Wellness Incentives Persevere Despite Economy

Even in the throes of a deep recession that is prompting large-scale wage and benefits freezes and mass layoffs, a new survey by the National Business Group on Health shows that many large companies aren't giving up on wellness and health management programs for their employees. In fact, more than half the companies surveyed are providing financial incentives to promote the programs.

The January survey of 489 large businesses, the 14th annual survey conducted for NBGH by Watson Wyatt consultants, found that 58% of the companies offer lifestyle improvement programs, up from 43% in 2007, while 56% offer health coaches compared with 44% in 2007. The number of weight management programs is also on the rise, offered by 52% of companies, up from 42% in 2007. Health risk appraisals are offered by 80% of companies, up from 72% in 2007.

"I'm not surprised. This is consistent with the trends we've been seeing over the last couple of years as we do this survey," says Scott Keyes, senior group and healthcare consultant for Watson Wyatt. "The cost of healthcare continues to become so high. People are looking at long-term solutions. We realize that one long-term solution is to keep our population healthier. You are not seeing people pull away from that."

Keyes says there's a reason why a growing number of employers are offering financial incentives for wellness programs: They work. The survey found that even moderate incentives can help engage employees in healthy behaviors. Financial incentives between $51 and $100 can boost participation in smoking cessation and weight management programs and encourage workers to get biometric screenings. Higher participation in health risk appraisals is associated with incentives greater than $100. However, financial incentives have limited impact on participation in disease management programs.

Although 80% of companies offered health risk appraisals, Keyes says participation varied greatly because only 61% of employers offered financial incentives. "Financial incentives really increase the participation from single digits to up to 50% to 80%," he says.

Health-risk appraisals can be done online, where questions are asked about health habits, diet and exercise, and most importantly, biometric information like blood pressure, blood sugar, and cholesterol. "The biometric information is very important to the point where some employers are saying if you don't provide the biometrics we won't provide the financial incentives," Keyes says.

He says the financial incentives are most commonly reimbursed through gift cards and reduced health insurance premiums.

Companies that offer financial incentives report significantly higher participation in lifestyle management and wellness programs, according to the survey. However, employee participation in some wellness programs remains low. Despite the obesity epidemic, 40% of companies report that less than 5% of their workers participate in weight management programs.

Other programs that frequently offer incentives to encourage use include those for smoking cessation (offered by 40% of employers in both 2008 and 2009), weight management (offered by 34% of employers, up from 31% in 2008) and full coverage of preventive services (offered by 73%, up from 53% last year). Keyes says a growing number of companies are expanding their free or reduced-cost screenings to include pap smears, mammograms, and colonoscopies.

Keyes says there's conflicting data that can't clearly demonstrate the cost effectiveness of wellness programs. Nor is there anything to definitively demonstrate that they positively impact employee recruiting and retention. "It's still a new area. It could be a few years until we have some good longitudinal studies," he says. "But the employees like that these are available, so it certainly won't hurt."

To view the 14th annual NBGH/Watson Wyatt report, visit www.watsonwyatt.com.