Consumerism is about empowering individuals with information and a financial stake in their own health and healthcare. Unfortunately, ObamaCare move away from personal responsibility. ObamaCare is about limited choices, mandated coverages, regulated prices, and controlling individual decision-making. But, ObamaCare cannot shut out the forces of consumerism. Buried in the dark clouds of ObamaCare is the opening for consumerism to survive.

A key feature of healthcare consumerism is providing individuals with opportunities to be financially rewarded for doing the right activities that improve their health. Rewards can include activities such as, participation in a wellness assessment, attending a smoking cessation class, compliance with a condition management program (e.g. taking medications, diet, exercise, office visits), and maintenance of good health characteristics (e.g. blood pressure, cholesterol, nicotine use, body mass index).

ObamaCare allows both participation incentives and limited rewards based on specific health status outcomes. The new law increases the maximum for rewards based on health status from 20% to 30%. The act allows the Secretary of Health & Human Services to potentially increase the health status rewards to 50% of coverage costs. Financial rewards are critical to changing behaviors. If just being healthy was good enough, we would not have growing diabetes and an epidemic of obesity in this country. We are typically American. We want to be paid to do the right things. We want financial incentives and rewards. ObamaCare allows some current market initiatives to continue to include financial incentives and rewards.

Rewards and incentives can take on many forms. The chart below describes several options employers can use to engage employees in healthy choices. Both positive and negative rewards and incentives are possible. Existing rules should allow a combination of rewards and penalties to exist within the same structure as long as the difference between the best and worst financial impact is within the ObamaCare allowances.

Under Obamacare the major areas of differentiation in employment compensation packages will be provisions for rewards, incentives, and information to support healthy productive employees. Employers will always be concerned about their “human capital.” High functioning employees lower the costs of unscheduled sick days, absenteeism, disabilities, workers compensation claims, and improve productivity.. Here are typical options that employers can still use under ObamaCare:

Click here to see the full article and chart.

Within these general areas, there are at least five ways to implement financial incentives:

1. Change the Premium - this allows both the employee and the employer to share any savings based upon the split in how each contributes to the overall cost of the plan.
2. Change the Employee Contribution Rate - this allows greater flexibility to award employees more or less that would occur by using the “change in premium” approach.
3. Change Deductible - increase or decrease the plan deductible based upon compliance standards set in the plan.
4. Change Cost-sharing - this would expand on the “change deductible” approach and impact any combination of deductible, coinsurance, maximum out of pocket costs, and copayments.
5. Change Personal Care Accounts - this would allow direct increases to health savings accounts (HSAs) or health reimbursement arrangements (HRAs). ObamaCare does limit some financial incentive options for individuals, small groups, and large group plans offered through the government exchanges if they directly impact premiums for employees. The law states:

“With respect to the premium rate charged by a health insurance issuer for health insurance coverage offered in the individual or small group market-

(A) such rate shall vary with respect to the particular plan or coverage involved only by-

(i) whether such plan or coverage covers an individual or family;
(ii) rating area,
(iii) age, except that such rate shall not vary by more than 3 to 1 for; and (iv) tobacco use, except that such rate shall not vary by more than 1.5 to 1; and

(B) such rate shall not vary with respect to the particular plan or coverage involved by any other factor not (above).”

Small employers are defined as groups with 100 or fewer employees, or 50 or fewer at the discretion of the states.

For those plans that can use the full capabilities of rewards and incentives, these areas of emphasis are likely to grow and expand as employers continue to seek ways of controlling health costs and improving productivity. A healthy employee is a more productive employee.

A survey of employers by Towers Watson showed that 22% of employers provide financial incentives using bio-metric screenings (e.g. blood pressure, cholesterol, body mass index) and wellness appraisals. An additional 19% of large employers are moving in that direction. While only 3-4% of employers currently provide financial incentives based on meeting bio-metric standards, results oriented incentives are considered the next generation of consumerism to motivate broad plan membership engagement in healthy choices.

There are many companies developing the technology and compliance standards to assist employers. One such company offering the technology to monitor and administer reward programs based on bio-metrics is Bravo Wellness. Forbes magazine highlighted Towlift, Inc., which selected Bravo Wellness’ incentive-based integrated wellness program. After four years of this strategy, Towlift has experienced a reduction of 26% in per capita claims cost and steady improvement in employee heath measures.

