Health Populi

Thursday, August 7, 2008

Employers are spending more on incentives for worker wellness


Incentives for wellness in the workplace are gaining favor among employers, according to a survey jointly conducted by the ERISA Council (ERIC) and the National Association of Manufacturers.

Only 30% of employers offering wellness programs are measuring the results of these activities. Of those who measure, 83% of employers have seen positive or break-even ROIs for these investments.

The proportion of companies using incentives to promote employer-sponsored health and wellness programs increased to 71% in 2008 from 62% in 2007.

Although employers are being drawn to offer these incentives, there is a wide range of value for them. The average value of incentives per person per year was between $100 and $300, averaging $192 per person per year.

Smoking cessation had a huge range, from a low of $5 to a high of $600.

Weight loss ranged form $5 to $500 for incentives.

As the chart shows, the most common incentive is rewarded for simply participating in a program, used by 1 in 2 employers.

Health Populi's Hot Points: Welcome to the age of 'nudge,' where employers' benefit plans are getting smarter about motivating employees to engage in healthy behaviors. These are more carrot-than-stick strategies. See Thaler and Sunstein's book, Nudge, for more on the economic rationale and theory behind this tactic. I posted on this strategy in Health Populi earlier this year here.

Only 30% of employers currently measure outcomes. More should and will track these numbers, which will allow them to calculate their ROIs for these programs. As positive ROIs are demonstrated, plan designers will be able to sort out the levels of incentives that work for the various wellness components. This is a growing and moving target -- and an important one that can impact health costs and productivity -- that we'll continue to monitor.

posted by Jane Sarasohn-Kahn at 5:00 AM

1 Comments:

  • We've actually found that incentives do help to drive participation, but so, too, do internal grassroots marketing campaigns.

    We've had several clients who saw program participation rates over half with only a drawing prize (like an ipod shuffle) or a small incentive housed within a well-integrated grassroots internal campaign.

    The best part is that not throwing too much money at people initially and getting a feel what what intrinsically motivates them will help them more sustainably in the long-run.

    An incentive can be the push that a less healthy employee who is reluctant to particpate may need, but ultimately you want them to walk away from the program with a true desire to participate in order improve their own health.

    By Blogger Recess, At August 7, 2008 8:25 PM  

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