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Life Health > Health Insurance > Health Insurance

Survey: Cash Incentives Work Better Than High Deductibles

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Paying employees for specific types of healthy behavior may control benefits costs better than increasing all employees’ out-of-pocket costs does.

Researchers at SHPS Inc., Louisville, Ky., a health plan management firm, have published that finding in a summary of results from a survey of 115 large and midsize employers. Each participating employer had at least 1,000 employees who were eligible for health coverage.

The researchers found that use of some popular cost management techniques correlated with increases in employers’ annual health care costs.

Offering employees a choice of health plans with different designs correlated with a 20% increase in premiums per employee eligible for health coverage, and using high deductibles and co-payments as an incentive to make efficient use of health care correlated with a 29% increase.

Simply offering a wellness promotion program correlated with a 17% increase, or a difference of about $1,300 per employee per year, the SHPS researchers estimate.

Using cash payments and other financial incentives, such as gift certificates and ongoing reductions in health insurance premiums to persuade employees to adopt specific behaviors correlated with a 15% decrease in premium costs.

Using a care management program to help employees with catastrophic health problems and serious chronic illnesses cope with the health care maze cut premiums 18%, the researchers report.

The researchers included employee assistance programs in the “care management” category, and EAPs appeared to help lower costs, the researchers report.

Account-based health plans and pay-for-performance provider networks had no apparent effect on plan costs, the researchers report.

The researchers contend that the wellness promotion results may be difficult to interpret.

Many wellness programs are young, and they may be encouraging employees to spend money on preventive measures and screening tests that will cut overall costs in the future, the researchers note.

Some wellness programs may run into trouble because they depend on employees to report on their own behavior, rather than on medical claims or the results of lab tests, the researchers suggest.

In some cases, “wellness promotion and education programs don’t make health care costs go up…but they create a false illusion of progress, allowing employers to ‘check the box’ on care management without having a real impact,” the researchers write.

Effective wellness programs should operate in conjunction with health screening tests, or even with mandatory physical exams, the researchers write.


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