Insurer Tries a Novel Idea to Improve Members' Health

What if the size of your bonus depended on how well somebody else took care of himself? Think you might try to do everything in your power to get that person to stop smoking or adhere to a drug regimen or physical therapy program?

WellPoint Inc. thinks so, too. That’s why the Indianapolis-based insurer has decided to tie 5 percent of its associates’ annual bonus to improving the health of its 34 million members.

Lisa Latts, MD, WellPoint’s vice president of programs in clinical excellence, says the idea of tying bonuses to member health came about because the insurer now has a mechanism to accurately measure member health.

“The member health index came about because our mission is to improve the lives of our members and the health of our communities,” she says. “We had to figure out a way to measure explicitly how we were doing in achieving our mission.”

Based on claims data, the proprietary index measures overall member adherence to prevention and screening, chronic care, care management and patient safety.

But 5 percent? Is that really enough to change associates’ behavior toward WellPoint’s members?

It’s a fair question, Latts replies—and it was the first one she had to answer from WellPoint’s board of directors when she unveiled the plan several months ago. She adds that if the program is successful, more of the bonus might be tied to member health in future years.

Latts couldn’t say what average dollar amount is at stake per WellPoint associate because of the huge variation in bonus amounts based on salary and the fact that 2007-2008 will be the first fiscal year the plan has been in existence. “Ask me next year,” she says. But the company’s culture of reaching certain performance targets that will trigger bonuses is so ingrained that the e-mails started flying about possible strategies to help improve the member health index as soon as it was announced.

“Our people don’t want to leave money on the table,” she says. But what’s in it for WellPoint as a company? “If you want to take it to a base level, we think keeping people healthier and improving the quality of care they get will save us money in the long run.”

—Philip Betbeze