The Final ACA Wellness Provisions and the Reticence of the EEOC

The Final ACA Wellness Provisions and the Reticence of the EEOC

Paul Terry

Though the Department of Health and Human Services and Department of Labor issued final regulations concerning “Incentives for Nondiscriminatory Wellness Programs in Group Health Plans,”1 employers and health plans must still navigate unresolved inconsistencies between the Affordable Care Act (ACA) and the Americans with Disabilities Act (ADA).

The latest ACA rules indicate that if a plan uses a “health-contingent” incentive scheme, that is employees are to meet certain standards related to a health factor (e.g., losing weight or controlling blood pressure) in order to receive a reward in the form of reduced premiums or deductibles, the plan must satisfy several requirements including offering a “reasonable alternative standard” for those who believe that the standard is not accommodating their unique circumstances.

The EEOC has remained silent on whether they deem wellness programs to be voluntary, a key concern of an agency committed to ensuring that all employees enjoy equal benefits and privileges of employment such as is guaranteed under the American with Disabilities Act (ADA).

I have written elsewhere about where the original rules fell short in clarifying how the “reasonable alternative standards” would curtail health status discrimination.2 These final regulations, consistent with the ACA, should satisfy many who were concerned that the ACA wellness provisions, particularly the so-called “outcomes-based” incentives, could serve as subterfuge for insurance underwriting.

I am thrilled that the final regulation language concerning reasonable alternatives aligns closely with the progress-based approach to incentives that a colleague and I have published and have been recommending at health promotion conferences.3   We proposed that the common ground between an activity based and an outcomes based approach was an approach that takes the starting place of individuals into account and provides incentives to those who make reasonable progress toward goals that they have a voice in determining.   We suggested, as an example, that 5% of body weight loss would be more reasonable goal for someone very obese than would be a 30 BMI. The final ACA rules offered this same idea in their examples of reasonable alternative standards.

Overcoming ambivalence

EEOC commissioners fielded testimony last month concerning whether fidelity to the ADA was still possible, given the ACA wellness incentives.4 They heard balanced but mixed opinions and acknowledged that their silence on the “voluntariness standard” created confusion and consternation among sponsors of wellness programs. One commissioner said she was awaiting consensus in order to rule on whether the ACA and ADA would remain at odds.

As an experienced health coach, I know ambivalence when I see it. One thing often greater than the conflict people feel about not acting on something is the tension they feel when considering action.

Health coaches come up alongside participants and empathize with their struggle. We discuss how everyday behaviors that are causing them problems can be reconciled with what they say they value.

The EEOC, rooted in the Civil Rights Act of 1964, is an agency with nondiscrimination principles at its core. EEOC Commissioner Chai Feldblum offered testimony on May 8 that was, like that of the other commissioners, largely neutral. Nevertheless, Feldblum helped draft the ADA in 1990 and she once represented the Bazelon Mental Health Center, which was in front of the EEOC to testify against the current ACA wellness provisions. It should not be surprising that she noted that “the restrictions in the ADA play an important role in ensuring that examinations and inquiries connected to the wellness program do not recreate the problem that Congress was trying to prevent by including the prohibition on post-employment inquiries.”

When I am coaching someone who rates the importance of action as high but whose confidence in their ability to act is low, which is common, I ask, “What will it take to get these ratings closer together?” My hope is that EEOC commissioners turn their attention to better defining the most important safeguard already embedded in the ACA wellness provisions: incentives should not be used if not in the context of a “reasonably designed” wellness program. Though the ACA has offered sparse guidance on this, health promotion professionals are coming together to advance just such guidance about what constitutes a program that has a reasonable chance for improving health.5

Paul Terry, PhD is chief science officer at StayWell Health Management.

1. Department of Treasury, Incentives for Nondiscriminatory Wellness Programs in Group Health Plans,

2. Terry, P. “The Use of Incentives for Nondiscriminatory” Wellness Programs: Three Questions Answered and Three Questions Still Wanting.”

3. Terry, P., Anderson, D.,  “Finding Common Ground in the Use of Financial Incentives for Employee Health Management: A Call for a Progress-Based Approach.” American Journal of Health Promotion. Vol. 6, No.2, Sept. 2011.

4. Meeting of May 8, 2013- Wellness Programs Under Federal Equal Employment Opportunity Laws.

5. Joint Consensus Statement: Guidance for a Reasonably Designed, Employer-Sponsored Wellness Program Using Outcomes-Based Incentives Consensus Statement of the Health Enhancement Research Organization, American College of Occupational and Environmental Medicine, American Cancer Society and American Cancer Society Cancer Action Network, American Diabetes Association, and American Heart Association.

