Health and Wellness Incentives: Positioning for Outcome-Based Rewards

Support Outcomes-Based Health Incentives with Communication, Culture of Health

Even while rewards for biometric measures continue to proliferate, it's best to review some behavior change basics before adding outcomes-based incentives to a wellness offering, advises John Riedel, president of Riedel and Associates.

Behavioral economics, a field built on the belief that people are susceptible to a wide range of influences, is a good place to start, he says. "An individual's environment, work culture, emotions and social networks all have strong impacts on the decisions that they make," said Riedel during a recent webinar Health and Wellness Incentives: Positioning for Outcome-Based Rewards.

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Health and Wellness Incentives: Positioning for Outcome-Based Rewards

An individual's motivation can be either extrinsic — motivated by what they will gain when the task is completed, which is usually money, or intrinsic: stemming from the individual's own desire to accomplish and perform the task. With intrinsic motivation, the result is its own reward. Working with others, as in a team-based wellness competition, is one factor that can build intrinsic motivation, Riedel notes.

Ultimately, intrinsic motivation is the primary principle of behavior change, he stresses. However, money still talks when it comes to completing select wellness activities. A Towers Watson Staying@Work Survey Report found that in 2011, half of respondents offered financial rewards for participation in a health program. Biometrics, HRAs and team wellness challenges are particularly responsive to financial incentives, he adds.

Health coaching is another heavily incented activity, a strategy Riedel finds useful. ""If you're using progress-based incentives, lifestyle coaching can help you to set the goals that are of the greatest interest to you."

As health incentives evolve from participation-based to progress-based — created according to the individual's place on the health continuum — to outcomes-based, healthcare companies need to keep an eye on the legal requirements surrounding these programs. One example is the ACA's "reasonable alternative standard," which protects individuals who are unable to meet an outcomes-based incentive.

For example, a morbidly obese employee might not be able to hit weight and blood pressure targets set for the overall workforce, so that employer would have to create a reasonable alternative standard for that employee.

The ACA also delineates wellness reward amounts and eligibility standards and distinguishes between participatory wellness programs and health-contingent wellness programs.

Ultimately, regardless of the incentives offered, participation in wellness activities is greatest when incentives are paired with a strong organizational culture of health and a compelling communications program that is "comprehensive, organization-wide (with a mix of information and inspiration), as well as the use of posters, the Internet, and social tools."

And one final behavior change principle to keep in mind: people tend to follow the default option, so when designing health and wellness offerings, make the healthy choice the default.

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I hope you find it useful.


Melanie Matthews
Executive Vice President
The Healthcare Intelligence Network