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Dealing with Voluntary vs. Default Participant Differences in EHM

by Scott MacStravic

There are four simple ways to deal with any differences between voluntary and default participants, though the effectiveness of each will vary in each EHM situation:

  1.    Minimize per participant costs
  2.    Find out what the different success rates are for voluntary vs. default participants
  3.    Offer success incentives
  4.    Offer choices vs. predetermined EHM programs

1.  If default participants deliver lower gains per participant, then EHM providers and clients should make sure that the costs per participant are still less than such gains.  One approach is to use charges and costs that apply per population, rather than per participant.  When fees are set and costs incurred on this basis, and there are no added costs based on how many participate, increasing participation rates will always end up doing at least as well and usually doing better by using the default option.  As long as even one more participant than would have enrolled voluntarily succeeds, results will be better.

On the other hand, if EHM providers charge per participant, then the default option may result in too many participants and too high costs for the average gain per participant to overcome.  The provider’s or employer client’s past experience should reflect what the average gains per participant have been under the most common scenarios:

* Voluntary enrollment
* Voluntary enrollment with incentives
* Default enrollment

If default enrollment strategies in the past have reduced the average gain per participant to levels that yielded lower ROI ratios and amounts than the two voluntary alternatives, then either costs/charges per participant should be lowered, or the option should not be chosen.

2.  Assuming that EHM providers have worked with both voluntary and involuntary participants before, each should be able to describe what the different success rates for each have been, so that the expected benefits vs. costs for both cohorts can be at least estimated.  Providers may be willing to guarantee some minimum ROI, for example, putting the onus on them to make sure that the EHM program works well enough among all participants to achieve desired results.

If past experience has indicated that success rates per participant have been higher for voluntary participants, but the success gains for default participants have been high enough to justify their inclusion, given costs per participant, then the default option may make sense.  Basing the decision on the EHM provider’s experience, rather than the client’s means there is the risk that the client’s situation and population at risk may be different, so extrapolation from such experience may be inaccurate.  A pilot test of the client’s population may be used to check this possibility, or the provider may be willing to guarantee acceptable results with the default option.

3.  The use of adequate success incentives rather than participation incentives should encourage significant effort among default participants.  Whenever enrollment in the EHM program is by automatic, default with opt-out choice, paying incentives for participation doesn’t make much sense anyway, while incentives for achieving whatever is defined as success can motivate both voluntary and default participants.  Such incentives will add to the costs of each success, however, so their amounts will have to be sufficiently less than the average gain per success to ensure positive ROI ratios and adequate ROI amounts.

The gamble involved in success incentives is that they will have to be paid to those who would have succeeded anyway, as well as those who would not.  So EHM providers and their clients should compare scenarios involving only voluntary participants and no success incentives compared to default participation with success incentives to see which delivers the best mix of ROI ratios and amounts. Another option is to base the success incentive on improved productivity and performance, rather than health behavior/status improvements, so that the employer will see that the direct economic gain from success justifies the incentive.

4. Even though enrollment in the ov