Paul Terry

The Department of Labor has issued new guidelines concerning the wellness provisions of the Affordable Care Act (ACA) that relate to the use of financial incentives, and the Office of Health Plan Standards and Compliance Assistance is seeking public comment. This document proposes “amendments to regulations, consistent with the Affordable Care Act, regarding nondiscriminatory wellness programs in group health coverage.” These regulations increase rewards for wellness participation or outcomes from 20 to 30% or up to 50% related to reducing tobacco use. (Federal register)

In the past several years, StayWell Health Management has published several studies concerning the use of financial incentives in wellness programs, so my colleagues, Drs. David Anderson, David Gregg, and I, felt obliged to offer some reactions to the proposed new language. All public comments will be posted at: By way of summary, we commended the department for its painstakingly earnest attempt to placate the detractors of the original proposal who believe that incentives could too readily become a subterfuge for insurance underwriting. Still, we believe their attempt to divide incentives into participation based or health contingent models may well shed more heat than light on the matter.

Proposed regulations

The proposed regulations regarding a health-contingent wellness program include a provision that appears to say members must be offered the total reward even when they have no medical condition that would make it unreasonably difficult to meet the health standard or medically inadvisable to attempt to do so, based solely on meeting a participation-based alternative standard. StayWell believes this effectively negates any substantive programmatic difference between a participation-based and health-contingent wellness program. Participation in a wellness program by an individual is, in effect, a default option for anyone who is not inclined to make an effort at even making reasonable progress toward the standard, much less achieve it. In effect, the health-contingent wellness program is fundamentally a participation-based program with a provision that allows an employer to waive the participation requirement for individuals who already meet the health standard.

Conversely, we believe a health-contingent wellness program should be clearly differentiated from an essentially participation-based approach by establishing a progress-based alternative standard for those who do not meet the health standard but are not granted a waiver because it would be unreasonably difficult to meet the health standard during the time allotted or medically inadvisable to attempt to do so. We believe the progress-based alternative standard should be individually tailored and supported by a health coach working under medical supervision to ensure that the progress-based goal aligns with health guidelines and does not pose increased risk to the individual.

Health Enhancement Research Organization

StayWell collaborated with the Health Enhancement Research Organization, often known as HERO, along with the American College of Occupational and Environmental Medicine; the American Cancer Society and the American Cancer Action Network; the American Diabetes Association, and the American Heart Association to bring together the views and concerns of the consumer (in this case the employee) and of the employer as represented by our member organizations. Through a collegial process, we added our support to developing a joint consensus statement on designing employer-sponsored wellness programs using outcomes-based incentives, which provides guidance to employers either considering or embarked on providing health-centric wellness programs regarding what should be considered in their plan.

StayWell concurs with much of what the HERO organization offered by way of response to the Department of Labor; that a worksite wellness program should be tailored to achieve improved health outcomes for individuals and populations.

Our industry experience to date indicates that in some organizations, an opportunity to receive a lower premium tied to a health factor standard, so long as it is not overly burdensome, may be an incentive to change behavior. In other organizations, however, some premium differential designs may have unintended consequences, such as deterring certain high-risk individuals or groups from engaging in programs. The dearth of evidence about the potential effect of these new ACA regulations makes a one-size-fits-all approach premature. Furthermore, because there is limited research in this area, any policy-setting approach is unsubstantiated at best. Accordingly, we will continue to urge transparency and data sharing in our professional network to identify and promulgate best practices.

Organizational culture

As importantly, our research has shown that incentives work best when bolstered by an organizational culture that makes healthy choices the easy choices for employees. Dan Buettner, a scholar who has researched longevity worldwide, summarized the vital role of culture nicely in an article in the New York Times Magazine titled, The Island Where People Forget to Die.

Buettner wrote: “For people to adopt a healthful lifestyle, I have become convinced, they need to live in an ecosystem, so to speak, that makes it possible. As soon as you take culture, belonging, purpose or religion out of the picture, the foundation for long healthy lives collapses. The power of such an environment lies in the mutually reinforcing relationships among lots of small nudges and default choices.”

Paul E. Terry, PhD, is CEO of StayWell Health Management

Paul Terry

John Muir, the famous naturalist, wrote: “When one tugs at a single thing in nature, he finds it attached to the rest of the world.”  It’s a concept that’s long overdue but now fully ensconced in the field of population health management.  Employee health management (EHM) practitioners, in particular, are coming to understand that the environments in which health promotion interventions occur are a primary determinant of the effectiveness of the interventions.  What’s more, many now fully acknowledge that the sustainability of healthy lifestyle improvements in diet, exercise, or tobacco use is fundamentally linked to our surroundings.  Indeed, in last week’s “HEROForum12”, a conference featuring EHM solutions, a third of the session titles included references to culture.  Moreover, no matter what the topic, the phrase “building a culture of health” was stated at nearly every session.

