The impact of an integrated, incentive-based approach to employee health

American businesses are in a fight for their lives. The opponent? Rising health care costs. Employers pay 36% more for health care than they did just five years ago, according to a TowersWatson/National Business Group on Health report, and employees contributed over 45% more during the same time period.

These trends are unsustainable for businesses and employees, and they pose a real danger to organizations' bottom lines. Health care reform alone won't solve the problem. To significantly lower health care costs, we need to keep people out of the health care system in the first place. We need to keep them healthy.

Shifting focus from treatment to prevention

How do we accomplish that seemingly simple concept? In a word, prevention. It's imperative we shift the focus from treating the condition once a person gets sick to preventing the onset of the condition in the first place.

To help make this transition, employers are seeing the value of an incentives-based approach to wellness and are allocating more dollars toward incentives; a 2010 Fidelity Investments/National Business Group on Health study showed employers averaged a total of $430 per employee in 2010, up 65% from 2009.

Yet, managing multiple incentives-based programs is not without its challenge. With so many programs, vendors, incentives and communications, HR/benefits managers are asked to figure out how to juggle all of these elements.

Some programs provide reams of data; others provide little or none. Some encourage one-time events, like completing a health risk assessment, while others encourage regular behaviors, like increasing daily physical activity.

Many employers offer multiple programs, yet still grapple with awareness. Forrester Research reports while many organizations offer a range of programs, in all cases a large majority of employees - sometimes as many as 90% - don't know their employer offers certain programs.

Even among employees who are aware of programs available, with a variety of programs, incentives and communications, it's sometimes difficult to see the big picture. They're not sure what they need to do, how to do it, when to do it or if it's really of any benefit to them.

Given all of this, it's tough for employers to measure the effectiveness of their programs and manage the impact of their employee health investments. In turn, this affects an organization's ability to make sound decisions around things like adding or discontinuing programs, allocating incentives and communicating the right messages to employees at the right time.

Forward-looking organizations are addressing these challenges by bringing multiple incentives-based programs under a single umbrella. In this day of information overload, bringing programs together and making things simple for employees can lead to much greater understanding, higher engagement and better results when it comes to the multiple health programs organizations offer. What's more, it allows employers to leverage their existing incentives budget to get more done.

With an integrated approach, employers have one central place to communicate with and motivate employees, and cohesively promote and manage the programs they offer. When these are tracked together, it's easier for employers to measure the effectiveness of their incentives and programs. It also helps organizations facilitate a more nimble, efficient and robust decision-making process.

From the employee's perspective, an integrated approach helps them understand exactly what incentives they're eligible for and how to earn them. Plus, it provides a consistent message, regardless of the programs and tools being offered.

Finally, it helps employees see how all the programs and activities their employers offer contribute to their health and well-being.

Ed Dougherty is the vice president of client and member services for Virgin HealthMiles.