There’s a simple calculation at the heart of many firms’ health benefits strategies.
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Get employees to eat better + exercise more = Our health care spending goes down
It’s an alluring idea, experts note. Having people take personal responsibility for their day-to-day self-care decisions now could prevent higher costs later.
The concept is so promising that the Affordable Care Act further incents employers to encourage their workers to be healthier.
But some advocates say that firms shouldn’t be playing a role in their workers’ health care decisions.
And even if wellness programs are well-intentioned, the evidence is mixed on a crucial point: The programs might not work.
Controversy Over CVS a Microcosm of Broader Debate
Employer wellness programs received national attention last week, following a firestorm over CVS Caremark’s plan to encourage its workers to undergo health screenings.
Under CVS’ plan, employees would be required to provide their weight, cholesterol levels and other personal information for health insurance purposes — or pay a $50 monthly fee. CVS would pay for the screenings.
The company stressed that the data would be housed with WebMD and that it would not be able to access employees’ health records. The health screenings were intended to inform employees about their health risks and encourage personal responsibility, a CVS spokesperson said.
But some consumer and privacy advocates were still outraged. “This is about as coercive and blunt as I’ve ever seen,” according to Deborah Peel, founder of the not-for-profit Patient Privacy Rights.
And similar programs produce similar scorn. “Interesting idea, but typically wrongly executed,” one California Healthline reader wrote, discussing another company’s push for wellness screenings. “I think it should be illegal to force people to share data with an insecure [third] party.”
Most Major Companies Already Engage in Wellness
There’s one oddity about the debate over CVS: At this point, most companies offer wellness programs. The firm’s incentive plan, as Greg Juhn writes at The Health Care Blog, isn’t so unusual.
A survey of 800 large and midsize employers conducted by Aon Hewitt and released this week found that 79% of companies offer rewards, including lower insurance premiums, to persuade workers to play a larger role in managing their health. About 58% of companies in California offer wellness programs for their workers, the Society for Human Resources Management found last year.
There’s clear evidence that healthier workers make for a less-expensive health care bill. One recent study found that obesity can lead to $1,700 in additional per-person health spending per year.
And the plans are on sound legal footing. An appeals judge ruled last year that a Florida county’s wellness plan for its employees fell under the Americans with Disabilities Act’s safe harbor provision, which allows employers to administer “the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering risks based on or consistent with state law.” The wellness screening constituted “a term” of the benefit plan, the judge found.
But what makes CVS’ plan so eye-catching is its seeming infringement on privacy, and the associated penalty for choosing not to participate. Only 18% of firms currently require workers to undergo health risk assessments, according to a 2012Â Kaiser Family Foundation report. And most of these programs still rely on carrots, not a stick, to motivate workers; just 5% of companies that incent wellness participation also use penalties, Bruce Japsen writes at Forbes.
Regardless, more wellness plans — and plans that include more penalties — will be coming. Under the Affordable Care Act, employers can use up to 30% of a worker’s health care premiums on wellness programs beginning in 2014, up from 20%. And more companies are signaling that they will begin offering rewards for hitting certain outcomes, like lowering cholesterol or reducing waist size.
Drawbacks to Wellness Concept
But there’s little evidence that the excitement over wellness is justified. A recent issue of Health Affairs included study after study that essentially concluded the programs didn’t really cut costs.
In one study, researchers examined the financial impact of a wellness program implemented in 2005 by a St. Louis-based health care system that linked lifestyle health care choices to insurance discounts. Their finding: No real cost savings.
In another study, researchers concluded that wellness programs could achieve savings only by shifting costs to unhealthy workers.
“Laudable as these programs are,” Health Affairs editor Susan Dentzer wrote, “It’s tough to escape the conclusion that they are up against so many more powerful social and economic forces that they’re roughly akin to the image of the little Dutch boy holding back the sea with his finger in a dike.”
Weekly Roundup
What else is happening around the nation? Here’s a quick look.
How a Romney administration would’ve killed Obamacare:
Writing in National Affairs, Tevi Troy — a senior health adviser to the Romney campaign — explains how a Republican administration would have stopped Obamacare in its tracks: using agency powers to “effectively nullify” the ACA, forcing Senate Democrats to strike a deal and possibly repeal the law.
Arkansas and Ohio: Project Millennial takes another look at the Medicaid deal that HHS struck with Arkansas, examining possible scenarios for implementation and legality. And as Adrianna McIntyre and Karan Chhabra note, “we know from emails obtained under FOIA … that Ohio has been in similar private-option negotiations with HHS.”
Mississippi: State Democrats are playing hardball over the ACA’s Medicaid expansion, Dylan Scott writes in Governing. If the Legislature refuses to debate the health law’s Medicaid expansion, they’ll refuse to reauthorize the entire Medicaid program.