Given this inexorable trend in EHM, there are two recently published articles that deserve to be read side by side.  First, dig into Thomas Reinke’s article from Managed Care: “Employers, Others Not Sold on New Anti-Obesity Drugs.”  Reinke, a contributing editor, offers thoughtful contrasts between the weight loss and co-morbidity improvements that the two recently approved weight loss drugs have produced and the recommendations of the American Diabetes Association (ADA) and the U.S. Preventive Services Task Force (USPSTF). Bottom line: both science-driven, consensus-based bodies conclude that nature’s favored approach to weight loss works.  That’s 12–26 intervention sessions per year focused on diet and exercise, according to the USPSTF. The ADA recommends a 7 percent reduction in weight and 150 minutes of activity per week to manage diabetes. Weight loss drugs are not recommended by Mother Nature, the ADA, or the USPSTF.

But don’t stop with Reinke’s concrete exposition if you’re among those awaiting a pill to solve obesity.   In a letter this month in the New England Journal of Medicine, a Four Year Follow up after Two Year Dietary Interventions, Schwarzfuchs and colleagues report significant weight loss and “overall persistent and significant reductions from baseline” in LDL, triglycerides, and total cholesterol levels.   This is a follow up on a 2008 weight loss study that I’ve cited more often than any other research since.  I reference it first, because it offers an edifying contrast between three different diets; second, because it’s among very few weight loss studies with long-term monitoring (six years!) and impressive results to share, but, third and foremost, I cite Shai and colleagues because of the context in which the study occurs.  Though the authors underplay this attribute of the intervention, the diets occur at a worksite that is as close as a researcher can find to a captive audience: live-in workers at a power plant in Dimona, Israel.  The authors seem downright coy (usually forbidden in the turgid NEJM) when they conclude that their findings “may be difficult to generalize to other free-living populations.”

Still, even in free-living populations, weight loss has been shown to be possible and sustainable.  Weight loss research at StayWell, underscores how vital program completion is relative to sustainable weight loss.  In support of this, new approaches to employee engagement are proving effective in improving consumer activation for better use of health care resources and improved health outcomes.  Mother Nature continues to offer the best medicine and that includes a healthy dose of culture change.

Paul E. Terry, PhD, is CEO of StayWell Health Management

Paul Terry
I have long held that leaders can’t fake authenticity. When you’re passionate about your vision, it is felt by others whether they support you or not. It’s a realization that has been easy to come by because I’ve had so many great mentors.

One of my favorites has been Stu Hanson, a pulmonologist, a health care executive, and a prime mover in Minnesota’s historic national leadership role in creating smoke-free workplaces. Stu would often say, “I’m trying to work my way out of a job.” Putting aside his recent retirement and the fat-chance odds behind his conviction even when he was mid-career, to know Stu is to understand that he wasn’t kidding.  Stu’s mantra was the ancient proverb: “When you are through changing, you are through.” Perhaps it is a philosophy born out of the Herculean-sized stubbornness needed to take on the intractability of an addicted smoker. Or maybe being wired to push for change helps you cope with the blowback and disappointments that come from working to change something as unyielding as a culture.

As a student of leadership as well as one interested in the intersections between health care business and public policy, I also can’t help but follow Toby Cosgrove, a cardiologist who became Cleveland Clinic’s CEO.  I have assumed that his equanimity about the controversy that surrounds his ban on hiring tobacco smokers is grounded in the righteousness that only a cardiovascular surgeon can feel at his core after having performed 22,000 operations, at least half of which were lifestyle-induced. What else explains his more recent foray into smoking bans at universities? In a speech to the Harvard Business School Club of Cleveland, Cosgrove said: “The fact that American universities are not smoke-free appalls me.” Though being right is a powerful buffer, it doesn’t change the likelihood that he’ll be disparaged.

This month’s issue of Fortune Magazine casts Steward Health Care System’s CEO, Dr. Ralph de la Torre, as “Health care’s new maverick.” The article proffers some of today’s more pressing contradictions between business and policy making, though I don’t think the contradictions were intentional or, perhaps, even noticed by the author. (The article is “edited excerpts” of an interview, so perhaps de la Torre bridged the contradictions and the cogent connections are to be found on the cutting-room floor.)

The biggest head-scratcher relates to how, early in the interview, de la Torre, also a former cardiac surgeon, so persuasively builds the case for prevention but, by the end of the interview, argues that “one of the hard realities is that health care reform is not about public health.” On the one hand de la Torre notes “… we have to get young people involved. We have to get people who for all practical purposes really don’t need health insurance.” But later in the interview we learn “Health care reform is public finance… in a business plan you need an end picture of where we want to be in five to ten years.”