Employers can experience immediate cost savings by linking employee incentives to participation and results. There are obviously some rules to follow. When an incentive or penalty is contingent upon the satisfaction of a health standard, it must:

• Be designed to promote health and wellness
• Not exceed 20% (30% under PPACA) of the total cost of coverage offered
• Be available to all “similarly situated individuals”
• Offer an appeals process
• Provide “reasonable alternatives” when appropriate
• Offer re assessments at least once per year

Employers need to be cautious and flexible during these times of uncertainty. Do what is needed and what has been proven to work anyway. Consumerism with rewards and incentives has proven itself over the last eight years to lower costs and improve quality of care. The American Academy of Actuaries reports that healthcare consumerism lowers costs in the first year by 12-20% and reduces future trend increases by 3-5%.

Changes based on healthcare consumerism won’t have to be reversed even if ObamaCare is successfully challenged in court, a different Congress limits ObamaCare implementation, or a new Administration changes the regulatory rules. If it is consumerism versus ObamaCare, consumerism will win in the end. It’s an American health reform idea that will not be defeated.

CLEVELAND–(EON: Enhanced Online News)–Towlift, Inc., a leader in providing material handling solutions, has selected Stratum Benefit Solutions and Bravo Wellness to take it into its fourth year of incentive-based, integrated wellness. Towlift has benefited from several years of reduced claim costs in its self funded health care plan and has lead the way in its industry in addressing health care for employees as a risk management challenge and not a pricing issue. After four years of this strategy, Towlift has experienced a reduction of 26% in per capita claims cost and steady improvement in employee heath measures.

“The results-oriented culture at Towlift is a perfect fit for a Bravo Wellness program”

David Cannon, Towlift’s CEO and President, credits a strategy presented by Joe Ceccacci, Managing Partner, Stratum Benefit Solutions, Corporate Health IQ™ and Jim Pshock, President, Bravo Wellness. Dave Cannon notes, “… year after year we were extremely frustrated with the increasing cost of healthcare. So, we decided to be proactive and engage our employees in a plan to tackle this problem head-on. We had to start by educating our workforce on how lifestyle choices including diet, smoking and exercise, directly affect the cost of healthcare. Joe Ceccacci introduced Towlift to innovative risk management strategies that included yearly wellness screenings and a wellness educational campaign that includes smoking cessation programs, exercise incentives, and instructional videos and literature. With the support provided by our HR team, our employees have gained enthusiasm for the program with grassroots wellness committees forming in individual departments to help fellow employees with their fitness goals. The program has empowered employees to be part of the solution to more manageable health care costs.”

Working together, Towlift, Stratum Benefits and Bravo Wellness, continue to look for ways to improve their program and will be following recommendations from Stratum Benefit Solutions regarding outcomes from this year’s, Corporate Health IQ™, a 360-degree risk assessment tool. “The results-oriented culture at Towlift is a perfect fit for a Bravo Wellness program,” adds Jim Pshock. “In the Towlift model, employees can reduce their health plan deductible from $2,100 to as low as $100 by achieving goals tied to blood pressure, cholesterol, and obesity; and by not using tobacco or nicotine products.”

Towlift, Inc., is headquartered in Cleveland, OH and has other locations in Columbus, Mentor and Toledo. Ohio is a leader in material handling solutions. Contact David Bongorno for further information at Dbongorno@towlift.com.

Stratum Benefit Solutions is an innovator of integrated and incentive based insurance solutions for mid to large sized companies. Corporate Health IQ™ is a proprietary risk management model of Stratum Group, LLC, providing employers with precise information and insight into the unique risks driving their healthcare expenses. Stratum Benefit Solutions, LLC, is located in Independence, Ohio. For more information, visit www.stratumbenefits.com.

Bravo Wellness offers services to employers and business partners desiring results-based incentives for wellness. Customers experience immediate cost savings by linking employee incentives to participation and results. Bravo Wellness recognized the potential legal challenges of health insurance law, including HIPAA non-discrimination regulations, and has unique expertise in the practical application of wellness regulations for group health plans. Bravo Wellness is headquartered in Avon, Ohio. For more information visit www.bravowell.com.

http://www.corporatewellnessmagazine.com/article-detail.php?issue=Issue%205&article=carrots-and-sticks?-how-about-personal-accountability!

