The idea of an employer getting involved in personal health decisions is pretty unpleasant to most people. The idea of them somehow punishing you for being overweight is even worse.
That’s one of the reasons CVS faced significant backlash after announcing that employees who don’t disclose their weight and other measurements to their benefits company will face a $600 dollar annual penalty.
But they’re far from the only company using penalties to manage employee health.
When something like managing employee’s health choices already feels intrusive, penalising people is a poor management choice. It highlights the negative part of health efforts, and makes people feel singled out.
Because they’ve had such a poor response to voluntary programs, some companies decided that penalties are the only way to go.
This is troubling because efforts to try to change employee behaviours are going to grow. Employers spend an average of $12,136 per employee, and most spending is a result of chronic conditions, many of which are the result of obesity or smoking.
More companies will have to provide health insurance under the Affordable Care Act, and if premiums rise as the law’s enacted, as some predict, it’ll add to the pressure to cut costs.
Economists argue that penalties are more effective at changing behaviour, but they’re damaging to morale and company culture. Employers are, by law, allowed to have penalties or incentives that come in at less than 20% of salary, but others argue that singling out, say, obese people, can amount to discrimination.
There needs to be a middle ground that’s effective in reducing costs that doesn’t anger or alienate people.
The Cleveland Clinic was an early pioneer in employee wellness and they’ve been remarkably successful.
According to CEO Dr. Toby Cosgrove and Dr. Paul Terpeluk, the Clinic’s medical director of Employee Health Services, the keys to success are starting small, making incentives part of a larger cultural transformation, and actually working with doctors.
It’s worth taking their advice. The Cleveland Clinic’s reduced smoking among its employees to just 6%, its employees have lost 370,000 pounds over the past two years, half of its employees with chronic issues are in a disease management program, and rather than seeing yearly increases in the amount they spend health care spending rises, they’re seeing the rate of inflation adjusted spending fall.
That’s everything companies imposing penalties want, and they’ve done it largely with carrots rather than sticks. They’re still putting pressure on people to change their personal habits, but the perception is very different.
How to avoid backlash
“I think the main thing that worked really well was that we didn’t try to do it all at once. We just gradually trickled it out out,” Dr. Cosgrove said.
Before even touching incentives and premiums, the company started with smaller changes. They ended smoking on their campus, offered free smoking cessation to employees, and finally, decided to stop hiring smokers. Applicants are tested for nicotine along with other drugs, and if they test positive, whether they’re a doctor or a nurse, they aren’t hired. They’re offered free smoking cessation and re-testing if they test positive.
There was initial backlash, but it died down quickly. That was an early boost, the average smoker takes two weeks a year in smoking breaks a year, and costs about $3000 more in health care costs a year, Dr. Cosgrove told us.
When it came to weight loss and chronic conditions, before even touching incentives and premiums, the company started with smaller changes. Calories were labelled in the cafeteria, more healthy offerings became available, and sugared drinks and candy bars were removed from vending machines.
They also started to offer free access to Curves, Weight Watchers, gyms, yoga classes, a farmers market, and marked off walking routes in mileage. There were no strings attached to these offerings, and you got a reward if you met weight loss targets as part of a program.
“Backlash is always a problem when you tell people what to do. It started out when you were a kid when your parents told you what you didn’t want to hear so the idea to counteract that is to not act like a parent,” Dr. Terpeluk said.
“The winning strategy is to put forth first a cultural change,” Terpeluk added. “You want to create an environment where they actually think you’re helping them rather than hurting them.”
Alongside the restrictions came education, letting people know very clearly the issues with sugared sodas, and the larger context of the initiatives.
Add pressure, but don’t frame it as a punishment
These were all positive changes, but to really get people to change their behaviour, it needs to affect their wallet, so the Clinic began to tie participation in wellness programs.
Everybody at the Cleveland Clinic gets an annual physical, and those with chronic issues like high blood pressure, obesity, high cholesterol, and diabetes are encouraged by their doctor to enter a disease management program.
“This came about because in looking in our data, it turned out that we had 3000 employees who were diabetics, only 15 per cent of them were seeing a doctor on a regular basis,” Cosgrove said.
The Clinic was having to increase the amount employee’s were paying for insurance each year as premiums rose. But for those employees who stay healthy, enter disease management, programs work with their doctors, and meet goals, they would get a rebate for any increase in their premium. That can lead to major savings.
It’s had a big effect. Nearly 60% of the Clinic’s employees with one of these chronic issues is in disease management.
There was initially a big increase in the monthly cost of health care, because more people were getting care, but in the long run, costs are going down.
If you don’t change your behaviour, you’re going to end up paying more for health care. In a way, it is a penalty. But the way it’s been enacted has not only been effective in reducing costs, it’s also been viewed more positively, and made people healthier.
It’s presented as a reward for good behaviour, rather than a punishment for failure, and the advice and help comes from a doctor, rather than being imposed by management.
Work with doctors to make sure people actually change
In the end, the program works because it’s designed based on how doctors work with patients, and how people get healthier.
Dealing with chronic conditions, which are the source of a large portion of health care costs, requires big, long term changes in behaviour, not short term reactions to avoid a penalty. That knowledge is the basis of the program’s design.
It’s also something that those companies penalising people clearly don’t understand.
“Everyone can have incentives, but what we hit upon was going to the physicians first to have the physician direct it along with our disease management program,” Dr. Terpeluk said. “Can that be exported? Absolutely, because everybody has a physician.”
NOW WATCH: Ideas videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.