May 20th, 2013
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The Equal Employment Opportunity Commission (EEOC) held a long hearing on May 8, 2013 on employer wellness programs. Opponents made a strong case that there was virtually no way that a mandatory health-contingent wellness plan could not discriminate against protected classes of workers. (See statement of Judith Lichtman) On the other hand, the more pro-business representatives argued that Congress and the Administration supported the changes in the Affordable Care Act and the programs where here to stay. It seems that all parties are urging the EEOC to provide guidances to employers.
The testimony came amid a backdrop of waiting for the final regulations from the Obama Administration. The comment period closed in January and many were expecting we would have final regulations by now. Politico reported that a group of corporate CEOs with the Business Roundtable were in Washington recently to lobby the Administration to avoid further weakening of the regulations.
Forbes magazine was reporting the CVS-Caremark was penalizing workers $600 annually if they failed to complete a health risk assessment. The article noted that most companies did not provide such stiff penalties but many were moving in that direction.
Meanwhile, several research articles provide only lukewarm support for weigh loss employer wellness programs.
A Health Affairs article by Ron Goetzel and colleagues, found only 22 % of employer health care costs could be attributed to 10 modifiable health factors (including obesity). This is actually a drop from 24.9% in 1998, even though rates of obesity have increased and costs related to obesity have gone up. Obesity contributed the most excess costs at $347 per capita. Goetzel, Pei, et al,
Another recent paper was a longitudinal study at the worker productivity in terms of absenteeism, presenteeism and job performance associated with changes in 19 modifiable well-being risks. These included physical health risks, health behavior risks, social and emotional health risks work-related risks and financial health risks. The researchers found that, “Obesity, high cholesterol, tobacco use and excessive alcohol generally contributed to productivity changes insignificantly or unfavorable, possibly because of its multicolinearity with other risks that are closely correlated.” However, they noted that, “Health-related risk explained only a portion of the total productivity variances. For example, Riedel et al found that health risks accounted for 7.8% of the total variance in productivity impairment and acknowledged that the majority of the variation was left unexplained. Lenneman et al also found only 8.5% of the variance in productivity was contributed by health risks…We found that reductions in work-related well-being risks and financial health risks significantly contributed to improvement in productivity measures especially for measures of presenteeism and job performance that were not attributable solely to the more narrow definition of physical health.” They found modest numbers of workers were able to make improvements: 25% reduced their physical health risks 26% improved their health behaviors 16% improved their social and emotional health, 31% improved their work-related risks and 13% their financial health risks. Improvements in absenteeism, decrease in presenteeism and a modest improvement in job performance accompanied such changes. They calculated these improvements were equivalent to a savings of $468 per person per year. Shi, et al.
Ted Kyle reports in his blog that one program, Healthy Blue Living, requires obese participants to wear a pedometer which uploads their physical activity to the employer wellness program. The employees must meet daily step goals if they want to keep full health benefits. Not doing so could cost them each $2000 a year. Kyle notes (and I strongly agree) that this constitutes human experimentation without the protection of the federal regulation protecting human subjects, 45 Code of Federal Regulations Part 46. In fact, the program is not that successful. Promotional material notes that only 16% who agreed got their weight under a BMI of 30.
