To Get This Financial Carrot, Eat Your Vegetables
No one likes paying a high deductible for healthcare. Now you might not have to. A new program lets you reduce what you owe if you meet health benchmarks by, for example, keeping your blood pressure under control. That may be good news for consumers scrambling to cover their out-of-pocket healthcare costs, whom a financial carrot might nudge toward a more healthful lifestyle. But some experts are skeptical that the program will really improve health or reduce overall costs in the long run.
Vital Measures, the new program offered by UnitedHealthcare, lets participating employees earn credits to "buy down" the amount of their annual health plan deductible. Dollar amounts vary by employer, but in a typical case an employee whose health plan has a $2,500 deductible could earn up to four credits worth $500 each by maintaining a healthy weight, keeping blood pressure and LDL ("bad") cholesterol levels within target ranges, and not smoking. If the employee meets all four benchmarks, his or her out-of-pocket deductible cost could drop to just $500.
United began introducing the program this summer for employers with 100 to 1,000 employees in Rhode Island, Pennsylvania, Colorado, and Ohio. The company partnered with benefits administrator BeniComp Advantage to provide the financial rewards part of the program. United is considering a national rollout in 2008, says Tom Beauregard, a senior vice president for product development.
Programs that try to encourage employees to get and stay healthy have been on the rise in recent years. This is partly a result of a trend toward "consumerism" in healthcare: Individuals are increasingly expected to take more responsibility for managing their own health and to pay more out-of-pocket for their coverage. At the same time, employers believe that offering programs that help workers manage chronic conditions or stay healthy is an effective way to contain healthcare costs, despite a relative lack of conclusive data, says Gary Claxton, vice president of the Kaiser Family Foundation.
A key difference between Vital Measures and other so-called wellness programs that promote healthy behaviors, says Beauregard, is that his company's plan rewards results, like keeping body mass index at 27.5 or lower, rather than activities, like going to the gym. The benchmarks vary depending on the employer, but they are less stringent than targets recommended by the National Institutes of Health, he says.
Employees who want to participate in the program fill out a health assessment questionnaire online. Typically, a BeniComp healthcare worker then visits the worksite to calculate employees' body mass index and draw blood samples that are used to determine who meets the other benchmark measures. Those who don't meet the standards because they're carrying too many pounds or are smokers, for instance, can sign up for weight management or smoking cessation programs to help get their "biometrics" in line.
"We're giving people significant financial incentives with the program," says Beauregard, "and coupling them at the right moment with clinical advocacy programs." The combination, he says, should motivate people to change unhealthy behaviors that drive up healthcare costs. The result? Healthier employees and lower healthcare costs all around.
Or at least that's the theory. Some healthcare experts aren't convinced. Switching from a health plan with a $500 deductible to one at a $2,500 level may reduce the premium by as much as a third, so employers save money right off the bat with the Vital Measures program. But the benefit to employees' health and wallets is less clear. "We've known for a really long time that if you give people higher cost-sharing they'll use less healthcare," says Claxton. In other words, employees can be expected to file fewer claims, but not necessarily because they're healthier. Instead, those who fail to meet some or all the benchmarks may cut back on seeing doctors or getting recommended tests to avoid paying for those services out of pocket.
Others question whether reducing someone's deductible is the most enticing carrot with which to induce healthier behavior. Providing immediate gratification—by reducing insurance premium contributions to create bigger take-home paychecks, or by doling out gift cards—gets better results, says Barry Barnett, a principal with PricewaterhouseCoopers. "When do people actually receive the reward here?" he asks. "You have to be sick in order to benefit from this plan."