Employers add incentives to wellness programs

Thursday, June 28, 2007 | 2:49 a.m.

Five years ago, employers built company gyms and put healthy lifestyle articles on Web sites. Neither of those really made workers shape up.

Now companies are giving $25 checks for every woman who gets a mammogram. They're reducing insurance premiums up to $200 a year for healthy choices.

Are the workplace wellness programs working better? Research shows that managers assume so, although not many can prove it.

A study unveiled June 21 at the America's Health Insurance Plans conference at Wynn Las Vegas showed just that. Only 14 percent of large companies with wellness incentives have successfully measured their return on investment.

"The use of incentives is so obvious that not many feel that an ROI measure is necessary," said Edwina Rogers, the vice president of health policy with the ERISA Industry Committee, which represents companies with more than 25,000 employees. "But we need to benchmark this information. We don't think every company needs to determine ROI. If a few companies do, many will accept this information."

The AHIP report was conducted by Incent-One - a company that guides businesses in offering these incentives - along with the ERISA group and the National Association of Manufacturers. Companies belonging to the ERISA committee and NAM answered surveys for the report.

True to form, the surveyors offered $10 gift cards for those who completed the online questionnaire. Responses from 242 companies made up the results.

Three-fourths of the companies surveyed said they offer health management to employees, and of those companies two-thirds said they used incentives. Surveyors found that premium reductions were the most common incentive, followed by cash or bonuses.

Almost two-thirds of those companies said they had never attempted to measure ROI, even though 70 percent of companies said that such programs would be unacceptable if they didn't result in a profit.

Leaders said this was a starter study, and more could help perfect the concept of employee health management. Future reports, for example, could measure exactly which incentives are most profitable.

"The ideal is to reduce claims down the line," said Michael Dermer, chief executive and co-founder of IncentOne. "There's accepted research that early detection (will do that)."

A company may spend $25 to get a mammogram for a woman, then later save $130,000 on advanced treatments for breast cancer, he said.

The study drew skeptical questions from the audience. Why should a company put money into the health of their employees if it's unclear that the employee will keep working there?

According to Dermer, some immediate cost savings are seen. Generic drugs are cheaper than brand-name ones. An online answer center is less expensive than a nurse-staffed call center, which is cheaper than having employees visit a doctor for every question.

"You have to take into account the level of participation," he said.

A side result of health-program incentives is the buzz created around the office, said Katherine Herring Capps, president of consulting firm Health2 Resources, who also spoke about the report.

"They work to spread the word very quickly," she said, noting that part of the investment pays off immediately.

Long-term benefits have yet to be determined, officials said.

Dermer, head of the incentive company, predicted what the future of wellness programs will look like. Incentives will be simplified, much like rewards points used by credit card companies.

"One of the challenges in health care has been clutter," Dermer said. "Simplicity and health care do not go together."