Can You Pay People to Be Healthy? - An Example From the Airline Industry

Why would anyone attach their activity tracker to a ceiling fan?

True Story: Last night as I was flying out of SFO, delayed by fog, I overheard two Virgin America flight attendants talking about their participation in their company incentive-based wellness program.

Flight attendants talk about their wellness incentive program

Flight attendant 1The first, very svelte and young flight attendant held up the fitness tracker on her wrist and said to the other "I made $50 this month for activity tracking in the wellness program. How about you?"Flight attendant 2 The other, a little less svelte, looked at her and said, "I haven't done anything yet but I don't plan to miss out. My friend attaches his to his dog and wracks up the activity miles. I'm going to attach my to my ceiling fan."

So much for incentive programs cultivating habits that matter!

Attach your fitness tracker to a ceiling fan to get a reduction on your employer sponsored health care premium

Why Incentive-Based Wellness Programs Will Not Reduce Health Care Costs

There is nothing wrong with Virgin’s program to distribute activity trackers so individuals can understand and track their activity levels. It may be a good for morale and adding a financial incentive may be just the push that spurs healthier individuals to make the improvements they wanted to make all along.But as was clearly represented in the conversation between the two flight attendants, associating a financial reward with behavior change around health, doesn't translate to sustainable change. It encourages finding ways to get payment. An employer could, of course, make the incentive dependent on some other health risk measure so cheating is more difficult. That has its own problems including the risk of lawsuits.But the core problem still remains: the behavior change (or cheating) is just to get the incentive. It is not motivated because the individual understands and cares about themselves enough to make long-term lifestyle changes. Therein lies the problem with wellness incentive programs.

You can’t pay people to start taking healthy care of themselves. You can’t penalize them when they don’t.

To create sustained behavior change, offering incentives is not only less effective than other strategies but often proves worse than doing nothing at all (since it makes it very clear to the individual that their motivations are externally driven). Lasting change in health behavior requires creating internally generated motivators and incentives.

Is There a Financial ROI From Wellness Programs?

Wellness incentive programs typically offer some variant of a discount on insurance premiums if an employee completes a task such a health assessment, a minimum number of "steps" each day, setting up team weight loss competitions, or even regular dietician coaching sessions. Despite employers' growing investment in these programs, there is little evidence that such programs produce short-term return on investment.The best programs may be reasonably effective in helping workers with smoking, weight reduction and diet. But what they don't do, according to the data, is reduce healthcare costs.There are three clear reasons for this lack of ROI:

  1. Wrong Audience - Healthy employees, the ones that are motivated to participate in most wellness programs, will have minimal impact on health care cost savings. Employees with chronic medical conditions such as heart disease and metabolic syndrome, could have a significant impact on cost savings but are far less motivated to participate.
  2. Lack of time - Programs that require dietician or health coaching, fitness programs, etc. require time. This is a serious impediment for most workers since they have other competing priorities.
  3. Behavioral Psychology - Associating financial incentives with lifestyle change pairs the wrong type of reinforcer/motivator with the desired behavioral outcome. The lifestyle behaviors have to be intrinsically motivation to be maintained.

Marketers Can Shift the Message From ROI to VOI, But the Cadillac Tax Deadline Still Looms

Because of this problem in demonstrating ROI, the burgeoning industry of wellness providers, is trying to shift the message from health care cost savings (ROI), to other measures of success that don't involve reduced health care costs but focus on Value of Investment (VOI) - happier employees, potential changes in the long term, or even modest changes in health but that cost just as much to implement as insurance premiums.

Wellness incentive programs can deliver VOI, not ROI

Essentially the new marketing message is that you may get a negative ROI, but the results for at least some employees can still be positive!So how are employers going to lower the cost of their health plans and avoid the 40% excise tax starting in 2018 on high-cost plans under the healthcare reform law?

  1. Focus wellness programs on preventable chronic disease - Specifically design programs for individuals with heart disease and metabolic syndrome.
  2. Use mobile therapeutics for self-managed engagement - Instead of starting with the premise that employees need to change their behaviors, focus on rewarding individuals for caring about themselves enough to track and understand their condition.

Interested to learn more about this clinically validated approach? Email us about our corporate wellness partners program.