Recently, the federal government published Final Rules on wellness incentives. What’s in it for you? From next year, your employer may increase your insurance premiums by up to 50 percent of the cost of coverage if you smoke. If you’re overweight, you may look at a 30 percent surcharge. But employers may also reduce premiums by up to 30 percent for normal weight.
Will such incentives be effective health promotion tools, or merely means to shift cost to the unhealthy? Regrettably, we may never really know. This is why we need reporting of key features of all wellness programs.
Wellness incentives typically come as ‘carrots’ or ‘sticks’. In the ‘carrot’ format, they reduce net insurance costs by a certain amount, provided you engage in healthy behaviors. ‘Sticks’ impose a net-increase if you don’t.
Incentive levels are capped if a target, such as normal Body Mass Index or not smoking, is to be met. Regulations issued in 2006 defined a maximum of 20 percent of the cost of coverage, “to avoid a reward or penalty being so large as to have the effect of denying coverage or creating too heavy a financial penalty.”
But the 2010 Affordable Care Act (ACA) changed this to 30 percent, and 50 percent subject to special approval. An influential voice was Steve Burd, then CEO of Safeway. Likening unhealthy people to risky drivers, he argued that they, too, should face higher insurance premiums, and that the 20 percent threshold was too low. Even though many people seem to see no need for such increases, the provision entered into the ACA through the so-called ‘Safeway Amendment’.
Clear Promise, But Also Questions
Evidence on the effectiveness of incentives shows clear promises in some cases, but is only just emerging. A review of several decades of weight-loss studies found positive but varying effects, noting that “many important questions about the use of incentives have not yet been clearly answered”. A recent systematic review of 19 smoking-cessation incentive programs identified only one as effective. The Final Rules acknowledge: “insufficient broad-based evidence makes it difficult to definitely assess the impact of workplace wellness on health outcome and cost”, a point echoed in a recent major report to Congress.
Regardless, more than half, possibly 80 percent of all employers used incentives last year, according to three major surveys. But not all employers respond to these surveys. Nor do the surveys tell us how many and what kind of programs use ‘carrots’ or ‘sticks’, or how high rewards and penalties are. Few programs have been evaluated, and even fewer evaluations are published, with an overrepresentation of large employer studies and an underrepresentation of negative findings.
Current knowledge about practice and best practice is therefore patchy, and the Final Rules expressly do not require that programs conform to clinical guidelines or national standards to ensure quality. Consequently, employees may lose out on the most effective programs, and worse, may needlessly be exposed to poor or perhaps harmful or unfair designs. The 2006 regulations’ concern that incentives above 20 percent might unduly penalize some employees triggered no response.
Building The Evidence Base
On medical, economic and ethical grounds, we need to know more about the effects of wellness programs. We need evidence-based wellness incentives.
Commentaries on the Rules submitted during the consultation period by major stakeholders agree. The American Public Health Association is concerned about real or perceived discrimination and encourages the government to track and evaluate incentives that require meeting a target. The American Cancer Society Cancer Action Network and the American Heart Association recommend that the Department of Health and Human Services evaluate programs’ effectiveness and provide examples of successful models. The American College of Physicians highlights proposals for grants to be established to evaluate programs. The Health Enhancement Research Organization equally encourages more evaluations on effectiveness, as does the National Business Coalition for Health, which additionally emphasizes the need to share data freely and make it publicly available.
While these laudable recommendations require a range of policy responses, two key steps can help make significant progress in the right direction.
A public registry. First, the relevant federal departments should establish a central public registry in which all employers should enter basic features of all offered wellness programs. The CDC’s Healthier Worksite Initiative would be a fitting location. The data would be the same that employers provide to their employees with minimal data protection issues and administrative burden. Data should include the kind of incentivized behavior; the size of the reward or penalty; the availability of support and ethically relevant alternative standards (emphasized in the Final Rules); and whether programs are evaluated. Accreditation systems such as the NCQA’s Wellness & Health Promotion Program should require employers’ cooperation in entering information into the registry and keeping it up to date.
A registry increases transparency and accountability. Trends can be monitored, and regulators can incentivize evaluations of certain programs, for example those that affect particularly large numbers of employees. As a clearinghouse, a registry can connect academic researchers, journalists, or other employers interested in learning from particular programs. Voluntary information on other relevant features (eg: participation and completion rates) could also enable further analysis; showcase and reward excellence; and enable feedback to employers from an unparalleled and fully representative dataset.
The NIH clinical trials database. Second, all programs taking the form of trials should be listed in the NIH’s clinical trials database and include all findings (positive as well as negative). Findings should also be linked with the central registry, so that employers entering a new program receive alerts to avoid poor designs and improve on effective ones.
Wellness incentives hold considerable potential to improve health. Yet, we know little about which designs are the most or least effective nor about how widespread which types of programs are. The newly increased levels are likely to spur considerable experimentation by employers. More is needed to move towards fully evidence-based wellness programs that set out here, but the above steps can help make significant progress towards effective and fair wellness incentives.