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Promoting Participation in Employee Health Management

by Scott MacStravic

Healthcare organizations (HCOs) , whether as employers seeking to enjoy the economic gains of employee health management (EHM), or as providers of EHM services to other employers, face the challenge of gaining enough participation among employees to make such services successful.  One wellness program provider, Gordian Health Solutions, has reported that the purely voluntary participation rate among employees tends to be around only five percent. [A. vanDusen “Slimming Down the Workforce” Forbes.com Sep 4, 2007]

Voluntary engagement in EHM programs may be low, but the participants who participate may be more motivated than non-participants to manage their own health, and to reduce whatever risks they have, manage their chronic conditions, and thereby deliver benefit to their employers, as well as to themselves.  But if only 5% of employees at risk participate, the potential gains will necessarily be low compared to the potential if high participation rates were achieved.

Gordian also reports that, with the right incentives, employers have achieved from 60-80% participation.  It suggested that an increase of $30 per month in health insurance premium costs to non-participants could promote higher participation, as well.  But while participation in EHM programs may be necessary to achieving the kinds of economic benefit employers seek, it is by no means sufficient.  It is the “success” or “efficacy” rate that delivers the benefits — of lower healthcare, disability, absenteeism, presenteeism, and turnover costs, as well as quality, customer satisfaction, and new business revenue.

While participation may be increased dramatically through negative incentives, they may reduce the net benefits thereof.  Employees who are punished for not participating, or rewarded for participating, may “participate” in whatever ways are used to measure such participation, in order to avoid personal financial costs or achieve financial rewards.  But will they be truly “engaged”, and make the behavior and lifestyle changes that are necessary and sufficient to improve their health, and thereby benefit their employer?

Moreover, employees who feel “coerced” into participation by threatened punishments may become sullen and uncooperative at work, as well as in their participation.  They may not improve their productivity or performance, due to a decline in their motivation, even if their health improves. [W. Lynch & H. Gardner “A Hierarchy of Aligned Incentives” Health as Human Capital Foundation 2006 (www.hhcf.org)]

And if that were not sufficient reason to be careful, positive incentives add to the costs of EHM programs, dollar per dollar.  Moreover, their effective cost, relative to the benefits desired, is usually increased significantly because of limited efficacy or success rates among participants.  In fact, participation incentives’ costs are multiplied directly compared to the benefits gained, based on these rates.

For example, participation in weight management programs may yield true “success” in as few as 5-10% of participants, in terms of losing weight and keeping it off for an extended period.  Smoking cessation programs may only yield a 20% “quit rate”.  If so, then incentives paid for participation will automatically be multiplied.  To predict this effect, the participation costs per participant are divided by the efficacy rate.

For example, if participation incentives for weight management are $100 per participant, and only 10% lose weight, the effective costs per success are $100 divided by 10% equals $1000.  In other words, it takes paying ten people $100 or $1000 in total, to get one to quit, or $1000 per quitter.  With smoking, a $100 incentive with a 20% quit rate would mean a $100 divided by 20% equals $500 per success.

And these are not the only costs per participant, since the EHM program, itself, will cost something.  If program costs per participant are as little as $100 each, these costs are also multiplied in the same way, depending on the efficacy rate of the program.  This would mean the costs per success for the weight management program would be doubled to $2000 per success, and costs for smoking cessation to $1000 per success.

This would put a major burden on the EHM sponsor and provider alike, since both depend on achieving a positive, and ideally admirable return on investment (ROI) ratio, as well as net economic benefit.  For them to simply break even, the overall economic benefit from weight management would have to be at least $2000 per success, or $1000 for smoking cessation.  This may well be the case, but to achieve even a $2.00:1 ROI ratio, the overall economic benefit would have to be $4000 for weight management, and $2000 for smoking cessation.

This multiplier effect would be significantly less if the efficacy rate for EHM programs were higher.  If the efficacy rate for a stress management program, for example, were 50%, the participation incentive of $100 per participant would only add $100 divided by 50% = $200 per success, as would the $100 in program costs, making total costs only $400.  The benefit per success would only have to be $400 to break even, and $800 to achieve a $2.00:1 ROI ratio.

Moreover, offering an incentive for success, instead of for participation, may significantly increase the efficacy rate of the EHM program.  It should even reduce the proportion of participants who participate just to avoid penalties of non-participation, or gain rewards for participation, and add to the success rate increase.  In the case of weight management, or smoking cessation, for example, the employer could afford to offer a $1000 per success incentive for weight loss, and $500 for quitting smoking, rather than a $100 participation incentive, and still gain the same net economic benefit per success.

Since the costs of a success incentive are subject to no multiplication, they can be significantly more generous than the participation incentive, particularly when the efficacy rate for the EHM program involved is low or only modest.  A large incentive offered for success may be enough to overcome the lack of an incentive for participation, by being significantly larger, and offering a reward that can be gained through behavior the participant can control, even enlist family and friends or co-workers to help the participant succeed.

Another approach that seems to have worked in EHM generally is to appeal to the competitive spirit of employees.  As the vanDusen article reported, the Blue Cross/Blue Shield Association has found that team competitions in EHM help increase participation in its “Engaging Consumers @ Work” program.  A team approach, where participants are grouped in teams with prospects of winning a success incentive based on the success rate within the team, could promote peer pressure and enlist peer support to each member, and raise success rates even more than individual success incentives do, while costing no more.

Since all costs that are incurred per participant “cascade” in a multiplied fashion to costs per success, while success incentives do not, HCOs might at least test the idea to see what improvements in their success rates and net economic benefit results.


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  Pat wrote @ October 3rd, 2007 at 2:56 am

employees who feel “coerced” into participation by threatened punishments may become sullen and uncooperative at work, as well as in their participation.

That is an interesting consequence many don’t anticipate.

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