Another contradiction, at least for a career health educator, relates to why de la Torre is cast as a maverick. Indeed, it is exciting that so many other national leaders are on the wellness bandwagon. Or is it that, like Stu Hanson or Toby Cosgrove, he’s another health care practitioner/ executive leader who is actually serious about it? Perhaps his maverick-hood is his fidelity to being a responsible community steward, a role that shines through in his conviction that “we can’t pay for it all without putting a tax on the young,” or maybe it’s his belief that a maturing and consolidating health system is likely to become commoditized. Or does his maverick-ness come about because he has demonstrated he is effective at growing a business and also unabashedly holds that “we need to understand that we are responsible for each other, and we need to start acting that way.” If such makes de la Torre a maverick, then those advocating for the realization of the ACO concept are full-blown heretics.

On reflection, though, whether the interviewer intended it or not, such contradictions represent the inevitable tension great leaders readily balance between accountability for a business and responsibility for a mission such as Steward’s to “provide the highest quality care with compassion and respect.” If, as Fortune Magazine suggests, de la Torre is building a model for the future, it also suggests that principles that appear past due for some of us still represent a mystery or a threat to others. For example, as much as C. Everett Koop was a polarizing national figure who was vilified by many when he elevated HIV prevention into a nationwide education campaign, hindsight shows that the campaign was already past due. Many today hold Koop up as our most effective surgeon general, largely because it was clear only years later how often he needed to eschew popularity in service to his convictions. His authenticity is what made him great.

Leaders like Koop, Cosgrove, Hanson, and, hopefully, many others in queue like Ralph de la Torre, may need to carry the maverick mantel to get on with what, to them in the moment, and to others in retrospect, are policy no-brainers. Given the authenticity behind their decision-making process, I doubt they worry too much about their latest label. They’re too busy working themselves out of a job.

Paul E. Terry, PhD is CEO of StayWell Health Management

Paul Terry

As is always the case when I return from working abroad, it takes me longer, metaphorically speaking, to unpack my bags. I was ostensibly in Brazil to teach and consult about innovations in our population health management movement in America. But, as I expected, I was surely the greater beneficiary of teachings from leaders of the wellness movement in Sao Paulo, the business nexus for the world’s sixth largest economy.

Leaders of population health programs in Sao Paulo offer a self-assessment of being a decade or more behind the United States in the maturation of employee health benefits such as employee assistance programs (EAP), disease management, pharmacy benefits management (PBM), and wellness. I anticipated we would be discussing the “leapfrog” opportunities that come with later adoption of trends. For example, developing countries garnered advantage by skipping much of the costly infrastructure of cable by embracing  wireless communications.

So I came to Brazil thinking about what aspects of American health care innovation I would skip over if I had a chance to learn from the trials and errors of America’s health reforms. For example, I found it curious that the Brazilian health care system is likely the closest to America’s with respect to the proportion of employer versus government financing, yet the country had yet to mobilize anything resembling a buyers’ coalition or a business group focused on health or health policy. When I happened upon Brazil’s health commissioner, he told me his main message for employers was to become more proactive with the government in setting health policy. I said “Be careful what you ask for.” It was advice borne out of an American sensibility that public/private partnerships are fraught with ideological perturbation.

But then I met my host, Dr. Richardo De Marchi, owner of CPH Health, who changed my thinking about what’s possible in working across sectors. Our first visit was to Teto-Brasil, a Brazilian equivalent of Habitat for Humanity. A worthier non-governmental organization (NGO) for your corporation’s global philanthropic giving would be hard to find.

Richardo introduced me to Luiz Monteiro, a volunteer laborer building housing for the poorest of the poor in Sao Paulo. Luiz was a soft-spoken elder among mostly college-age volunteers, and his dirty clothes and unassuming manner signaled his intent to blend in. He was explaining the philosophy of working with the community — not being do-gooders doing stuff for them — as he was lifting wooden walls with the future owner at his side. I left with the impression that Luiz was an astute community organizer who happened to be good with a hammer.

The next day my host Dr. De Marchi brought me to meet the CEO of ePharma, Brazil’s fastest growing PBM. As I entered Dr. Luiz Monteiro’s grand executive office suite, I realized that Luiz was a community-spirited leader in his spare time, while he and Ricardo, both originally pediatric surgeons, were leading Brazil’s population health movement as part of their day jobs.

In the days that followed, I met many more leaders like them who shared a vision of bringing best practices in population health to employers and managed care companies throughout Brazil. I was surprised to learn how physician-dominated the leadership for this movement was, how others I heard from shared Richardo and Luiz’s passion for community, and how open they were to partnering with U.S.-based leaders if they were kindred spirits in the science of prevention, the promise of health promotion, and being responsive to the needs of the community.

