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Providing an Incentive for Wellness

Eat right, exercise regularly, get plenty of rest and see the doctor routinely for check-ups. We all do that, right?

Well, no and that's a problem for individuals and for companies offering wellness programs. If, for example, a company starts a walking program for its employees and offers those who sign up a t-shirt and water bottle, said Bill Sims Jr., president of Bill Sims Co., a performance improvement company, it's common to find that the company "spent a whole lot of money on water bottles and t-shirts and the people who cleaned up are the people who were healthy anyway. For the people we most desperately needed to reach, such as smokers and marginal diabetics, we didn't have a big enough incentive to get them to change their behavior."

Sims says incentives are needed for wellness programs to achieve enough participation among employees to have an impact on health care costs, but he believes the incentives must be structured so that they are "very significant" for the "three-pack-a-day smokers" yet still offer something for low-risk employees.

Sims recommends companies begin with a health risk assessment (HRA) in order to survey their employee population and determine which employees are at elevated risk for chronic diseases. He said the first goal of an incentive program is to achieve a high rate of employees taking the HRA. "We want to see 90-95 percent," said Sims, who added his clients may use scratch-off cards as incentives that employees can redeems for a variety of gifts. He cited research that non-cash rewards will return as much as 6 times more on an investment than a cash reward. He said such incentive programs also can provide tax-free rewards.

Once companies have identified high-risk employees and the health issues they face, they can assess what programs are needed and again offer incentives for participation in activities such as smoking cessation classes or joining Weight Watchers.

One device Sims employs is the Smartcard, which he said gives companies a way to make employees aware of the behaviors desired by the company, teach employees the behavior and then reward them when they do it. The program uses cards with pictures of employees, information on a wellness topic and a quiz. Employees phone in to a hotline to answer the questions and be eligible for prizes.

"For instance, we have the ability in a health risk appraisal to ask employees, 'Would you mind telling us if you are on any of these 10 prescription drugs?" They check off Lipitor and Nexium,' said Sims. "If we reward the employee for sharing that information with us, we can then say, "If you and your doctor talk this over and switch from Lipitor to a generic drug, we'll reward you with extra scratch-off cards or points. That could mean a drug cost savings of $2,000 per employee."

Sims said many companies offer incentives for participation in wellness programs but often the incentives prove costly for the results they achieve. "We can reward with a $100 gift and come very close to getting the same participation rate as the company that spends $600 in cash." He said technology can be used so that high-risk employees get a greater share of the incentive rewards. "We can offer them a significant gift because we need to nudge their behavior. For a $200-300 gift, will they quit smoking? There will always be a segment you never reach. But if we can get 60 percent of a company's smokers to quit smoking, the ROI to that client is huge," he said.

For more information, visit his Web site at

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