Secrets to Launching an Effective Wellness Program: Employee Incentives

(Fourth and final in a series. Offering employee incentives is one of the most important components in creating a successful employee wellness program in your company. Sentara Healthcare’s wellness plan, while partnering with Optima Health, is an incentive-based plan that both improves employee health and saves money for the company.)

While many companies have had wellness pro­grams in place for years, often these programs achieve only modest success. Typically they are designed to appeal to healthy employees who are already committed to their health. Signifi­cant healthcare savings can only be achieved once employees who have the greatest negative impact on healthcare costs have been motivat­ed to make healthy choices.

Studies suggest it’s the “carrot” approach of rewarding employees—often in the form of reduced insurance premiums—that successfully changes lifestyles. In 2007, Johnson & John­son avoided $15.9 million in costs through its healthcare initiatives, and Pitney Bowes saved $40 million in the past decade through incen­tive-based wellness programs.

Sentara Healthcare, the parent organization of Optima Health, has experienced the rising cost of providing healthcare to its 20,000 employees throughout Virginia and North Carolina. In 2008 Sentara Healthcare partnered with Optima Health, its insurance carrier, to manage employee health costs.

Mission: Health launched to all 11,200 benefits-eligible employees in 2008. Employees were asked to complete a personal health profile (PHP) including information such as recent blood pressure, total cholesterol values and HDL (“good” cholesterol), height and weight, tobacco use in the past three months and exercise frequency. Onsite screenings were offered for employees to obtain current vital sign measurements.

The information was used to determine health risk factors. Employees with no or low health risks were immediately eligible for reduced premiums or earned credits to offset other benefit offerings. Those with several health risks who agreed to quarterly telephone conversations with health coaches were also immediately eligible for reduced premiums or credits. Employees who declined to participate in the program forfeited premium discounts totaling $500+ annually.

Employees with targeted chronic diseases—diabetes, coronary artery disease or congestive heart failure—or who were pregnant at the time, were eligible for additional incentives worth $460 per year. By more actively managing their disease through healthy choices, such as taking prescribed medications as scheduled, everyone wins.

In 2008, 92 percent of benefits-eligible employees took the voluntary PHP. By year’s end, 79 percent of Sentara employees were participating in Mission: Health, including 53 percent of the disease management-eligible employees – particularly significant since the sickest employees tend to be the most reluctant to participate because they are afraid they will fail, according to Karen Bray, Ph.D., RN, Vice President, Clinical Care Services, Optima Health. Only 21 percent of employees elected not to participate.

During the first year, overall employee medical claims increased by 13 percent, largely due to an overall 18 percent increase in pharmacy costs as employees were treated for underlying condi­tions such as hypertension and high cholesterol. This led to an unexpected 5.7 percent increase in Mission: Health costs.

By the second year, an even greater number of employ­ees were demonstrating healthy behaviors, and outcomes were extremely positive. During 2010, Mission: Health demonstrated significant clinical improvements in total cholesterol, blood pressure, body mass index (BMI), exercise and tobacco use.

In the diabetes program, significant improvements were made in members complet­ing recommended testing, such as eye exams. Ninety-two percent of employees in the diabetes program were compliant with eye exams com­pared with an industry standard of 51 percent.

The most dramatic results were realized in the disease management group. Costs for the 530 members of the group, who were enrolled all three years, were controlled significantly better as modifiable risks and behaviors improved. Except for pharmacy costs, all healthcare costs for this group decreased, leading to an average decrease of 37 percent per employee.

This was a 12.3 percent decrease against the expected trend as employees improved their risk factors. Costs were expected to rise from 8 to 10 percent annually (at least a $4.2 million increase over two years), instead costs rose only $1,286,000 over the two years. For every dollar spent to incentivize employees to improve their health through Mission: Health, Sentara Health­care saved a whopping $6.

Soon updated figures will be announced for Mission: Health as the savings continue. Is your company incorporating employee rewards into its wellness program? How is is that paying off for your company?

If you would like more information about the results of Sentara’s Mission: Health program, check out The Wellness Payoff.

For more information on starting your own wellness program, contact us.