Yet another study published in Health Affairs looked at one hospital system’s wellness program. The program provide a substantial incentive/penalty for participation in a health risk assessment (which included automated feedback) signing a health pledge, health fairs and physician referrals. The study found a significant reduction in hospitalizations for conditions related to the conditions covered by the wellness program. However, there was an increase in medication costs. Combined with the costs of the wellness program and incentives, the authors concluded, “It is unlikely that the program saved money.” Gowrisankaran G, et al. A Hospital System’s Wellness Program Linked to Health Plan Enrollment Cut Hospitalizations But Not Overall Costs, Health Affairs 32 (3) 2013; 477-485. Gowrisankaran
A second paper also published in Health Affairs reviewed randomized controlled trials of workplace wellness programs. Their review raises doubts the employees with health risk factors such as obesity and tobacco use spend more money on medical care than others. They concluded that workplace wellness programs show little evidence of saving costs through health improvements without being discriminatory. To test the assumptions of workplace wellness programs the authors, “reviewed research on the relationships among financial incentives, behavior, health status, and medical spending. We focused on randomized controlled trials involving four conditions- smoking, hypertension, high cholesterol and obesity- that are typically included in health-contingent programs. In our review, we found mixed evidence that employees with these conditions have higher health costs than other employees, which undermines the argument that employees with the conditions are particularly effective targets for incentives. We also found little evidence that working-age people change their behavior as a result of financial incentives, particularly over the long term. These findings suggest that program savings many not, in fact, derive from health improvements. Instead, they may come from making workers with health risks pay more for their health care than workers without health risks do. If true, this conclusion would jeopardize long-standing regulatory efforts, maintained in recently proposed Affordable Care Act regulations to prevent workplace wellness from being “a subterfuge for underwriting or reducing benefits based on health status. (citations omitted) Since low-income workers disproportionately suffer from conditions typically targeted by health-contingent programs, savings arising outside of health improvement may entail hidden, regressive redistributions increasing the burden imposed on low-income workers. “
In effect, they point out, wellness plans shift costs with the most vulnerable employees, those from low income groups with the most health risks probably subsidizing the healthier workers. Horwitz, JR, Kelly, BD, DiNardo, JE, Wellness Incentives in the Workplace: Cost Savings Through Cost Shifting to Unhealthy Workers, Health Affairs, 32 (3), 2013:468-476. Horwitz
The Agency for Healthcare Research and Quality (AHRQ) has issued another independent review. This time they reviewed studies of strategies to prevent weight gain in adults. The reviewers looked at 51 trials involving 555,783 subjects with at least one year of follow-up and a weight outcome. A meaningful difference between groups was considered to be 0.5 kg of weight (1.1 pound) or 1 cm of waist circumference. They found moderate evidence that workplace programs for the prevention of weight gain in adults. One study combining diet, physical activity and environmental components resulted in meaningful and statistically significant prevention of BMI change at 12 months and another that combined internet based diet and physical activity counseling resulted in significant prevention at 24 months. However, a third study found no difference. AHRQ Strategies to Prevent Weight Gain Among Adults, Comparative Effectiveness Review No. 97, AHRQ
Similar findings are reported by Gudzune and colleagues in an article published in Preventive Medicine, Gudzune K et al Strategies to prevent weight gain in workplace and college settings: A systematic review, Prev Med. 2013 Mar 22. Gudzune
April 15th, 2013
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Here is the link to a new article in Fortune/CNN Money on employer wellness programs. I was glad to contribute a quote: “The best scientists and clinicians in the world have trouble getting these conditions (Ed: obesity, diabetes, hypertension) under control. Why do we think HR can do it?”
March 5th, 2013
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A new paper in Health Affairs supports discriminatory, cost-shifting effects of employer incentive programs, especially for employees with obesity or who use tobacco.
February 28th, 2013
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National Business Group on Health has released findings from a new survey showing increases in the use of employer mandated wellness programs. The press release states:
“According to a new employer survey conducted by Fidelity Investments® and the National Business Group on Health (Business Group), corporate employers plan to spend an average of $521 per employee on wellness-based incentives within corporate health care programs. This marks an increase of 13 percent from the average of $460 reported for 2011, and is double the per employee average of $260 reported in 2009.
The survey is the latest in a series of studies Fidelity and the Business Group have conducted since 2009 to analyze the growth of health-improvement programs, or “wellness” programs, in the workplace. These programs typically consist of condition-management services (e.g., managing insulin treatments), lifestyle-management services (e.g., weight loss advice), health-risk management services (e.g., on-site flu shots), and environmental enhancements (e.g., bike racks, walking paths).
