Outcomes or Participation Based Programs? The Answer is Yes

Under the PPACA that goes into full effect on January 1, 2014, employers will have to heed guidelines regarding the administration of their corporate wellness programs.

Three Cabinet departments – Health & Human Services, Treasury, and Labor – have released guidelines for proposed rules that promote well-designed, consumer-protective wellness programs. The interesting thing is that these guidelines advance the idea of participation-based wellness programs.

What is a participation-based program? Odds are, if your company currently has a program, most (if not all) of its parts are based on participation. Getting a yearly physical, completing a Health Risk Assessment, signing up for the pedometer program, or attending a monthly nutrition seminar? All of these are examples of what typically make up a participatory wellness program.

The key is that participatory programs dole out rewards based on doing a particular activity. They don’t tie your employee’s derived benefits to achieving a certain health outcome (like, for instance, not being on statins or blood pressure medication).

In many ways, this is a good thing. For one, it doesn’t discourage the unhealthiest of your employees from taking part. Some may feel so dispirited about their condition(s) that a purely outcomes-based wellness program might completely drive them away from participating.

This, naturally, is exactly the opposite of what you would want for those employees.

Integrating participation-based elements into a full-spectrum wellness program is essential. At the very least, it serves as a gateway to employees taking on outcome-based elements of the program.

Now, as you might have guessed, outcome-based programs are tied to certain health outcomes. A healthy blood pressure, not being on health-related medications (e.g., statins, blood pressure meds), having a body fat percentage below a certain point, or achieving 10,000+ steps a day in the pedometer program — all these are examples of outcomes.

You can see how the two dovetail, and how participation can open the door to achieving desired outcomes.

Fortunately, outcomes-based wellness programs are also gaining favor in the law. One provision is that an employee’s insurance premium can be reduced by as much as 30% if they meet certain outcomes, an upward change from 20%. The 30% raises to 50% for programs that include tobacco cessation.

The caveats to outcomes-based programs are:

  • alternative metrics must be included and publicized for those who may not be able to meet the primary outcome,
  • they have to be designed to improve health, but not so hard as to prevent meeting standards, and
  • they must offer alternative measures for people who for medical reasons cannot participate in the program.

Bad Example: Acme Company’s wellness program is tied to being below a certain body fat percentage (8% for men, 18% for women). The problem here is that for most people, achieving these body fat percentages is extraordinarily difficult.

For Jack Smith, a beginner who is trying to get down from being 300 pounds and 40% body fat, it might seem impossible.

Better Example: The JD Corporation’s wellness program urges employees to achieve a healthy body fat percentage (18% for men, 25% for women). The benefits literature also states that if you can’t meet that marker, and if you’ve successfully dropped 10% body fat in the previous year, you also qualify for the reward.

For Alice Parsons, who began the year at 35% body fat, this is quite doable. (In fact, most people can drop more than 10% body fat in half a year when they combine proper nutrition and exercise.)

The fact of the matter is that while wellness programs based solely on participation work for a short time, they don’t inspire employees to change. They got their reward by filling out the HRA, getting a physical, and picking up their pedometer. They don’t have to do anything else.

Tying in outcomes alongside participatory measures, and throwing in more rewards, gets people interested and invested in improving themselves. Lay the foundation with participatory rewards, then build on the feeling of awards from participation by offering bigger (better?) rewards based on achieving health-based outcomes.

Is this what your company’s program does? Let us know.

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