Large employers agree on rewarding healthy behavior

Large employers plan to continue offering health coverage to workers, according to the 18th annual Towers Watson/National Business Group on Health Employer Survey, but the struggle to minimize costs continues. This year, the survey looks at how this challenge is taken up by employers that, of the 583 respondents, “are in the top tier of respondents whose costs have increased over four years at a much lower rate than the … median.”

Companies that have controlled health costs well now plan to …
Examine health care benefits, employee subsidies, and out-of-pocket costs in a “total rewards” framework 39%
Manage company subsidy as part of a “total rewards” budget rather than a separate health plan budget 30%
Increase employee contributions in tiers, with dependent coverage at higher rate than single coverage 24%
Structure employee contributions based on employees taking specific actions 23%
Adopt new payment methodologies that hold providers accountable for the cost of episodes of care, replacing fee for service 22%
Offer telemedicine for professional consultations 22%
Fund account-based health plans in accord with wellness or health management behavior 22%
Offer specialty provider networks 20%
Track outcomes quantitatively from all vendors 20%
Contract directly with physicians, hospitals, and/or ACOs 18%
Provide access to a private or corporate health exchange 18%

“The actions of our best performers may well provide a playbook that others can follow to achieve their goals,” the study says. “This is especially true for those whose strategies and tactics have led to less-than-desirable financial and health results.”

One thing the most successful companies are doing is “integrating their contribution strategy with their health management and wellness activities. Many more companies are tying their wellness incentive strategy to their [account-based health plan] contributions.”

More employers are not just taking the workers’ word for it regarding whether they’re making necessary lifestyle adjustments.

“More recently, companies have been expanding biometric outcomes to include achievement of specific body mass index levels and target cholesterol levels. Today, 16 percent of companies align their rewards/penalties with specific biometric targets (other than tobacco use), and another 31 percent are considering this strategy for 2014.”

Wellness incentives to expand; requirements to be tougher
2011 2012 2013 2014
Use financial rewards for people who participate in health management programs/activities 54% 61% 62% 81%
Use penalties for people not completing requirements of health management programs/activities 19% 20% 18% 36%
Require employees to complete a health risk appraisal and/or a biometric screening to be eligible for financial incentives 35% 42% 54% 75%
Require employees to validate participation in healthy lifestyle activities to receive a reward or avoid a penalty (e.g., proof of fitness center use or engagement with a primary nurse case manager) _ 23% 33% 59%
Reward or penalize based on tobacco use 30% 35% 42% 62%
Reward or penalize based on biometric outcomes such as achievement of weight control or target cholesterol levels 12% 10% 16% 47%
Apply rewards or penalties and/or requirements under health management programs/activities to employees and spouses alike 19% 23% 31% 59%

Source: “Reshaping Health Care: Best Performers Leading the Way,” Towers Watson/National Business Group on Health, March 2013

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