Jim Pshock, President of Bravo Wellness

Dec 9, 2009

Over and over I hear the analogies of our trade, “It’s easier to attract bees with honey,” “You can lead a horse to water but you can’t make him drink” or “It’s better to motivate change with carrots than to punish a lack of progress with a stick.” Passionate wellness team members at numerous organizations desperately try to motivate employees who more often than not, simply don’t care. Perhaps they care, but just not enough to change behaviors.

Many employers already pay in excess of $6000 per employee per year for health benefits and it is growing. Too often, rather than appreciation – many employees are indignant, feeling that even the slightest increase in their payroll contribution, co-pays or deductibles are unfair. Employees feel like victims of the benefit plan rather than the beneficiaries. Do they have any idea that they are the only ones really capable of reducing the cost? It is widely accepted that 70 – 80% of all healthcare spending is spent treating conditions that are lifestyle driven and largely preventable. Employers who ignore this and continue to offer “one size fits all” health benefits are the real victims.

I recently attended an annual employee benefits meeting where a company introduced their annual plan changes. They used a different approach this year, no cost increases but your plan deductible was going to be tied to your lifestyle choices. Their $1250 deductible could be reduced to only $250 if they maintained cholesterol below 200, blood pressure below 140/90, body mass index below 30 and were a non-smoker ($250 per category). One employee, offended by the concept, stated “Is that the best you can do? It’s none of your business whether or not I smoke.” The company president quickly replied: “I’m not telling you that you cannot smoke. I’m telling all of your co-workers that they no longer have to pay for it!” – The room erupted in applause. A rapidly growing number of American workers are ready for this concept.

Employee lifestyle choices most certainly are an employer’s business. Health benefits are often the second highest expense on an organizations balance sheet! Suppose that your company provided group auto insurance instead of group health insurance. If you had a few employees who had five at-fault accidents each year, a DUI and several speeding tickets and that caused the rates for the entire company to go up 30% each year, the good drivers would be infuriated. They would demand a discount and they would demand that those responsible for the increase bear more of the cost. Health plans are really not that different.

Have you ever listened to the chatter that occurs before employee benefit meetings? “What are they going to do to us this year?” or “Here we go again, no raises and higher benefits cost.” Finally, employers are starting to respond with, “What have you done for yourself this year? Lose weight? Quit smoking? Get your diabetes under control? If the answer is “yes” you may not see an increase at all.” Reward those who never smoked and don’t need to lose weight with the best plan and/or lowest cost of all. After all, the only ones who can control costs are the ones who can avoid claims by making healthier choices. Even employees who don’t personally like this message rarely say that they think it’s unfair.

In this current age of entitlements, laziness and “victims” expecting a bail out because of their poor choices there are indeed glimmers of hope and success stories from those who have instead chosen to take personal responsibility and show some grit determination. Individuals who have maintained a high credit score can find unparalleled deals in this economy. Banks that didn’t cave into the sub-prime mortgage lending pressures are enjoying stability and strong reputations that can fuel growth. The only Detroit auto-maker to refuse a bail out is the only one now posting a profit! Well done Ford! History has taught us that doing for others what they can and should do for themselves never produces lasting success. This applies directly to your wellness plan as well.

Yes, many people need help. Yes, there are special circumstances that warrant intervention and exceptions. We need more coaching, more outreach, encouragement and support programs, but at the core of all of these initiatives is personal accountability. Employers should not feel guilty for expecting individuals to be a part of the solution or accept the consequences. This happens in performance reviews every day.

I recently presented to a group of about 50 insurance brokers. Following the meeting, dinner was served. And then – the largest piece of cheesecake I ever saw was placed before me. Those at my table jeered “Oh, the wellness guy can’t eat that!” and they watched to see what I’d do. I explained that my company doesn’t tell anyone what they can or cannot eat. The crux of our message is that if I choose to eat that cheesecake and I do nothing to burn the fat and calories off – my co-workers shouldn’t have to pay for it. The bell finally rang! They understood what results-based wellness incentives were all about.

