CVSThe Boston Herald was one of the first newspapers talking about CVS requiring workers to disclose personal health information…”or pay a $600 a year fine,” as the LA Times succinctly put the situation.

The story is that CVS Caremark, the pharmacy and Rx benefits management company, is implementing a health screening program to measure height, weight, body fat, and blood pressure. These metrics are commonly collected in the process known as health risk appraisals (HRAs), which most large employers have begun to implement to help employees prevent the onset of chronic disease (think: “metabolic syndrome,” diabetes combined with overweight, for example), and to try and manage the spiraling costs of health insurance.

Since CVS announced their plan, major news outlets have been covering the story. Weighing in, so to speak, among the 140+ media titles addressing this story were:

Fox News: ObamaCare weighs in: CVS tells employees to reveal personal health info — or pay up

The Daily Beast: CVS Wants Workers’ Weight, Body Fat, and Glucose Levels

The Washington Post: The CVS Health-Screening Debate

The Huffington Post: CVS to Penalize Workers Who Don’t Disclose Weight, Body Fat

The Today Show: For Cheaper Health Insurance, Step on the Scale.

The backstory will be familiar to regular Health Populi readers:

CVS is one of these large employers getting serious about the company’s health costs, and the role of employees in deeper health engagement as a way to (1) improve personal health outcomes and lower risks of chronic disease and (2) bend the corporate and consumer health cost curves. On CVS’s website, the company addresses some of the recent press allegations concerning their approach to mandating this engagement, and dis-incentivizing employees’ “bad” health behaviors through higher payments for health insurance coverage.

8 in 10 large employers offer wellness programs, CVS points out, and this has been reported through employer surveys by ADP, among other employee benefits firms. Most of these firms offer health risk appraisals (HRAs), and couple the worker’s screening with a financial incentives. In the CVS case, the company notes that,

“Our initial request three years ago was that employees take a first step toward better health by getting a private health screening with the provider of their choice. But we realized many more people needed to participate. So this year, we made our incentive clearer, by letting employees know how much their premiums would go up if they didn’t get screened. This is not a dock in pay or a mandatory measure, as some news outlets have suggested. If an employee does not want to take advantage of the preventive health screening part of the program, they can choose not to participate. And an employee’s health status does in no way affect their employment status with our company…

In conclusion, CVS states,

“The screenings will simply help employees know what steps they can take toward better health. And over time, our combined efforts will help everyone feel better, enjoy life more and keep premiums lower.”

Health Populi’s Hot Points: CVS is but one among many large employers who are getting more serious about the wellness and health risks of their workers. Among the media covering this story, the Boston Herald got the title right on a follow-up to its initial coverage: “CVS Won’t Be the Last to Seek Health Info.”

To put the U.S. employer-health coverage phenomenon in context, America is the only nation that has this type of health financing on Planet Earth. Developed countries, all, have at a minimum, mixed public-private financing of health care. Employers in those countries do not fund health coverage for their employees, although many offer a health plan benefit to cover over-and-above what public sector health plans provide as an inducement to join their firms.

Employee-sponsored health care in the U.S. advanced in World War II, starting up as a way to attract workers to companies through offering “fringe benefits.” Over time, in 1943, the IRS said employer-sponsored health benefits would be tax free, and more tax advantages were added in the mid-1950s. NPR did a good job explaining this idiosyncratic history here.

Today, however, the American health benefit can be seen as a cost that puts U.S. companies at a global competitive disadvantage: say, for GM as an auto manufacturer vs. Japan’s Toyota, or for Citibank based in the U.S. compared with Deutsche Bank in Germany.

Employees in the U.S. now see a line item clearly spelled out on their IRS W-2 indicating how much their company spends on employee health care annually. The U.S. health financing system in the private sector is an unsustainable model, and the Accountable Care Act itself won’t slow down cost growth without re-working care delivery. That’s on the supply side.

On the demand side, this will require health engagement by consumers, patients, workers — pick your favorite noun for “us.” In the case of low health engagement, we have met that proverbial enemy: the U.S. health care consumer. CVS is responding rationally as an employer trying to maintain health coverage for its workforce. “Rationally” doesn’t have to mean “nicely,” or “humanely,” or “sensitively.” In the short run, those words might not ring true. But thinking about the scenario overall, more engagement in wellness programs could yield greater health for the worker who partakes in the services available, and at the same time, save them $50 a month in health plan premiums.

In the long run, the benefits could be interpreted as humane and caring. But the “stick” approach, in the short-run and in the way CVS’s program was communicated and packaged to employees, missed an opportunity to curry employee health engagement from the get-go. Here’s a case where employee input into the program, involving employee health benefit champions, could have made a difference in how the program was developed and then deployed.

4 Comments on The Rationale for CVS “Sticking” (vs. “Carroting”) It To Employees for Wellness

Taylor Walsh said : Guest Report 10 years ago

My guess this will end up a list that includes 12-hour workdays.

Greg Juhn said : Guest Report 10 years ago

Thank you for providing a lot of background and detail that was not addressed anywhere else. I really like how you ended this by talking about better employee engagement. The manner in which these decisions are made and communicated is essential. There needs to be some real thought and progress made on the best ways to get employee buy in at the beginning of the process. It probably involves a staged approach of first communicating the costs of healthcare, the employer's contributions, and the impact the costs have on the company's "health." Then something about how rates are going up. Then maybe a survey to ask employees whether they would be interested in a discount for wellness participation. If the employees do not buy in to the "we're all in this together" concept, then the company probably has even bigger engagement and trust problems to deal with first.

George Van Antwerp said : Guest Report 10 years ago

Jane - I agree. This will be the norm and is quickly getting there. Pam - I cited some of the same Towers research and AON research yesterday in my blog post to support this story. I think the key point is that consumers have to realize that this will ultimately be in their best interest. By employers focusing on this, they will have to embrace health at a new level to affect change and acknowledge that work is where we spend a lot of our lives and drives stress, sleep patterns, eating, and our social networks...all of which affect our health.

fran melmed said : Guest Report 10 years ago

When I read this news yesterday I sent out a series of tweets from only one study, the latest Towers Watson/NBGH study: 37% of companies structure employee contributions based on employees taking specific steps (e.g., health assessment) more than two-thirds of companies offer financial incentives to encourage participation in company wellness activities 36% plan to use penalties in 2014 for individuals not completing requirements of health management programs 54% require employees to complete health risk appraisal / biometric screening to be eligible for financial incentives The point I was trying to make (in my customary lowercase way, via twitter) is that CVS is not unique or unusual. They are in step, if not perhaps a bit ahead of, many large corporations in the U.S. The stakes have been growing increasingly bigger and harsher, and we're seeing only the beginning. While the jury is out on the evidence for these health-contingent programs, companies grappling with health care costs are not waiting for that evidence to roll in. They're going to find out themselves. One wish, and not my only wish, is that companies simultaneously examine their built environment, work policies, and such, and get as adamant about changing these to improve health as they are about changing--and charging--employees. f

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