Those who work abroad know that one of the early signs of culture shock is a tendency to romanticize both the differences and the foibles of another culture. Still, my short visit impressed me with the uniquely Brazilian health reforms these leaders were ushering forward.

U.S. leaders in the population health management industry are designing methods for better integration with the nascent patient-centered medical home movement (and the latest iteration of the same, represented by ACOs). These Brazilian physician leaders already have the advantage of both clinical and public health vantage points, especially so given their passion for community service. Brazil may well have a chance to hit the launch button on a truly integrated approach to population health before America has time to hit the redo button.

I’ve written elsewhere about the “Strength of Weak Ties.” That is, what would be possible if the patient-centered instincts of physicians were blended more intentionally with the population health acumen of public health experts. What would you do differently if you had a chance to redo America’s litany of efforts to improve health while reforming health care and tackling cost and quality?

Richardo, Luiz and the other visionary leaders I met in Brazil seemed to be showing the way forward. They are leading by example, though, perhaps leading from behind by extracting the best of population health management, patient-centered care, and corporate social responsibility, and combining them into Brazil’s version of a national health improvement campaign.

If we had to do it over again, would we still build these movements in silos? If America’s ACO pioneers want a glimpse of what better integration could look like, I’d suggest they visit Sao Paulo.

Paul Terry, PhD, is Chief Executive Officer of StayWell Health Management.

Paul Terry

I expect the next 10 years of policy debates, action, and inaction concerning how to curb our obesity epidemic to be an accelerated version of the last 30 years of public policy related to fighting tobacco.

This week’s HBO documentary, The Weight of the Nation, landed a flourish of solid blows against the wrong-headed notion that obesity is simply about lack of will power. The broadcast is based on the report “Accelerating Progress in Obesity Prevention: Solving the Weight of the Nation.” It’s the product of an extraordinary, even historic coming together of the Institute of Medicine, the Centers for Disease Control, and the National Institutes of Health. The report and the documentary make one point exceedingly clear: Obesity is a multifaceted problem that will require multifaceted solutions.

Like our decades-long campaigns against tobacco, these experts emphasize how confronting obesity will require that we confront the very nature of our obesogenic environment by rethinking our approach to food production and today’s overwhelming supply and unfettered access to unhealthy food choices, especially among our youth. Accelerating enactment of policies to reverse this trend is the right vision, but this is just round one. Today’s reactions to regulations concerning food are a shrill echo of those of tobacco users in the 1970s. (What do you mean I can’t smoke whenever and wherever I want?) To be sure, there will be those who point out the basic differences between a deadly addictive substance with no social value and food, which is a requirement of life. But, as Gary Taube, my favorite food science journalist, argues this month in Newsweek, even the high-powered experts behind The Weight of the Nation will fail if they keep pushing the same tired arguments.

In Taube’s article, “Why the Campaign to Stop America’s Obesity Crisis Keeps Failing,” he cuts to the chase. This fight isn’t about vilifying food and harping about calories in and calories out. It needs to be about the part of the nutrient, fat, and hormone interaction that’s not really controversial. Our hard-to-avoid and nearly impossible-to-resist access to sugars and refined grains is why countless of our children have Type II diabetes for the first time history and why they may be the first generation with a shorter life span than their parents. The solution is a policy no-brainer: limited access to junk food with easier access to healthier proteins, complex carbs, and rich, leafy green vegetables.

No one dedicated to public health will be claiming a victory anytime soon in the fight against tobacco, but some bruising lessons from what has been a glacial but winning strategy are clear. Foremost among them is to brace for the many rounds ahead. As much as health advocates are hoping to create the urgency to enable knock-out punches against the current supply chain, the economic and political forces against rapid change are simply too powerful. One needs to look no further than the First Lady’s “Let’s Move!” campaign to be reminded of the foibles and complexities of public/private partnerships for effecting change. The last year has witnessed public displays of industry cooperation and, at the same time, millions of dollars of lobbying against healthy changes to school lunches.

Another lesson from the tobacco battles is perhaps the hardest to absorb. The work of individual behavior change and social policy change must be concomitant.  When I read the chapter of the “Accelerating Progress in Obesity Prevention” report on Health Care and Work Environments, I found the recommendations to be tepid at best. For example, companies “should consider” the use of financial incentives for healthy choices and should “provide access to healthy foods and beverages.” Hello!?! I might have found this interesting advice in 1970, but progressive companies have been doing this for decades. They are now elevating their work in employee wellness to embrace the best of behavioral economics for positioning food choices, and are using game-theory-caliber incentive schemes to drive healthier choices. What’s more, the most effective programs are striking a shrewd balance between encouraging participation in offerings such as health coaching at the same time they work on building a culture of health that better enables sustainable behavior change.