In addition to an increase in the average amount employers plan to spend on wellness incentives, the survey found that the overall use of wellness-based incentives among corporate employers continues to increase. The study found that nearly nine-out-of ten employers surveyed indicated that they currently offer wellness-based incentives (86%), an increase from 73 percent from 2011 and 57 percent from 2009.
And while the percent of corporate employers offering wellness-based incentives has increased across all markets, the survey results illustrated significant growth in the mid-market, where 77 percent of employers plan to offer wellness-based incentives in 2013, and more than double the 38 percent of mid-market employers that offered wellness-based incentives in 2010. In addition, almost half of employers in the mid-market (45%) plan to offer average incentives of more than $500 per employee.
“As the cost of providing health care continues to increase, employers recognize one of the key ways to manage their company’s costs is to incent their workforce to lead a healthier lifestyle,” said Adam Stavisky, senior vice president of Fidelity’s Benefits Consulting business, which commissioned the study with the Business Group. “Employers of all sizes have embraced wellness-based incentives to help control costs, and companies are now looking at ways to design and optimize their programs to maximize their positive impact on health for both the organization and employees.”
Employers Tying Employee Eligibility to Completion of Risk Assessment or Biometric Testing
The study also showed that 15% of employers surveyed are requiring employees to complete some sort of health activity – such as an employer-sponsored biometric screening or health risk assessment (HRA) – in order to determine their eligibility for one or all of the company’s health plans in 2013. The survey results showed that 10 percent of employers will be requiring employees to complete an HRA or risk being defaulted into a less attractive subset of the company’s health plan, while 7 percent of employers indicated failure to complete a biometric screening would result in being defaulted into a less attractive subset of their company’s health plan. In addition, 3 percent of employers indicated that failure to complete an HRA or biometric screening would result in loss of benefits for 2013.
Companies Continue to Tailor Programs to Increase Participation, Reward Behavior
This year’s survey found that an increasing number of employers are actively managing and expanding their wellness programs and offering incentives designed to increase participation and encourage positive behavior. The most popular wellness-based incentives continue to be a decrease in premiums (61%), cash or gift cards (55%) or an employer-sponsored contribution to a health savings account or similar heath care-based savings vehicle (27%).
This year a majority of employers (54%) will expand their wellness-based incentives to include dependents, up from 45 percent in 2011. And almost half (49%) will now include spouses/dependents in communications about wellness programs.
Employers are also tying wellness-based incentives to an increasing number of health-improvement activities. These include popular activities such as smoking cessation programs and discounts for gym memberships, as well as new options such as employer-sponsored fitness challenges (increasing 10 percent in 2013), and discounts for health food options in the company’s cafeteria (increasing 9 percent in 2013).
The study also found that 41 percent of employers currently include, or plan to incorporate, outcomes-based metrics as part of their incentive program – this gives both employers and employees a measurable goal that can be used to reward behavior or results in certain health categories, such as lowering cholesterol (30%) or blood pressure (29%), or reducing waist measurement (11%).
“An increasing number of employers understand how wellness programs contribute to a healthy workforce,” said Helen Darling, president and chief executive officer of the National Business Group on Health. “And it’s encouraging to see employers take the necessary steps to tailor their wellness programs in a way that will incent and motivate their employees to engage in health-improvement activities and find ways to reward them for their progress.”
Methodology
Data for the survey was collected online in October and November of 2012 by the National Business Group on Health in conjunction with Fidelity and is based on responses from a national sample of 120 companies from numerous industries including transportation, health care, technology, entertainment, consumer products, retail and energy. The sizes of the companies spanned a broad range, from less than 2,000 to more than 50,000 employees. The results of this survey may not be representative of all companies meeting the same criteria as those surveyed for this study.
Yahoo Finance notes concerns that this can decrease access to health care, which is exactly what the Affordable Care Act was meant to prevent.
Nevertheless, the Census Bureau reports a significant drop in employers who provide health insurance.
