How well do they work? Companies are offering everything from Green Stamps to days off in order to get participation

Wellness incentives: how well do they work? Companies are offering everything from Green Stamps to days off in order to get participation

Nancy Madlin

Wellness incentives: How well do they work?

The logic behind corporate wellness programs is simple and indisputable: employees who are in better health spend less on healthcare. “The dollar savings derived from wellness can be higher than most companies realize,” says Tom Sawyer, president and CEO of Health Advancement Services, a consulting company in Tempe, Ariz. One of Sawyer’s clients, the city of Glendale, Ariz., has had a wellness program for nine years. The city estimates it gets $10 back for every dollar spent on the program.

It’s no surprise, then, that the number of companies starting up wellness programs of one kind or another is growing. Or that these companies are exploring new ways to improve results by increasing employee participation. “Clearly, people are watching this kind of initiative with great interest,” says Margaret Beckham, information manager at the National Resource Center on Worksite Health Promotion in Washington, D.C.

The more employees who participate in a wellness program, the more potential savings. That’s why companies have tried a variety of methods to increase employee participation, some of which have proven more effective than others. Mandatory employee participation, for example, is not recommended. When a railroad company tried to require its track maintenance employees to do warm-up exercises, the workers threatened to strike unless the program was halted immediately.

Accentuate the positive

Systems that use “disincentives” to penalize those deemed unhealthy also are questioned by many. “Disincentives can create employee relations problems, leading to charges of unfair discrimination or accusations of management interference in private matters,” says Lynn Gilfillan, a wellness coordinator at Coors Brewing Co. of Golden, Colo. “It’s much better to create incentives that put employees in a position to gain something.”

Since 1984, Coors has run a health assessment program, mailing out surveys with over 100 questions for employees and spouses. Along with routine health and safety matters like smoking and seatbelt use, the survey asks about such personal matters as whether, in the last year, the employee has had sexual difficulties or a “stressful Christmas.” Survey results allow Coors to appraise the health status and lifestyle of each employee and spouse, and to direct him or her to appropriate programs.

Filling out the appraisal form is voluntary and the results are confidential. “We felt employees would resent a wellness program that mandates participation,” says Gilfillan. “From the beginning, we wanted the appraisal to have a low profile, so it wouldn’t be a case of management meddling in personal affairs.” And there is an incentive to participate: If the employee’s appraisal shows that his “health age” is the same or less than his chronological age, Coors will increase its health insurance contribution from 85 to 90 percent.

Crossing the ‘goals’ line

“A well-designed incentive program can make significant contributions to wellness success,” says Sandra J. Wendel, editor of Worksite Wellness Works, the newsletter of the Wellness Councils of America (WELCOA) in Omaha, Neb. “Frequently, the presence of an incentive will increase participation, increase adherence to a specific behavior, and increase follow-through by 10 to 20 percent.”

Companies with wellness programs offer employees incentives to reach a number of different goals. The most frequent goal, by far, is to have employees quit smoking, but other common goals include better health via aerobics, biking, jogging, walking, or swimming; and losing weight.

Some companies go beyond even these activities, usually basing program goals on the specific medical risks of their employee populations. A company with a lot of men over 40, for instance, might reward proper diet and exercise; one with a lot of women under 40, obtaining pre-natal care during pregnancy; and one whose employees do a lot of driving on the job, wearing their seat belts.

Time off for well behavior

The incentives are even more various. Companies are using all manner of things to reward employees who participate in wellness programs–fee rebates for completing a weight-loss or smoking-cessation classes; a day off after a year of no smoking; and eligibility for a raffle offering a weekend getawat after one has reachsd weight loss goals.

One of the most effective incentives of all may also be one of the simplest: “I think the most powerful incentive to participation in wellness programs is to offer the program during work hours,” says Roger Reed, vice president of product development at Keycare Health Resources in Indianapolis (formerly part of Blue Cross of Indiana). “That really increases participation; during work hours, you can even reach the unmotivated.”

