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(HealthNewsDigest.com) – Wellness programs are gaining traction as a way to rein in health care costs. If they are to succeed, however, they need to be designed effectively. Too many programs provide a weak return on investment because they are offered only to fill a check box that a program exists. The existence of a wellness program offers no guarantee of results. To achieve real results and ROI, the program must do more than screen and educate; it must motivate people to change their behavior.
In the United States, 80 percent of health care dollars and 70 percent of deaths stem from the same chronic conditions. Most of these can be prevented by following simple guidelines like refraining from smoking, eating healthy foods and exercising regularly. Yet, Americans continue to make unhealthy choices. Whether it’s daily soft drinks, regular junk food or the comfortable couch, bad habits are hard to break. Consequently, diabetes and obesity have reached epidemic proportions.
The United States spends approximately $2.5 trillion, or 17.6 percent of the gross domestic product, on healthcare expenditures. By 2018, experts expect these expenditures to reach $4.4 trillion—more than double 2007 spending—continuing a disturbing trend to our nation’s ability to compete globally. And when General Motors reports spending more on health insurance than on steel, it should make us all pause and ask if we want all of our businesses, no matter what industry, to be in the business of providing health care.
There has never been a more pressing need for widespread behavioral change.
Learning from the Automotive Insurance Industry
For an effective behavioral change model, we need only look at the auto insurance industry. Imagine everyone paid the same for car insurance regardless of their driving record. Would that be fair? Does it make sense for your car insurance to increase if Joe Smith decides to speed down a busy street while texting and eating a sandwich? Overwhelming evidence shows that Joe’s unwise choices make him more likely to cause an accident. Doesn’t it make more sense to charge Joe a rate based on his driving behavior?
Absolutely. In fact, the auto insurance industry has done this for years. Car insurance rates are based on your driving history. Multiple tickets or accidents indicate unwise choices that put people at higher risk. As a society we accept these higher premiums. We adjust rates in the auto insurance, life insurance and homeowners insurance industries based on prevention and proactivity; and no one raises an eyebrow.
Yet, when it comes to health insurance, personal choices do not seem to matter. We just accept that rates will go up universally—131 percent since 1999 according to the 2009 Employer Health Benefits Survey by the Kaiser Family Foundation. While health insurance cannot be simplified to the point of parity with other insurance categories, we can learn important lessons from auto insurance.
Providing Ways to Earn Lower Rates
The auto industry has long understood the solution to driver safety is two-fold: premium differentials and earned discounts. Got a squeaky clean driving record? Discount. Use seatbelts regularly? Discount. Discounts even apply for anti-lock brakes, air bags and day time running lights. Why? Because this equipment reduces accidents and increases driver safety. The auto industry goes even further, offering defensive driving and driver’s education discounts. If someone makes the effort to learn how to drive more carefully, over time that education will lower the chances of bad outcomes. The industry does not wait to see if the education actually impacts the driving record; it assumes in good faith that this education will improve the individual driving behavior.
The health insurance industry employs some rating strategies based on individual profiles. Unfortunately, these are based mostly on illness or expected healthcare utilization. Often they charge high rates for people with chronic conditions without taking a vested interest in people’s health or providing the education, tools and guidance to manage these conditions. The auto industry provided an opportunity for Joe to earn discounts if he became proactive. The health insurance industry should do the same when an individual becomes proactive with his or her health.
The Time for Action is Now
Now is the time for employers and others to promote and support lifestyle based premium discount strategies for health insurance. Employers need to insist that insurance companies provide discounts to people who place prevention at the forefront, making wise choices towards their health and proving it through clear-cut measures. In fact, this movement should be one of the central themes of health care reform. One of the best ways to reverse the trend of chronic diseases in the country is to develop a model that links an individual’s behavior to the discount he or she receives on an insurance rate. Only when unhealthy behaviors start hitting us directly in our pocketbooks will we take notice and begin to stop smoking and maintain healthier weights. Disciplining ourselves to understand our habits, learn best strategies and take care of our bodies—just like we would take care of the car we drive through an oil change or tire rotation—needs to become a societal norm. With the workplace a central part of many people’s lives, employers can play a crucial role in creating a national prevention movement. Our nation’s employers can move in the right direction by working with health insurance companies to promote a paradigm shift from reactive to proactive health care.
How Employers Can Lead the Way
While employers wait for industry-wide reform, they can follow the auto insurance example by linking premium discounts for their portion of health insurance to regular health education and good health choices by employees. Enrollment in educational programs, such as smoking cessation or nutrition classes, and participation in healthy physical activities should provide discounts on health insurance. Likewise, outcomes, as measured through biometrics, need to provide further discounts. This does not refer to health conditions, which are outside of an individual’s immediate control, but to the lifestyle choices and the direct outcomes of those choices (Body Mass Index (BMI), Lipids, Glucose, Blood Pressure and Tobacco use). If we just concentrate on BMI and tobacco use on the assessment side, and provide the lab values as a personal gauge, we can make a real difference in engaging the individual. And all this can be done by creating a proactivity metric that accommodates people with chronic conditions by providing modified parameters based on reasonable expectations for different risk categories. With smoking rates on the decline from even a few decades ago, we know that well structured policies – though seemingly unpalatable initially — can make a real difference.
Redefining Health Insurance Delivery – A Much Needed Paradigm Shift
A properly designed worksite wellness program helps fill the gaps in our health care system. However, these incentives must also satisfy important legal criteria. For example, a premium discount cannot exceed 20 percent of the total cost of single coverage or, if spouses or dependents are included, 20 percent of the total cost of family coverage. This 20 percent limit includes both the employer and employee share of premiums.
Similarly, employers must follow HIPPA and GINA guidelines to ensure no personally identifiable health information is shared and premiums are not based on genetic information. Basing the premium discount on metrics that rate people based on their behavior rather than on factors outside their direct control, such as genetics and chronic conditions, can help address these important concerns. Additionally, by having an independent entity—one that isn’t directly affiliated with the employer or the health insurance company—provide these services further helps build a trustworthy and lasting relationship with members, leading to higher participation and better outcomes.
The auto insurance industry provides a viable blueprint for moving in the direction of real change. To customize premiums to the lifestyle behaviors of individuals rather than blanketing everyone with a high rate just makes sense. Providing real health insurance discounts for people who adopt behaviors that lower risks and produce better outcomes must become the norm for health insurance. Otherwise, wellness will mean no more than checking another check box and throwing our money—and our economy—into a large black hole that gets bigger and bigger as each year passes.
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