By Stephanie N. Mehta
October 26, 2009

Insurance alone doesn’t make for a healthier America

By Sean Forbes, president, Virgin HealthMiles

When was the last time your health insurance provider sent you a thank you note?  As a relatively healthy man who rarely requires a doctor’s care, I’m not rewarded by our nation’s health care system for the good health choices I make that help keep me out of the hospital.

While the President and Congress debate the mechanics of health care reform, somewhere in the legislative process the notion of “prevention” has taken a back seat.  Health insurance today suffers from a disconnect of cause and effect.  For example, in the auto insurance market, if I’m caught speeding or driving recklessly, my premiums go up. If I observe the rules of the road, I get a safe driver discount. Yet if I make smart exercise and diet choices that help me avoid obesity, there’s no reward for doing the right thing.

As health care costs escalate, one economic principle helps explain a key driver of those increases:  Consumers don’t use wisely the things they don’t pay for directly.  It may take some time to clear up the confusion created by having a middle man between doctors and patients, but there’s an effective way to impact significant cost drivers now:  Prevention.

Health is not a matter of luck, but rather smart choices.  Over 75%, or $1.5 trillion, of our nation’s health care costs come from
chronic diseases – the majority of which are driven by personal health behaviors such as inactivity, smoking, and poor diet.

Companies can’t afford to wait for a federal bailout.  They’re already absorbing 70-80% of these health care cost increases, according to the Kaiser Family Foundation, and the bill continues to go up at nearly 10% per anum.  Instead, forward-thinking companies are taking matters into their own hands.  They’re starting in the workplace by rewarding employees who become or stay healthy, using a mix of technology and cash incentives.

Ochsner Health System, a non-profit health care system located throughout Louisiana is an example of such a company. The company of 10,000 employees kicked off a physical activity-based wellness program where employees could earn up to $300 annually in cash rewards for increasing and tracking their physical activity.

Ochsner also offered employees  the opportunity to earn significant discounts off their 2010 health insurance premiums when they reached activity milestones reinforcing the Centers for Disease Control and Prevention’s (CDC) recommended activity levels. The company was blown away by employee participation. With the combined premium and cash incentives, Ochsner’s employee participation rate jumped to 80% of all eligible employees who have enrolled since the program’s roll out.  Within just a few months, 30% of these employees have increased their activity and have qualified for premium discounts.  The company is now tracking its wellness efforts and more effectively containing healthcare costs year over year.

Competing to stay fit

In these companies, pedometers and heart rate monitors are as commonplace as BlackBerrys and iPhones.  Companies have also found online social networks in the workplace fuel healthier, fitter communities, and make the process of healthy behavior change more enjoyable.  Many employees of all ages, weight and health conditions, have formed groups with various colleagues, departments, and office locations, and challenge each other to rack up as many steps as possible and compete with each other to stay fit.

NW Natural, a Portland, Ore.-based utility company held an “Executives vs. Employees” online challenge for one week in  July to encourage its 1,000 employees and executives to use pedometers  and social networking to increase and track their daily activity. Sixty five percent of NW Natural’s employees joined in, and the executives won the challenge.

NW Natural’s senior vice president of human resources, Lea Anne Doolittle, described how these online competitions can keep wellness programs fresh and employees engaged.  She said, “It’s like betting on a baseball game. Everyone can participate. You can make up fun names for teams, have online chats, and encourage each other. It makes for a better work community.”

Grassroots efforts like these contribute to a greater goal. For employees, it means lower weight, blood pressure, and body mass indexes (BMI).  For companies, healthier employees mean fewer health care claims, increased employee productivity, and nearly six to one returns on dollars invested.

At the federal level, these technological and grassroots innovations around health incentives and social networks can potentially side step the hurdles that have hamstrung eight of the last 10 administrations’ attempts at a comprehensive health care overhaul.  Creative prevention efforts in the private-sector, supported by technology and incentives, are already keeping some companies ahead of the inactivity and obesity epidemic.  They also demonstrate proof of performance with validated data.

Such programs can even be funded through higher health care premiums paid by those employees who do not positively change their behaviors and cost more in the long run. This funding mechanism allows employers to take proactive steps toward reducing chronic medical bills at a net-zero impact to their income statements.  Said another way, these programs can be rolled out with no additional cost to the corporation, or even at the federal level using tax incentives for the healthy with zero contribution to our budget deficits.

The beauty of prevention in the workplace is that it doesn’t have to be expensive or complex.  Rather, it’s a matter of giving people the technology, information, and motivation they need to make long-term healthy behavior changes.  And for hundreds of companies, rewarding employees for healthy behaviors is working.  The model is in place today for hundreds of thousands employees not just in companies, but also state and county government organizations.  And, those groups are reporting unprecedented levels of employee engagement, increased activity levels, and reduced BMI levels amongst previously obese and overweight employees.

As Congress deliberates, I hope they don’t lose sight of the fact that
health insurance does not in itself make for a healthier America.  We’ve reached a tipping point where, as a country, we need to re-establish incentive linkages between cost mitigating personal preventative health behaviors, and the premiums we pay for downstream care.  The technology exists today to provide the visibility between short term cause and long term health effects.  And, many are already demonstrating the foresight to use it.

Forbes is president of Virgin HealthMiles, provider of incentive-based employee health programs and technology that help organizations build healthier workplaces. The company is part of Sir Richard Branson’s Virgin Group.

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