Finding the right balance between individual and social responsibility is a must if this is to be a fair contest rather than a bloody rumble. In a prior post I wrote about how my IT colleagues were making access to “Greasy, Globby Doughnuts” way too easy. George, our chief technology officer, good naturedly refers to that article as “Doughnut-gate” here at StayWell.

Regulating food can come across as insolent with respect to some of our core values. This is not only a debate about liberty versus responsibility, perhaps our strongest-held values; I would argue that the tension runs even deeper than that. Food policies touch on primal rituals of social connectivity and our basic needs for comfort and security. Before I submitted the “Greasy Donuts” piece I asked for a review by Rob, the person in IT who had brought the doughnuts in that day. He said he understood the points in the article and also wrote me back a very thought-provoking essay of his own. While he acknowledged that he had “absolutely no anguish” over refraining from bringing in more doughnuts, he also wrote about the incontrovertible relationship between the demands of the workplace and the need for colleagues to come together in mutual support over food and drink, especially when under stress. Rob’s smartly grounded feedback is why I ended my Doughnut-gate essay with the question, “What workplace policy maker can wield endless demands on one hand and reprove a simple pleasure like comfort food on the other?”

So, while my initial reaction to the The Weight of the Nation is that it’s too tepid for my tastes, perhaps the authors have some wisdom or patience I’ve yet to find in my own approach to fighting for health. Still, if we lose in early rounds of the fight, we can always find renewed energy from knowing we’re on the righteous side of the ring.

A terrific advantage I personally enjoy as I consider strategy for the many rounds in the battle ahead is that one of the leading minds in the population health management movement occupies the office next door to me. With respect to the IOM recommendations that policy makers should consider incentives, Dr. David Anderson, chief health officer at StayWell, recently wrote that “the horse is out of the barn” on the use of workplace incentives for health.  In David’s essay on “Health Care Reform 2012: What Congress Giveth… the Supreme Court Taketh Away?” he argues that there are enough systemic differences between the ACO and the HMO models that the market is now “intrigued by the prospect of a delivery system with incentives truly aligned to improve population health.”

David and I are heading out after work to debate George and Rob about The Weight of the Nation. Though our food choices may vary, our beverages of choice are predictably similar and are sure to keep the conversation lively.

Paul E. Terry, PhD, is CEO of StayWell Health Management.

Paul Terry

I love my colleagues in Information Technology. I also love greasy doughnuts. Why then, do I not love it when I.T. people bring in a big crate of greasy doughnuts to reward each other for their hard work? They only do this occasionally. Still, my latest way to chide them about it was to put a recent section of the Wall Street Journal right alongside their gloriously globby booty. The full-page feature, complete with pop-out quotes of long-suffering dieters feeling sabotaged at work, was titled: “Colleagues Who Can Make You Fat.” The article notes that fully 30 percent of dieters cited worksite colleagues as the culprits in foiling their dieting plans.

As everyone knows, annoying one’s colleagues in I.T. is something you do at your peril. In the military, you play nice with the barber and the cooks. In the private sector, you pander to I.T. lest your PC mysteriously crash. So let me reiterate: I adore my colleagues in I.T. One plays in a rock band and can reassemble his Rubik’s cube in world record time, another went to a Florida boot camp to shore up his baseball umpiring skills, another can sleuth out programmers’ bugs like she’s Agatha Christie, and yet another could win Dancing With the Stars except, well, he’s not a celebrity … yet! So they’re a brainy, fun-loving, interesting, accomplished lot who I love to death. Far be it for me to tell them what to do, except, for example, if their bad habits were expensed to the company. I’ve checked; their globby treats most assuredly are not.

So, this is an appeal to their problem-solving prowess. If A is my attraction to doughnuts and B is my belief in freedom, why doesn’t A + B result in being cool with bringing in doughnuts? With their training in algebra and Boolean logic, they surely have a better chance than I at solving for why the “commutativity” of the elements, that is, the order of the numbers, does not in this case affect the result.

But perhaps there’s more to this equation than A and B. Here are just a few properties to bring to the calculus:

  • This isn’t just about the fact that we’re a wellness company. Even some of our most staunch fitness- nut colleagues (and, yes, some are from IT) were conflicted when we circulated an article about local schools cutting back on sugary treats in lunchrooms. “Schools as birthday- cake- free zones” describes how school districts nationwide are changing food policies to address obesity and food allergy trends.
  •  I really do get that there is no end to the slippery slope of placing sanctions on unhealthy choices. The first of many national health conferences I’ve organized and hosted was called: “Private Lives … Public Policies — Incentive Systems and Risk-Rated Health Insurance.” My first keynote speaker was Howard Leichter, author of “Free to Be Foolish,” whom I considered a brilliant spokesman against “outcomes based” incentive schemes. At the time, 1991, it was called “risk rating,” but the principle hasn’t changed: How do we fairly balance individual versus social responsibility for health? Leichter and I agree that the pendulum too often swings toward blaming the victim.
  • To wit, if “Colleagues
Paul Terry

