Corporate Wellness Incentives

The logic behind corporate health promotion programs is simple and indisputable: workers who are in better health spend less on healthcare. “The dollar savings derived from health promotion can be higher than most organizations realize,” says Tom Sawyer, president and CEO of Health Advancement Services, a consulting organization in Tempe, Ariz. One of Sawyer’s clients, the city of Glendale, Ariz., has had a health promotion program for nine years. The city estimates it gets $10 back for every dollar spent on the program.

It’s no surprise, then, that the number of organizations starting up health promotion programs of one kind or another is growing. Or that these organizations are exploring new ways to improve results by increasing worker participation. “Clearly, people are watching this kind of initiative with great interest,” says Margaret Beckham, information manager at the National Resource Center on Worksite Health Promotion in Washington, D.C.

The more workers who take part in a health promotion program, the more potential savings. That’s why organizations have tried a variety of methods to increase worker participation, some of which have proven more effective than others. Mandatory worker participation, for example, is not recommended. When a railroad organization tried to require its track maintenance workers to do warm-up exercises, the workers threatened to strike unless the program was halted immediately.

Incentives: Positive Reinforcement, Not Punishment

Systems that use “disincentives” to penalize those deemed unhealthy also are questioned by many. “Disincentives can create worker relations problems, leading to charges of unfair discrimination or accusations of management interference in private matters,” says Lynn Gilfillan, a health promotion coordinator at Coors Brewing Co. of Golden, Colo. “It’s much better to create incentives that put workers in a position to gain something.”

Since 1984, Coors has run a health assessment program, mailing out surveys with over 100 questions for workers and spouses. Along with routine health and safety matters like smoking and seatbelt use, the survey asks about such personal matters as whether, in the last year, the worker has had sexual difficulties or a “stressful Christmas.” Survey results allow Coors to appraise the health status and lifestyle of each worker and spouse, and to direct him or her to appropriate programs.

Filling out the appraisal form is voluntary and the results are confidential. “We felt workers would resent a health promotion program that mandates participation,” says Gilfillan. “From the beginning, we wanted the appraisal to have a low profile, so it wouldn’t be a case of management meddling in personal affairs.” And there is an incentive to take part: If the worker’s appraisal shows that his “health age” is the same or less than his chronological age, Coors will increase its medical insurance contribution from 85 to 90%.

Health Promotion Goals

“A well-designed incentive program can make significant contributions to health promotion success,” says Sandra J. Wendel, editor of Worksite Health Promotion Works, the newsletter of the Health Promotion Councils of America (WELCOA) in Omaha, Neb. “Frequently, the presence of an incentive will increase participation, increase adherence to a specific behavior, and increase follow-through by 10 to 20%.”

Companies with health promotion programs offer workers incentives to reach a number of different goals. The most frequent goal, by far, is to have workers quit smoking, but other common goals include better health via aerobics, biking, jogging, walking, or swimming; and losing weight.

Some organizations go beyond even these activities, usually basing program goals on the specific health risks of their workforce. A organization with a lot of men over 40, for instance, might reward proper diet and exercise; one with a lot of women under 40, obtaining pre-natal care during pregnancy; and one whose workers do a lot of driving on the job, wearing their seat belts.

Health Days

The incentives are even more various. Companies are using all manner of things to reward workers who take part in health promotion programs–fee rebates for completing a weight-loss or smoking-cessation classes; a day off after a year of no smoking; and eligibility for a raffle offering a weekend getawat after one has reachsd weight loss goals.

One of the most effective incentives of all may also be one of the simplest: “I think the most powerful incentive to participation in health promotion programs is to offer the program during work hours,” says Roger Reed, vice president of product development at Keycare Health Resources in Indianapolis. “That really increases participation; during work hours, you can even reach the unmotivated.”

But, according to Healthy, Wealthy & Wise, the managers’ guide published by WELCOA, time off from work is just the beginning; as a reward for reaching a fitness goal, organizations are also awarding T-shirts, gym bags, sun visors, pens, thermometers, relaxation tapes, water jugs, beverage mugs, videos, books, blood pressure monitors, magazine subscriptions, jackets, sports clothing, and gift certificates to stores and restaurants. (”People will do anything for a T-shirt,” says the WELCOA guide. “And they’ll do even more for paid days off, cash, and praise in the organization newsletter.”)

Some consultants say that if workers seem a health-oriented group to begin with, incentives may not be appropriate in every case. “The first year we put a health promotion program into place, we can have very high participation rates–three of our new clients this year came in at 85%–without any kind of incentives,” says Tom Sawyer. “I usually recommend letting the program get running, and if utilization drops, then use incentives.”

In general, the most common kind of incentive program is one in which workers get points for exercise activities they pursue outside of work, aiming towards some milestone at which they get a prize. At K Products, a manufacturer of advertising specialty items in Orange City, Iowa, with 1,400 workers, 460 people take partd in the “Health Promotion Team” in its first year, 1989. “We made it simple to encourage people to join, and we expanded the eligible activities this year,” says Bonnie Huygen, K Product’s manager of personnel services.

Employees get 10 points for each half hour spent in any of 18 different activities–like walking, running, biking, tennis, weight lifting, rowing, jump roping, and wallyball. At the 600-point plateau, they get a T-shirt; at 1,200 points, they’re eligible for a drawing for a Walkman; at 1,800 points, they get athletic shorts; at 2,400, a sweater; and at 2,800, the final plateau, they’re entered in a drawing for a clock/radio/phone. Huygen says that while the program probably doesn’t save the organization all that much in medical costs, it does contribute greatly to workforce morale. “The program shows a positive commitment,” she says, “by the employer to the workforce.”