But, according to Healthy, Wealthy & Wise, the managers’ guide published by WELCOA, time off from work is just the beginning; as a reward for reaching a fitness goal, companies are also awarding T-shirts, gym bags, sun visors, pens, thermometers, relaxation tapes, water jugs, beverage mugs, car safety kits, videos, books, blood pressure monitors, coolers, magazine subscriptions, jackets, sports clothing, and gift certificates to stores and restaurants. (“People will do anything for a T-shirt,” says the WELCOA guide. “And they’ll do even more for paid days off, cash, and praise in the company newsletter.”)

Some consultants say that if employees seem a health-oriented group to begin with, incentives may not be appropriate in every case. “The first year we put a wellness program into place, we can have very high participation rates–three of our new clients this year came in at 85 percent–without any kind of incentives,” says Tom Sawyer. “I usually recommend letting the program get running, and if utilization drops, then use incentives.”

In general, the most common kind of incentive program is one in which employees receive points for exercise activities they pursue outside of work, aiming towards some milestone at which they receive a prize. At K Products, a manufacturer of advertising specialty items in Orange City, Iowa, with 1,400 employees, 460 people participated in the “Wellness Team” in its first year, 1989. “We made it simple to encourage people to join, and we expanded the eligible activities this year,” says Bonnie Huygen, K Product’s manager of personnel services.

Employees receive 10 points for each half hour spent in any of 18 different activities–like walking, running, biking, tennis, weight lifting, rowing, jump roping, and wallyball. At the 600-point plateau, they receive a T-shirt; at 1,200 points, they’re eligible for a drawing for a Walkman; at 1,800 points, they receive athletic shorts; at 2,400, a sweater; and at 2,800, the final plateau, they’re entered in a drawing for a clock/radio/phone. Huygen says that while the program probably doesn’t save the company all that much in medical costs, it does contribute greatly to employee morale. “The program shows a positive commitment,” she says, “by the employer to the employee.”

S&H Green Stamps

John Alden Life Insurance Company in Miami, Fla., runs an expanded version of this kind of prize-giving program. To chart their progress through the company’s “Health Works” program, employees are issued a “passport”; points are awarded for participation in a list of company-sponsored events, most of which are held after work. For joining the company-organized Weight Watchers group, for instance, an employee gets 25 points; for completing a running or walking event, he gets 20. Points are also garnered for aerobics classes, participating in a team sport, attending a presentation on a health subject, serving as a wellness committee volunteer, bringing your family or your boss to a presentation, or giving blood. Prizes are awarded through the S&H Green Stamps catalogue, at four value levels ($25, $50, $75 and $100). The employee who accumulates the most points over the course of a year wins an all-expenses-paid vacation.

Foldcraft, a restaurant furniture manufacturer in Kenyon, Minn., offers several kinds of incentives for participation in its extensive wellness program. These include prizes such as clothing and gift certificates–and casg bonuses, along with time off from work. Although the company has only 300 employees, Foldcraft offers 11 different ways for them to participate in wellness.

Prizes are offered for participation in a pre-work warm-up program, in “wellness walks” of predetermined length, in team weight loss competitions, and in weekly wellness meetings which offer speakers and videos on various topics. For taking a voluntary drug test, employees receive an extra half vacation day.

Monetary awards in the form of increased employer payments for health insurance are offered for participation in the company’s health assessment screening. Just taking the screening (for cholesterol, blook pressure, flexibility, heart rate, body fat, and oxygen uptake) saves the employee $20 per month on health insurance. Assessment results are then rated, with health insurance rebates awarded on the basis of scores; amounts range from $60 to $480 a year. Two hundred and fifty people participated in the program last year.

About 15 people a month also receive cash bonuses for participating in Foldcraft’s “health practice program” for aerobic activity pursued outside of work. Employees accumulate points for activities practiced at a certain level (walking two miles within 30 minutes, for instance, gives you five points), and anyone who has 100 points or more at the end of the month gets $15 in cash. At the end of the year, the six top scorers receive $150.