February 22nd, 2013
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CNBC reports Obama’s Wellness regulations will raise healthcare costs on employees. See report
February 20th, 2013
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NPR’s Morning Edition had two segments on employer wellness programs on February 20, 2013. The first featured Cornell economist John Cawley, whose research on the military and mothers working outside the home have been featured before.
February 14th, 2013
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A new survey finds that the American public finds the acceptable size of penalties for workplace wellness programs is much smaller than advocates for higher penalties have supported. A population-level on-line survey was fielded to 1,000 US residents. Positive incentive programs were favored by a factor of 4. The magnitude of acceptable penalty was around $50… 14 times lower than that advocated by then Safeway President Steve Burd and far above the 36 times greater than the penalty proposed by the Obama Administration. Harald Schmidt of the Center for Health Incentives and Behavioral Economics at the University of Pennsylvania, author of the study, notes, “ ‘Carrots’ were clearly preferred over ‘sticks.’ In contrast to the preferences of advocates of increasing the legal limits of incentives, there was little support of large penalties in any of the strata. Opposition was strongest among low-income groups, the overweight and the obese. The findings can suggest that where larger penalties are used, frustration and perhaps even pushback is possible. Care is required to ensure that employees do not perceive any form of incentive program merely as unfair cost-shifting, and reject the approach as a whole.”
February 7th, 2013
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There were three particularly noteworthy comments on the proposed regulations on employer wellness plans.
The U.S. Chamber of Commerce challenged the proposed regulations statement, “A health-contingent wellness program is not “reasonably designed” unless it makes available to all individuals (who do not meet the standards based on the measurement, test, or screening) a different reasonable means of qualifying for the reward.” The Chamber says that this is contrary to the Affordable Care Act provisions. They state, “Wellness programs should not be required to coddle apathetic participants as the Proposed Rule’s pursuit of an “everybody wins” approach will thwart the very motivation that a rewards based program is designed to create.” The Chamber urged that the penalties be raised to 50% for all programs, not just smoking cessation. They also called for “stacking” whereby the penalties would be additive: 50% for not meeting the smoking standard plus 30% for not meeting the other health-contingent plan biometrics or up to 80% of the cost of the worker’s health insurance premium.
Other comments were less harsh. Gloria Sorensen and Deborah McLellan of the Harvard School of Public Health, Center for Work, Health and Well-being, wrote that the wellness programs need to encompass the worksite itself, “Risk factors for cardiovascular disease that may occur at work include exposure to chemicals in tobacco smoke; organizational factors such as work schedules (e.g., long hours and shift work); and psychosocial factors such as high demand-low control work, high efforts on the job combined with low rewards, and organizational injustice,” they wrote.
They note, “Additionally, many traditional wellness efforts have had low participation rates by populations at highest risk for unhealthy eating, smoking, and physical inactivity… such as those in working-class occupations. Such workers may lack the time and energy to engage in these programs, either because the programs are often held during the day when workers cannot attend, or after work when employees many need to leave for another job or family responsibilities. Notably, these populations are also frequently at high risk for exposures to workplace hazards.”
Ted Kyle, writing for the Obesity Society, the Obesity Action Coalition, the American Society for Metabolic and Bariatric Surgery, the Yale Rudd Center for Food Policy and Obesity, the American Institute for Cancer Research, the Academy of Nutrition and Dietetics and Mental Health America, notes that, “there is little evidence supporting the effectiveness of employer BMI and other biometric-based incentives on actually producing sustainable weight loss or lowering healthcare costs…There are many individuals who are not overweight e.g., with a BMI in the ‘normal weight range) who have chronic health conditions such as hypertension, hyperlipidemia, diabetes, or engage in other health risk behaviors. Conversely, there are people who are overweight who are in good health, have healthy nutrition and activity habits, and whose blood pressure and cholesterol are in the healthy range.” The Kyle letter rightly points out that these programs penalize pre-existing conditions.” The letter recommends employers not use BMI or body size only metrics without consideration of additional health indices and that the employers insurance programs cover evidence-based obesity treatments.
All comments on the proposed regulations can be viewed at www.regulations.gov.