The idiom "speak softly and carry a big stick," as 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 continue to rise, but disincentives - while most caution against them - are the trend of the year in wellness. According to an Aon Hewitt survey, only 5% of employers currently use disincentives, but 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 work out?
The wellness industry has grown quickly, with only 19% of employers with 500 or more employees offering wellness programs in 2006. More recently, 83% of respondents in the Aon Hewitt survey - representing nearly 800 American employers and more than 7 million workers - now use some form of incentive.
"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 are accustomed to the program and may need a negative nudge to keep them moving forward.
But not all in the industry are quick to jump on the disincentive bandwagon. Even 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 issuer's overall philosophy. "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 multiyear 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," he says.
HCSC's disincentive programs are most common in 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," he says.
The first year of HCSC's incentive process includes starting a company out with general awareness and beginning work with incentives. An organization might then include employees' dependents in the second year. "Research has shown that in many cases, spouses cost more for employers to insure than employees," says Meier.
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.
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," she 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 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 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 standalone initiatives, says Meier, "because if incentives are treated as this standalone ... 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,'" he 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. This is a sort of "low-impact" disincentive, he believes, and could be a future solution for employers who are hesitant to get disciplinary with their wellness programs.
