The idiom "speak softly and carry a big stick," as 26th President Theodore Roosevelt's foreign policy doctrine is famously known, very much applies to wellness at the workplace. And these days, the stick seems to be getting bigger.

Incentives to drive health and wellness programs are continuing to rise, but disincentives - while most caution against them - are the trend of the year in wellness. According to an Aon Hewitt survey released in April, while only 5% of responding employers currently use disincentives, 53% say they plan to begin doing so in the next three to five years. The expressions surrounding this mentality are many - the donkey likes the carrot and hates the stick, the iron fist is always covered with a velvet glove - but what does it all mean, what works and how will this slap-on-the-wrist tactic all work out?


History lesson

According to the Harvard School of Public Health magazine in 2009, the trigger for incentives could have come "in December of 2006, [with] final rules on group health plans under the Health Insurance Portability and Accountability Act. These rules reduced the uncertainty about what was legally permissible, which was probably holding some insurers back from moving in this direction."

The industry has grown quickly, with only 19% of employers with 500 or more employees offering wellness programs in 2006, even less were offering incentives. More recently, 83% of respondents in the aforementioned Aon Hewitt survey - representing nearly 800 American employers and more than 7 million workers - now use some form of incentive.

But next, it seems that it's the disincentive's time to shine. This tactic was born, really, at the same time incentives were. "Disincentives are nothing but incentives with a marketing wrapper," says Cyndy Nayer, a value-based wellness consultant. "People get used to the incentive that you give them, so you have to change it up. After a while, they're just going to expect more money."

It's commonly embraced in the wellness field that disincentives should be introduced in the third year of a program, once employees and even dependents are accustomed to the program, and may need a negative nudge to keep them moving forward.


Sticks and stones

But not all in the industry are quick to jump on the disincentive bandwagon, and in fact, even those carriers that use them caution against them until the time is right. UnitedHealth Group decided not to use disincentives in a musculoskeletal pilot wellness program this year. "We have chosen not to go down that path," says Patti Walsh, a vice president in UnitedHealth's Innovation Resource Group, referring to the specific program, but seeming to reflect the issuers' overall philosophy on the tactic. "We don't want to say, 'If you don't do this we won't pay your claim.' That's not what we're about."

Walsh says that when one employer was recently intent on using a disincentive in a different UnitedHealth wellness program, its lack of success confirmed her organization's attitude that "carrots work better than sticks." Walsh says the numbers for that employer program did much worse than the employers in similar programs that chose incentives.

Meanwhile, Nayer agrees with Walsh, in most cases. "[If] we spank babies, they don't know what you're doing when you hit them." She does say there are unique cases where a disincentive could be helpful. "There are times when the teenager just doesn't want to do what you want them to do. And so I say, a disincentive might be an option."



Blue Cross Blue Shield of Illinois is one insurer that is slowly embracing the stick concept. Tom Meier, vice president of product development at the Health Care Service Corporation, which operates several BCBS state plans, explains his company's multi-year approach to wellness. "It's for the most progressive [clients] out there who can say, 'We're far enough down this journey and I've been rewarding you for multiple years.' So that might be more a time to introduce disincentives," Meier says.

HCSC's disincentive programs are most common around smoking cessation. "They tag a tobacco surcharge or even do it for BMIs for weight loss, but certainly, from our perspective, it's not something we'd recommend any employer jump into," Meier continues.

The first year of HCSC's incentive process includes starting a company out with general awareness and beginning work with incentives. From there, Meier says in the second year an organization might then include employees' dependents. "A lot of costs are on the dependents," he says. "Research has shown that in many cases, spouses cost more for employers to insure than employees."

It's in year three that a disincentive might work. In fact, in preliminary numbers from a small sampling of HCSC programs in Illinois, New Mexico, Oklahoma and Texas, disincentives can improve engagement nearly four times more than incentives. Meier stresses this needs to be researched further and include more people.


The future

Wellness consultant Nayer is less than optimistic about how disincentives will play out. With incentives, she says, the health or wellness activity becomes emotional. "When you have an emotional tie, your brain floods with dopamine, a feel-good sensor, so you want to do it again and again ... this is the runner's high that happens and what some people get from alcohol or sugar," Nayer says. But no such thing happens with a disincentive.

Nayer says employers can get a 6%-10% and maybe even an 18%-20% increase in engagement with incentives. "In reality, if we really want to manage down diabetes or hypertension, then we've really got to get more than 50% of the population participating," she says.

Nayer and Meier both say that's when critical observation of the employer's culture is key. "You've got to select relevant activities and rewards," Meier says. "It's so effective for an employer to look at their own population and ask, 'What [am I] trying to solve for?'"

Incentives are not stand-alone initiatives, says Meier, "because if incentives are treated as this stand-alone ... I see it on my paycheck but I don't really know where it comes from, then I think they become marginalized." In other words, rewards tied directly to the activity tend to work much better.

Also, as employers continue to climb out of the tough economy, Meier says he has another trick up his sleeve - how to use incentives with a net-zero expense for the employer. "For example, an employer might say, 'I'm going to raise the premium 2%. However, you have the chance to get back to zero. And here's what I need you to do: You're going to do your biometric screening, meet with a disease management counselor ... if you do those things, then you don't have that premium increase,'" Meier says.

He explains that the people who don't become engaged aren't really getting a disincentive so much as they're just not getting the reward. Meier explains this is a sort of "low-impact" disincentive, and could be solution in the future for carriers and brokers who are hesitant to get disciplinary with their wellness programs.





Jon Whicker had a weight-loss problem. The finance manager and father of two from Utah, who at his heaviest weighed in at about 400 pounds, had joined a dieting competition with some family members. Several weeks in, things were going great, until Whicker, 37, encountered an unusual dilemma: He had lost too much too quickly.

HealthyWage is a weight-loss initiative with a twist - participants bet their own money and stand to gain considerable payouts - but for health and safety reasons they place limits on shed poundage in a given timeframe. For the $10,000 prize Matchup competition, rules cap loss at 16.59% of starting weight over a 12-week period. Whicker was at 17%.

"Once that competition was over, I wanted to keep going; I wasn't ready to stop yet, so I actually got a group of people from my office to do it with me," he says, adding he lost another 16.4%.

That's of his new starting body weight. Whicker has lost 125 lbs. and gained $2,200 through the HealthyWage programs.

Research released last month from a Mayo Clinic study found "weight loss study participants who received financial incentives were more likely to stick with a weight loss program and lost more weight than study participants who received no incentives."

HealthyWage officials explain that money is significantly more of a motivator than traditional incentives. The wagered risk (and competition) of betting on your own diet and exercise is seeing marked success, they report. HealthyWage officials say they offer a 49% and 29% success rates, respectively, for 5%+ and 10%+ weight loss.

HealthyWage offers three basic competition formats: The Matchup, in which teams of five compete together to lose the most weight (again, up to 16.59%); the 10% Challenge, where participants can double their money if they lose 10% of their body weight in six months; and the BMI Challenge, which rewards achieving a healthy body mass index. - Tristan Lejeune

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