Hospital and Health System

Do Incentives Drive Participation in Health and Wellness?

Three industry experts discuss the use and impact of incentives in gaining participation in health and wellness initiatives.

The number of employers who are using incentives today to drive participation in health and wellness initiatives is on the rise, notes Jennifer Hidding, former director of interactive health management of consumer solutions at OptumHealth. “In 2007, 62 percent of employers were engaging in some incentive program supporting their behavior change or health and wellness programs. By 2008, that had jumped up to 71 percent — almost a 10 percent increase in one year as employers recognize the need to drive engagement and motivate employees through incentives. From 2007 to 2008, gift cards and premium reductions have made a huge swing in the marketplace. The increase in gift cards is almost exactly offset by the decrease in premium reductions. We believe this is happening because gift cards offer an instant gratification access. It’s the world we live in today — people want it now. Once they’ve completed the activity, they want their payout almost immediately. Gift cards are very tangible, and they offer consumer choice.”

Ted Borgstadt, co-founder and CEO of TrestleTree, Inc., advises that organizations give careful thought to incentive programs. “The whole concept of incentives is a very critical one to understand for your population, but it’s also dangerous. The first question that arises is, ‘What do you do when you take that stimulus away?’ Is it truly behavior change, or is there a stimulus, and you’re only going to do something while the stimulus is there? We all have to make sure we align incentives to get people into the program. With the individual, there may be some incentive for participation, and incentives can still be used to help drive success. But if that is the key lever to say, ‘Let’s just give accountability and then let’s put an incentive in place,’ you’re going to be very limited on the number of people that you’re going to enroll in the program and have sustainable change on the back side.”

Many organizations have noted a dramatic impact on enrollment when incentives are used. Notes Roger Reed, chief consumer engagement architect for Gordian Health Solutions, “If the program is incentivized — typically a $20 to $30 per member per month (PMPM) incentive or premium differential — the enrollment rate rises dramatically to between 65 and 85 percent. Those individuals who know that their paycheck is going to be touched every month will enroll if they’re eligible. Virtually nobody drops out. We have an incentive program whereby we ‘touch’ their paycheck. We change their premium contribution based on their compliance with the coaching effort that month. We turn this contribution off and on.”

If participants are incentivized, they don’t drop out, Reed continues. “Close to 90 percent remain enrolled for the entire year because they don’t want their paycheck touched. If participation is voluntary, half of them will have dropped out by the six-month point, and another 25 percent between the six- and 12-month point, so only about 25 percent will continue.”

Source: Health Coaching Benchmarks: Operations and Performance Data for Optimal Program ROI and Participant Health Status, February 2009