Interestingly, we've seen a significant acceleration of interest and adoption of health incentives, almost as if many employers are "taking reform into their own hands" rather than waiting and hoping for others to address the issues. Mercer's 2009 survey indicates about 3 of 4 large health plan sponsors (more than 500 employees) offer health assessments, disease management programs and nurse lines, and about 1 of 4 large plan sponsors are offering incentives to encourage engagement. For jumbo employers with over 20,000 employees, these numbers grow significantly, with 9 of 10 offering the programs and over 1/2 using incentives. Broader incentives through use of account-based plans also continues to grow with 1 in 5 large employers offering a CDHP and 1 in 10 employees enrolled in the plans. Nearly 1/2 of Jumbo employers offer a CDHP.

These primary tactics are being blended into effective strategies to create sustainable high performing health benefit offerings, with employers of asking their workforce to become more involved and informed through consumerism efforts and then surrounding that with robust Total Health Management programs that support and engage participants to maintain, improve and maximize their health. 2010 rollouts and the multi-year strategies being developed for the next 3-5 years beyond show a continued strong future move towards sophisticated, multifaceted efforts around meaningful, active health engagement, with incentives for healthy behaviors and results as a central theme.
 

Overall, the recession seems to have made clients much more interested in scrutinizing the cost effectiveness of health management programs. For example, clients are questioning whether they have been getting disease management services that they deserve based on how much they have been paying based on a PEPM basis. They began to see how "much" they have been paying per participant due to very low participation and engagement rates. Keenan foresaw this trend and proactively negotiated and partnered with Nurtur, DM service provider, to bring DM programs with a per participation based payment mechanism. Clients seem to appreciate the fact that they would be paying for what their members receive.

More specific to the impact on incentives: Incentives used to be given for those who complete health risk assessments. In most cases, there was no way of evaluating whether the completion of HRA has had any impact on participants' lifestyle. Incentives used to be given even to those who just submitted their responses and never read the results. An increasing number of clients began to wish to use incentives more effectively in reducing avoidable health care utilization, promoting appropriate use of preventive care, and engaging participants in behavior change programs. Included are incentives for satisfaction of certain biometric values, completion of discussion with their primary care physicians on their screening needs, and completion of certain number of coaching sessions. This trend of using incentives for outcomes and behaviors that are more closely related to the medical care cost savings and productivity enhancement seems to continue.
 

Even in tight times, employers will continue to encourage healthy behaviors with financial incentives and other initiatives.

However, there are challenges to changing employee behavior that extend beyond budget constraints and employer-sponsored programs. Inspiring workers to be actively involved in their own health remains an uphill battle for most companies.
 

The recession has put increased pressures on all spending and consequently a demand for higher accountability related to the performance of our health management programs. At the same time, the lack of confidence that this round of health reform will materially improve the underlying healthcare cost issues is accelerating employer demand for any programs that can demonstrably help bend the healthcare cost curve.
 

The funny thing about the current reform discussion in DC is how little impact it actually seems to be having on real-world employee benefits. Employers are continuing to look at solutions like wellness, prevention and Disease Management with even more interest than before the recession. We expected to see a shift away from incentives towards more of a penalty approach but so far this does not seem to be happening. We are seeing more interest in value-based design, which essentially ties the incentives to real evidence based care, as well as a requirement to provide evidence of completion of specific programs, rather than the more simple reward for completing, say, a health risk assessment. It would be unfortunate, to say the least, if the reform being proposed in DC limits employer flexibility to design programs that meet employees’ needs.
 

While there is a wait and see attitude with regards to healthcare reform and the final stages it is going to take, the employer market is still very keen on wellness initiatives. The employers are looking for ways to measure and hold the vendors accountable for their programs, either with increased scrutiny on reporting, performance guarantees and ROI measurement.

With the flux in the healthcare related to the reforms, employers are looking more closely at which programs to put into place. Also, the vendor landscape is changing with some of the independent vendors joining forces with each other or the carriers, making the market more consistent with delivery and measurement.