Serendipity landed me across the table from a couple of enormously brainy people the other day. We sat having drinks overlooking the hubbub of New York’s Grand Central station. One was a seasoned corporate attorney, the other a superbly incisive CEO. I mentioned how the younger crowd was in a hurry to get home from their marginally satisfying work worlds to engage in their vastly more challenging virtual worlds. I explained that I’m midway through a Yale on-line course in game theory, and how remarkable I was finding the overlaps between behavioral economics, social psychology, and game theory as each informs what we know about motivating people and supporting their successful health behavior changes.

In my experience, brainy people are defined partly by how much they know, but more often by how inquisitive they remain. True to form, this pair prodded me into sharing more about my enthusiasm for game theory, and how it relates to StayWell’s work in population health management. I explained how tenets of personal mastery are a vital part of what we consider when we develop health education software, and how increased use of financial incentives and biometric health screening has been trending strongly in population health programs, enabled by section 2705 of the Affordable Care Act. Behavioral economics theories underscore both the opportunities and threats affecting those of us designing ever-more-powerful ways of reinforcing progress toward better biometrics or sanctioning lack of same. (StayWell’s incentives position is something I’ve written about here previously.)

What game developers, health educators, and behavioral economists share is balancing the art and science of rewards for goal attainment (keeping it challenging but attainable) with freedom to choose your path to success (what Richard Thaler in his book Nudge termed “paternalistic libertarianism”) and feedback mechanisms that keep you coming back for more. What the gamers seem to be doing better than the others is binding these motivational principles to the power of social networks.

On this last point, Jane McGonigal, author  of Reality is Broken, makes a compelling case for harnessing the extraordinary power of gaming communities to improve the world. And it was on this, what became my final point, that I manifestly lost the interest of my Grand Central students. In her New York Times best-selling book on gaming, McGonigal chronicles countless examples of the tireless, albeit disturbingly compulsive, commitment that millions of gamers bring every day to building virtual worlds and competing therein for fame, fortune, and meaning in their lives. The very notion that gamers were inspired to dedicate untold unpaid hours to be “part of something big” but not of our familiar world was not only antithetical to my brainy buddies, but I could also tell they found it unsavory. I’m good at holding up my end of a conversation but, blessedly, I’m better at noticing when someone checks out on her end.

We changed the conversation to the prophylactic value of nature and the emerging realities behind nature deficit disorder. As parents, we all agreed that Last Child in the Woods (Richard Louv) was a must read. We enjoined the oft-held refrain of parents of my generation that kids need to discover the virtue of disorganized creative play, as it surely backdrops our own rampant success at building a peaceful and verdant world. The subtext of this abrupt conversation change was biting and clear: Time spent experiencing joy in virtual worlds is bad. Alternatively and comparatively, time spent in the “real world” is good.

Those of us with smart phones now reach for our hip, on average, 150 times per day. Were it not for the rapid retreat of my buddies from the premise that principles of gaming hold powerful promise for the future of health and health care, I might have shared more examples of how we are connecting this inexorable new habit to health improvement outcomes. This month’s issue of the The Nation’s Health includes an interesting article on the effectiveness of gaming in increasing physical activity. As one who is at an expert level as a Rockband drummer on many songs from my Beatles play list, and as a host of Dance Revolution parties using the Kinect body motion sensor, I can attest to the effects of gaming on my aerobic capacity.

Had we not changed the subject, knowing the commitment to community service of my Grand Central friends, I would have detailed the amazing story of the Sony Co., which mobilized players on its PlayStation 3 consoles to become the largest computing community ever to contribute to Stanford University’s “Folding@Home” in support of its protein folding mission. It’s a project where gamers run software that helps scientists better understand diseases like cancer and Alzheimer’s.

And with over 250,000 health apps and counting, the fun and, yes, meaningful work in communities online is just getting started.

Paul E. Terry, PhD, is CEO of StayWell Health Management.

Paul Terry

Having just finished reading Walter Isaacson’s brilliant rendition of Steve Jobs’s life and career, I’ve considered whether there are health care marketplace lessons to be garnered from his central casting in the extraordinary tech wars for primacy over the past 25 years. I’d commend this biography to anyone who loves great writing and insightful analysis of the human condition, along with the foibles of growing a business. But first, here are a few reasons for and against reading Steve Jobs’s biography if you’re hesitant to take on a lengthy tome. If you’re drawn to business books that profile great leadership and exemplary business practices, Isaacson’s research will leave you cold and spent.

