research:
The Georgetown authors cite one wellness program that wields a stick. It suggests employers raise deductibles from, say, $500 to $2,500. Workers can then “earn credits” worth $500 each to lower the deductible if they meet certain targets for four factors: body-mass index, blood pressure, cholesterol, and tobacco use. A nonsmoking, normal-weight employee with healthy cholesterol and blood pressure winds up back at the $500 deductible. “If you’re on the wrong end of any of those four tests, your costs have gone up,” says Volk.
The Georgetown authors say they want to make sure wellness incentives actually make people healthier and don’t just shift costs onto sick workers. “There’s really strong research showing that the higher the deductible, the greater the barrier to accessing care,” she says. “Someone may not be getting basic primary care or necessary care to treat a chronic condition.”
These researchers worry that wellness programs with penalties wouldn’t necessarily align incentives for employers and employees. Instead, for less healthy employees, they could promote the exact behavior that employers don’t want to see: sick workers forgoing primary care because of cost.