At Howard County Community Hospital in Kokomo, Inc., eligible employees can save up to $20 a month on their health insurance payments if they meet certain health guidelines: blood pressure meeting the American Hospital Association standard (with or without medication); not using tobacco products; and weight within five percent of ideal, according to the 1983 Metropolitan Life tables. Last year, 405 employees participated in the assessment.

In 1989, U-Haul Corp. of Phoenix, Arizona, paid $18.6 million for medical care for employees and dependents. “A large portion of that,” says spokesman Allen Weinstein, “covered illnesses attributed to the use of tobacco and to weight problems.”

To encourage employees to quit smoking and lose weight, U-Haul is offering to waive its health insurance copayments of $5 each biweekly pay period (for a single employee; $10 for one with a covered spouse) to those who don’t use tobacco in any form and meet weight guidelines.

“In general, financial incentives are still quite rare,” says David Gobble, associate director of the Institute for Wellness at Ball State University in Muncie, Ind. Of such incentives, cash bonuses are extremely rare and rebates on health insurance the most common.

Check-ups, not checks

Although rebates seem logical to many, it’s not always easy to put such a plan into effect. “I think that tying wellness participation to lower insurance costs would have a positive effect on our program,” says a wellness manager at an oil company. “I’ve suggested it to management several times since 1983, but they always have a problem with how you can prove that people aren’t smoking, or that they are exercising at home?”

“Some companies want to prove or document everything, while others tend to take peoples’ words,” says Ed Stasica, cost-containment and wellness consultant in Mount Prospect, Ill. “It really depends on the overall philosophy of the company.” At present, more companies than not seem to be relying on an honor system, with the employee simply filling out and signing a form to “prove” that he’s done the incentivized activity. Although most companies do not do specific tests to see if the employee is telling the truth–like testing the blook of an alleged non-smoker for nicotine–it’s clear that, in the case of smoking and exercise, outright lying would almost certainly be visible in the overall general assessments periodically performed.

Others, however, choose to sidestep the verification issue altogether. In the 50 programs it designed and administers, Health Advancement Services, which specializes in health risk assessment strategies, always offers incentives (frequently partial waiver of deductibles) strictly for participation in the wellness program–not for performance. “One of our companies is considering giving non-smokers a break on their health insurance premium,” says CEO Sawyer. “But I’m recommending against it. Howe do you know he’s not smoking? Maybe he’s smoking on the weekend. If you’re trying to find out, then you’re a policeman.”

The Health Adavancement program typically consists of completing a questionnaire, going through a screening plus visiting an on-site nurse for an evaluation. That’s what the employee is rewarded for; after that, it’s up to that employee to take further action.

And the honor system works, Sawyer says, Positive changes are visible in test results. At one site, for instance, 64 percent of employees tested had a cholesterol count of over 200 in 1989; in 1990 only 32 percent had those results.

Wellness and wimpery

In incentivized wellness programs are such a great way to control health care costs, why don’t more companies have them?” Most companies have a short-sighted approach to cutting costs,” says Roger Reed of Keycare Health Resources. “They wan to do something that cuts costs today, not tomorrow.” Also, wellness is a “soft” idea that doesn’t always sell well within the corporation. “I never use the term wellness; it’s a pansytem that doesn’t make sense to bean counters and executives,” says Bob Gorski a benefits directors at Whitman Corp., a Chicago-based Fortune 100 company. He prefers “health risk management.” to describe his programs.

All agree, however, that interest in these inds of programs is growing. “As health insurance costs rise, the employees themselves will be demanding this,” says Ed Stasica.” I can envision an employee looking across the office and thinking ‘This guy is running up the health care costs. Is that fair?’ In the future, health insurance will become like car insurance–if you have accidents, you pay more.”

COPYRIGHT 1991 A Thomson Healthcare Company

COPYRIGHT 2004 Gale Group