If you are training an animal, you know that rewarding desired behavior causes repeat behavior. It also creates an expectation of a bonus “reward” for doing what they should be doing anyway. Remove the reward and the behavior usually stops. If instead you beat an animal into submission with a stick, you will see behavior change but you will often also see a broken spirit and resentment. The good news about your wellness program is that you don’t need a carrot or a stick. With adult human beings, try communicating the problem, suggesting solutions, listening to feedback, soliciting alternative ideas that accomplish the same goal and executing a strategy. Seek understanding, not consensus (and certainly not a unanimous decision). Tying employee costs to their healthy choices actually works.

Every organization is a little different and cultures must be respected, but the cultures can also change. Given a chance to be a part of the solution and an expectation to make meaningful lifestyle changes, many employees will rise to the occasion and surprise the skeptics.

Healthier lifestyle = lower Lovelace insurance premiums

New Mexico Business Weekly - by Dennis Domrzalski NMBW Staff

Lovelace Health Plan thinks it has a way to keep New Mexicans healthy: Money, as in the form of lower health insurance premiums.

The Albuquerque insurer has rolled out a new premium-based wellness program that will offer members lower premiums if they meet certain healthy lifestyle goals.

Lovelace is partnering with the Ohio-based Bravo Wellness to offer the program, which will set wellness targets for cholesterol levels, blood pressure, body mass index, tobacco use and glucose levels.

People whose ratings fall within so-called healthy ranges for those areas will be given premium reductions.

Lovelace Health System, which owns the health insurance plan, is testing the program on its 3,600 employees in New Mexico. The way it’s designed, employees could be in line for premium reductions of up to $160 a month, said Marlene Baca, vice president and chief sales and service officer for Lovelace Health Plan.

The plan differs from current wellness programs in that it offers a direct financial incentive to people who maintain healthy lifestyles.

“This offers some accountability, and when we think about health care costs and reform, we feel strongly that this needs to be focused on,” Baca said.

The plan’s concept is simple. Lovelace will work with employer groups and Bravo Wellness to set target levels for the areas that have been selected for testing. Blood work will be done and the results will be sent to Bravo. That blood work is generally done at the beginning of an enrollment period. Based on the results, individual premiums can be raised or lowered. The blood work results are confidential and can’t be shared with the employer.

Employees who don’t qualify for those target rates can appeal the decision. Or they can work to get those levels in line with healthy guidelines by working with their physicians and using Lovelace Health Plan’s Healthy Steps program, which provides services ranging from nutritional counseling and smoking cessation to disease management. Employees can be retested every year or as often as their employer allows.

“As health care costs continue to rise, employers can realize tremendous return on investment by providing financial incentives for employees to take control of their own health,” said Lovelace Health Plan CEO Dennis Wilson. “We are committed to this program and believe in its effectiveness, which is why we are offering this benefit to all Lovelace Health System employees.”

The program, which can also penalize people in the form of higher premiums, was made possible by new federal regulations approved at the end of 2007 by the U.S. Department of Labor, said Bravo President Jim Pshock.

“Being able to penalize or reward people based on the results of wellness screening became illegal when Congress passed HIPAA (Health Insurance Portability and Accountability Act), and that was because of uniform coverage rules,” Pshock said.

The new rules take into account the reality of health care in the U.S., Pshock added.

“The Centers for Disease Control estimates that 75 percent of all health care coverage is lifestyle-related. We call this program the Good Driver Discount for Health Care. If you are doing a lot to stay healthy, then you are going to pay less than the person who is not managing those lifestyle risks.”

Bravo Wellness was founded in the fall of 2008 and has 27 employer groups in its programs, Pshock said. “They are spread throughout the nation and we’ve literally got hundreds in the pipeline.”

Pshock said more wellness incentive programs will hit the market in the coming years as employers look for ways to cut their health insurance costs and to keep offering their employees health insurance.

“We have found that with many companies, it is not enough to have wellness tools,” Pshock said. “With meaningful incentives, employees adopt lifestyles and behaviors to sustain good health.”

dfdomrzalski@bizjournals.com | 505.348.8306