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Scott, this is a very salient article given the current growing interest in incentives. Two quick thoughts: First, keeping in mind the primary objective of such programs is actual, real and preferably lasting lifestyle behavior change, we currently avoid discrimination issues by tagging incentives based on participation, but do so in a sort of upstream, graduated rewards approach. We know that to get to point C, one must have traversed through point B from point A. We reward for each milestone along the way, and each milestone is designed to require effort and consistency, building upon progress, however small. There is still an element of rewarding “good faith efforts,” as you say, but we believe (for now at least) that short of hard line objective measures of improvement, this offers the best opportunity to lead people down a proven path of enlightened healthier living. The second point is simply this: linking wellness incentives to performance at the individual level for most white collar jobs is a pretty complex nut to crack and a ways down the road, given my experience with companies all over the country who still struggle with discovering just what exactly drives their bottom line. Unfortunately perhaps for now, we’re still at the stone age of performance where just getting employees to show up to work consistently and on time would be a major accomplishment. We’re hoping at least, that a solid wellness program with carefully designed “participation” incentives can move that meter a bit.
Travis Haws
Managing Partner
WellVentures

I can’t argue that paying incentives for participation and effort is not a reasonable approach to improving employees’ health behavior, and ultimately their health and performance. On the other hand, I think that there are many more advantages available if employee performance is also measured and managed, in general. Performance-based management holds a lot of promise in terms of developing individual employees and the entire workforce, while performance-based compensation is probably the most sensible approach to both promoting improvements in performance, and improving the mix of high vs. low performers in the workforce.

The other great advantage of tying employee health, competence, and time management improvement efforts to measured performance is that it enables employers to predict and identify the dollar value of such improvements and thereby know exactly how much they can afford to spend in achieving them, as well as in sharing their gains with their employees. I agree that measuring performance is anything but easy, but it is all to easy to dismiss the idea on that basis rather than give it a good try, and given the full potential for gains to employers, a good try would seem worth the effort. It would be a great place for employers to invest funds in research, and in sharing what they learn with their peers, on the grounds that a rising tide raises all boats. The kind of cooperative efforts already in effect, in promoting health improvements and performance measurement/rewards for health care providers among employers, such as the Leapfrog Group, national and state business groups on health, etc. could serve to help all employers master performance and employee value measurement, or at least come a lot closer to an effective and affordable approach. Knowing the value of improvements in health in terms of dollar impact on performance strikes me as something worth investing in.

“Rewarding only those who achieve or maintain healthy behaviors would be unfair discrimination.” So, employers showing “good-faith” efforts and failing are conflated with employers whose efforts succeed. In other words, best practices are rewarded along with worst practices. Hardly makes sense, does it? But then, neither does using employers as the delivery mechanism for health insurance benefits. As long as that situation obtains, American manufacturers will never be competitive with overseas companies. Jobs will continue to be outsourced. And, retraining displaced workers for meaningful new employment will never occur because (a) there will be no companies at which to employ them because (b) it will be economically infeasible to start a company in a new industry if only because it will not be able to find enough trained workers. Talk about a Catch-22!
Let me know your thoughts.

Fortunately, it is still in employers’ best interests to devise and improve the methods they use to protect and improve their employees’ health, and avoid paying incentives for nothing. It would be great if employers shared with each other what they learn in regard to what works best, rather than keep them as “proprietary trade secrets”, and a lot of employers are sharing already. It may not make sense for employers to bear the costs of sickness care insurance for their employers, but it does for them to bear the costs of investing in employee health, since they enjoy the gains in productivity and performance that come with improved health. Even in countries where employers do not pay directly for employee health insurance, they usually pay taxes that add to their costs in order to support national health insurance, otherwise who can cover the costs? And it is more the high costs of sickness care in America that burdens our industries in global competition, not just the fact that they pay directly for their employees. As for retraining displaced workers, a lot of employers are, themselves, investing in re-training and “up-training” their own workers in order to create more skilled workers that they need and which are increasingly in short supply. Employers are becoming just as important to the “education system” as they are to the “health system”, though just as in healthcare, many get a “free ride” by not investing in either. I personally like the approach that Ireland took in the past decades, investing widely in technical education for everyone and becoming the source of skilled workers for the world, eventually bringing entirely new industries and jobs to a country that had been exporting workers elsewhere, but we’d rather invest in unsuccessful wars on drugs, terrorism, etc.

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