Financial Incentives to Encourage Program Use Vary in Effectiveness
WASHINGTON, D.C., April 15, 2009 — Despite the recession and recent cutbacks in some benefit programs, companies continue to add wellness and health management programs to promote healthier behaviors among their workers. Additionally, companies are finding greater success by offering workers financial incentives for participation in these programs, according to a survey by Watson Wyatt, a leading global consulting firm, and the National Business Group on Health (NBGH), an association of more than 300 mostly large employers.
Employer interest in programs that promote a healthier workforce continues to increase, the survey found. For example, nearly six in 10 companies (58 percent) offer lifestyle improvement programs, up from 43 percent in 2007, while 56 percent offer health coaches compared with 44 percent in 2007. The number of weight management programs is also on the rise, offered by 52 percent of companies, up from 42 percent in 2007. Also, health risk appraisals are offered by 80 percent of companies, up from 72 percent in 2007, according to the survey of 489 large U.S. employers conducted in January.
“Employers continue to see gains from promoting wellness and health management initiatives,” said Scott Keyes, senior group and health care consultant at Watson Wyatt. “Effective financial incentives are one of the keys to encouraging worker participation in these programs — an effort that not only improves the health of workers but also helps reduce costs.”
Companies that offer financial incentives report significantly higher participation in lifestyle management and wellness programs, according to the survey. However, employee participation in some wellness programs remains low. For example, despite the rapid rise in obesity across the United States, 40 percent of companies report that less than 5 percent of their workers participate in weight management programs. Still, many companies struggle to track participation in their wellness and health management programs.
Incentives for health risk appraisals are on the rise, offered by 61 percent of employers, up from 53 percent in 2008. Other programs that frequently offer incentives to encourage use include those for smoking cessation (offered by 40 percent of employers in both 2008 and 2009), weight management (offered by 34 percent of employers, up from 31 percent in 2008) and full coverage of preventive services (offered by 73 percent, up from 53 percent last year).
According to the survey, even moderate incentives can help engage employees in healthy behaviors. Financial incentives between $51 and $100 can boost participation in smoking cessation and weight management programs and encourage workers to get biometric screenings. Higher participation in health risk appraisals is associated with incentives greater than $100. However, financial incentives have limited impact on participation in disease management programs.
“The relationship between the amount of the incentive and the level of program participation among employees is strong,” said Sherri Potter, senior group and health care consultant at Watson Wyatt. “A properly structured incentive program does much more than protect investments in health management; it creates a healthier and more productive workforce.”
To view the 14th annual NBGH/Watson Wyatt report, visit www.watsonwyatt.com/2009nbghsurvey.
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About Watson Wyatt Worldwide
Watson Wyatt (NYSE, NASDAQ: WW) is the trusted business partner to the world’s leading organizations on people and financial issues. The firm’s global services include: managing the cost and effectiveness of employee benefit programs; developing attraction, retention and reward strategies; advising pension plan sponsors and other institutions on optimal investment strategies; providing strategic and financial advice to insurance and financial services companies; and delivering related technology, outsourcing and data services. Watson Wyatt has 7,700 associates in 33 countries and is located on the Web at www.watsonwyatt.com.
About National Business Group on Health
The National Business Group on Health is the nation's only nonprofit membership organization of large employers devoted exclusively to finding innovative and forward-thinking solutions to their most important health care and related benefits issues. The NBGH identifies and shares best practices in health benefits, disability, health and productivity, related paid time off and work/life balance issues. NBGH members provide health coverage for more than 50 million U.S. workers, retirees and their families. For more information about the NBGH, visit www.businessgrouphealth.org.