Health-bates

John Alden Life Insurance Company in Miami, Fla., runs an expanded version of this kind of prize-offering program. To chart their progress through the organization’s “Health Works” program, workers are issued a “passport”; points are awarded for participation in a list of organization-sponsored events, most of which are held after work. For joining the organization-organized Weight Watchers group, for instance, an worker gets 25 points; for completing a running or walking event, he gets 20. Points are also garnered for aerobics classes, participating in a team sport, attending a presentation on a health subject, serving as a health promotion committee volunteer, bringing your family or your boss to a presentation, or offering blood. Prizes are awarded through the S&H Green Stamps catalogue, at four value levels ($25, $50, $75 and $100). The worker who accumulates the most points over the course of a year wins an all-expenses-paid vacation.

Foldcraft, a restaurant furniture manufacturer in Kenyon, Minn., offers several types of incentives for participation in its extensive health promotion program. These include prizes such as clothing and gift certificates–and casg bonuses, along with time off from work. Although the organization has only 300 workers, Foldcraft offers 11 different ways for them to take part in health promotion.

Prizes are offered for participation in a pre-work warm-up program, in “health promotion walks” of predetermined length, in team weight loss competitions, and in weekly health promotion meetings which offer speakers and videos on various topics. For taking a voluntary drug test, workers get an extra half vacation day.

Monetary awards in the form of increased employer payments for medical insurance are offered for participation in the organization’s health assessment screening. Just taking the screening (for cholesterol, blook pressure, flexibility, heart rate, body fat, and oxygen uptake) saves the worker $20 per month on medical insurance. Assessment results are then rated, with medical insurance rebates awarded on the basis of scores; amounts range from $60 to $480 a year. Two hundred and fifty people take partd in the program last year.

About 15 people a month also get cash bonuses for participating in Foldcraft’s “health practice program” for aerobic activity pursued outside of work. Employees accumulate points for activities practiced at a certain level (walking two miles within 30 minutes, for instance, gives you five points), and anyone who has 100 points or more at the end of the month gets $15 in cash. At the end of the year, the six top scorers get $150.

At Howard County Community Hospital in Kokomo, Inc., eligible workers can save up to $20 a month on their medical insurance payments if they meet certain health guidelines: blood pressure meeting the American Hospital Association standard (with or without medication); not using tobacco products; and weight within five% of ideal, according to the 1983 Metropolitan Life tables. Last year, 405 workers take partd in the assessment.

In 1989, U-Haul Corp. of Phoenix, Arizona, paid $18.6 million for medical care for workers and dependents. “A large portion of that,” says spokesman Allen Weinstein, “covered illnesses attributed to the use of tobacco and to weight problems.”

To encourage workers to quit smoking and lose weight, U-Haul is offering to waive its medical insurance copayments of $5 each biweekly pay period (for a single worker; $10 for one with a covered spouse) to those who don’t use tobacco in any form and meet weight guidelines.

“In general, financial incentives are still quite rare,” says David Gobble, associate director of the Institute for Health Promotion at Ball State University in Muncie, Ind. Of such incentives, cash bonuses are extremely rare and rebates on medical insurance the most common.

Healthchecks, not checks

Although rebates seem logical to many, it’s not always easy to put such a program into effect. “I think that tying health promotion participation to lower insurance costs would have a positive effect on our program,” says a health promotion manager at an oil organization. “I’ve suggested it to management several times since 1983, but they always have a problem with how you can prove that people aren’t smoking, or that they are exercising at home?”

“Some organizations want to prove or document everything, while others tend to take peoples’ words,” says Ed Stasica, cost-containment and health promotion consultant in Mount Prospect, Ill. “It really depends on the overall philosophy of the organization.” At present, more organizations than not seem to be relying on an honor system, with the worker simply filling out and signing a form to “prove” that he’s done the incentivized activity. Although most organizations do not do specific tests to see if the worker is telling the truth–like testing the blook of an alleged non-smoker for nicotine–it’s clear that, in the case of smoking and exercise, outright lying would almost certainly be visible in the overall general assessments periodically performed.

Others, however, choose to sidestep the verification issue altogether. In the 50 programs it designed and administers, Health Advancement Services, which specializes in health risk assessment strategies, always offers incentives (frequently partial waiver of deductibles) strictly for participation in the health promotion program–not for performance. “One of our organizations is considering offering non-smokers a break on their medical insurance premium,” says CEO Sawyer. “But I’m recommending against it. How do you know he’s not smoking? Maybe he’s smoking on the weekend. If you’re trying to find out, then you’re a policeman.”

The Health Adavancement program typically consists of completing a questionnaire, going through a screening plus visiting an on-site nurse for an evaluation. That’s what the worker is rewarded for; after that, it’s up to that worker to take further action.

And the honor system works, Sawyer says, positive changes are visible in test results. At one site, for instance, 64% of workers tested had a cholesterol count of over 200 in 1989; in 1990 only 32% had those results.

Health Promotion: Can’t See the Forest for the Trees

In incentivized health promotion programs are such a great way to control healthcare costs, why don’t more organizations have them?” Most organizations have a short-sighted approach to cutting costs,” says Roger Reed of Keycare Health Resources. “They wan to do something that cuts costs today, not tomorrow.” Also, health promotion is a “soft” idea that doesn’t always sell well within the corporation. “I never use the term health promotion; it’s a system that doesn’t make sense to bean counters and executives,” says Bob Gorski a benefits directors at Whitman Corp., a Chicago-based Fortune 100 organization. He prefers “health risk management.” to describe his programs.

All agree, however, that interest in these types of programs is growing. “As medical insurance costs rise, the workers themselves will be demanding this,” says Ed Stasica.” I can envision an worker looking across the office and thinking ‘This guy is running up the healthcare costs. Is that fair?’ In the future, medical insurance will become like car insurance–if you have accidents, you pay more.”