At the start of each year, millions of Americans make resolutions to lose weight, stop smoking or live a healthier lifestyle. As January comes and goes, these resolutions fade and old habits prevail. National health care costs have risen to well over $1 trillion a year, due in part to Americans' unhealthy habits. According to a recent study by Purdue University, 74 percent of American health care costs are due to lifestyle-related behaviors and are, therefore, preventable. In an effort to reduce long-term costs, many organizations are searching for ways to inspire employees to lead healthier lifestyles, and wellness programs can be a way to do just that.
Often perceived as a cure-all for rising costs, wellness programs have grown in popularity and are becoming commonplace in many businesses. A recent report issued by PricewaterhouseCoopers found that wellness programs can result in a three-to-one return on investment. While these programs are a valuable tool, the key to ensuring success and ROI is the strategy behind the nuts and bolts of a wellness plan.
The ultimate goal of any wellness program is to lower the cost of employee benefits with sustained improvements in workers' health. Behavior change is the key factor in addressing rising costs, as the vast majority of American health care costs are a result of lifestyle decisions.
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It is undeniable that conditions developed or worsened by unhealthy habits contribute to increased health care costs. Employers have a responsibility to their employees, and their bottom line, to address these habits and encourage a healthier lifestyle. In order to drive wellness program participation to levels that translate into results, it is essential that incentives and disincentives be incorporated to encourage healthy behavior among employees and reduce health care costs.
It is important to note that employers must be aware of HIPAA regulations as they relate to what incentives can and cannot be offered to workers. Incentives may be offered for simple activities such as completing health risk assessments or participation in disease management programs and may include the following:
- Reduced medical premiums
- Cash payments or HRA credits
- Subsidized gym programs
- Rebate of program cost
- Gift cards and merchandise discounts
- Days off
Likewise, disincentives may also be used to encourage employees to adopt healthier lifestyles and can include the following:
- Increase in health benefits premium
- Paycheck reductions
As more wellness programs emerge, the question becomes which approach is most effective at inspiring behavior change – the carrot or the stick? Rather than molding an entire program to one extreme, understanding a company's demographics is the best way to ensure ROI on a wellness program.
Incentives should not only increase employee participation in wellness programs, but should help to ensure participation by the people who need the most help. The primary target of a wellness program should be employees who are not in the healthiest segment of the company. By encouraging positive behavior change within this group, employers avoid a wealth of potential costs due to future health problems and can expect a higher ROI from their wellness program.
Just as the rewards and punishments offered through a wellness program are adjusted based on the population's demographics, the balance between incentives and disincentives also must be adjusted accordingly. One size does not fit all when developing a wellness plan and customization is key.
Rewarding a job well done is proven to encourage positive behaviors and motivate behavior change, as well as punishing unfavorable behaviors. Much of how employers approach this balance between reward and punishment is decided by the type of behaviors they are trying to address. The more acute the condition or risk factors, typically the more resistant the participant can be.
Successful wellness programs are grounded in sound strategy and a comprehensive understanding of the group they are meant to address. These programs must also offer both carrots and sticks to employees, all while evaluating success and adjusting accordingly.
Dr. Larry Luter is chief medical officer for Meritain Heath. For more information on Meritain Health, visit www.meritain.com.
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