Jobs was a textbook narcissist and his vaunted “reality distortion field” will leave you puzzling over why anyone tolerated his oddities and crudeness. But if you are interested in how creative genius, serendipitous convergence of industrious minds, and shrewd, albeit fanatical, business decisions can shape the direction of an industry (and, yes, change the world), this is the tale not to miss. As for Isaacson’s clever writing, let me know if you laughed as hard as I did when you reach the part about Jobs’s vendor partner proudly printing T-shirts with an acronym not to be described in this more civilized blog post.

Now on to whether Jobs would appreciate the merits of regulations advancing Accountable Care Organizations (ACOs). I think not. Jobs had individual market instincts and would likely scoff at the idea that innovation can be promulgated by thousands of pages of what “the ACO shall provide.” Still, if the strongest case for ACOs rests with the idea that this time we intend to execute on a shared vision of inexorably integrated primary care, I think Jobs would want to learn more. Jobs had a career-long vision and constancy of purpose grounded in his belief that the best user experience comes from a closed system, and his conviction that controlling the quality of both hardware and software was vital to offering consumers what they needed. What’s more, he felt it was the only way for him to invent what consumers didn’t even know they wanted. Such was his tireless battle against Bill Gates, Google, and all other comers who believed open architecture would drive greater choice, better prices, and, in the end, more innovation for the consumer.

So far, ACOs are closed systems. To wit, the majority of the “pioneers” are simply those that already own the integrated medical records, call centers, and IT-abetted care coordination infrastructure needed to pursue the economic potential of an ACO delivery model. But I can just hear Jobs’s reaction: “It’s not the shared savings, stupid.” Actually, he’d have used much more colorful adjectives. Jobs defied business maxims assuming innovation and profit are a virtuous upward spiral. Indeed, he routinely eschewed profits and blew apart operational efforts to lower development costs in deference to his puritanical devotion to sweating every detail related to quality. If you told Jobs about VA Health Care as an example of how health information technology can reduce errors, improve quality, and reduce costs, he’d be fascinated. But if you then told him that most of health care is provided by small groups of medical providers and that very few of them believe they are equipped to accommodate ACO requirements, I think he’d react with conversation-ending expletives. Remember the famous Macintosh commercial proclaiming “1984 won’t be like 1984”? Ironically, as much as Jobs would likely favor the cottage industry innovators over the “big brother” version of an integrated platform, he and his wife, in effect, built their own ACO. That one of the richest men in the world was experiencing such uncoordinated care that his family decided to step in to assemble and coordinate their caregivers shows just how far we need to go before the integration tenets of the ACO movement can be realized.

Paul E. Terry, PhD, is CEO of StayWell Health Management

Paul Terry

The Affordable Care Act codified the worksite wellness exemption to the federal medical underwriting provisions in the group health plan market. This means companies are allowed to use an “outcomes-based” incentive model that provides financial rewards for those who satisfy a prescribed health standard such as a BMI of less than 30 or who meet a “reasonable alternative standard” or obtain a waiver from their physician. What some see as “rewards” others view as penalties or surcharges and, given the absence of evidence to confirm the role of such incentives in actually improving population health, the new provisions have unleashed a debate about the ethics and putative effectiveness of the new provisions.

Many view the current and more common use of participation-based incentives as too easily exploited and insufficient to break intractable health habits. Others see the emerging trend toward use of outcomes-based incentives as draconian and a subterfuge for insurance cost shifting. I think the wisdom is in the middle and, with my colleague David Anderson, have argued that we need move beyond these opposing views by proposing an alternative “progress-based” incentive model that we believe can increase employee accountability and engagement while preserving fairness and equity in the use of incentives: “Finding common ground in the use of financial incentives” (

In contrast to the commentaries from the American Heart Association and the American Cancer Society in the above link that argue that incentives should be confined to participation only, we believe that a “progress-based” incentive strategy will provide a participant-centered, risk-adjusted and safer approach to achieving population health goals.

In a “progress-based” model, the attainment of a reasonable individually-tailored health goal, such as losing 10 percent of body weight, offers participants who fail to satisfy the health standard with an opportunity to earn incentives regardless of how far from the recommended health standard they begin their journey. Confining rewards to only those who hit the outcome target risks alienating those at highest risk who have the furthest to go and generate the highest costs to the organization. A “progress-based” approach, on the other hand, has the potential to engage everyone in setting achievable, measurable targets that yield health improvements.

What are your thoughts on the best use of financial incentives? The new provisions of the Affordable Care Act seem to signal a conviction that employees’ accountability for their health should be bolstered. Has Congress inadvertently put employers in the role of insurance cost shifting?

Paul E. Terry, Ph.D., CEO, StayWell Health Management

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