Using an Integrated Incentive Solution as Part of an Effective Health Management Program

Transcription

1 Using an Integrated Incentive Solution as Part of an Effective Health Management Program

2 Integrated Incentive Solutions IncentOne provides integrated incentive solutions that combine the essential elements of a successful program: Seamless integration of rewards, systems, guidance and services: Rewards that appeal to all audiences Proven systems that administer all activities and processes Real-time tracking and reporting Guidance on optimal program design, execution and improvement Services to effectively implement, support, communicate and analyze The industry s most comprehensive reward portfolio including gift certificates/cards from hundreds of the nation s finest retailers, brand-name merchandise, travel packages, personal services and phone cards. IncentOne provides its solutions to employers and partners including health plans and health IT, broker, benefits, wellness and disease management companies.

3 IncentOne Healthcare Solutions IncentOne offers a variety of incentive solutions specifically designed to target healthcare objectives through the healthcare delivery chain: Employee Power : integrated points-based incentive solution designed to target multiple healthcare and wellness activities to drive cost reductions. Healthy Choice Award : incentive awards for completing individual health and wellness activities (e.g. Completion of a Health Risk Assessment). Physician Rewards : integrated incentive solution specifically designed to target physician behaviors such as e-prescribing, online case management and adoption of online healthcare delivery. IncentOne provides employers and partners with an integrated incentive solution to drive consumerism and healthcare cost reductions.

4 Healthcare Clients and Partners IncentOne provides solutions to employers and partners including health plans and health IT, broker, benefits, wellness and disease management companies:

5 Convergence of Factors Several factors have made it unlikely that employees will be better healthcare consumers because it benefits their health or their employer: Increased Co-Pay Dependent Surcharges Reduced Benefits Employee Increased Corporate Profits Disconnect with Impact on Company 62 percent of employers believe that the biggest hurdle to adopting change is employee resistance and entitlement to coverage. 1

6 The Challenge The lack of many integrated providers of health programs requires employer resources for sourcing multiple health vendors: Healthcare Portal Disease Management Wellness Screening & Appraisal Integrated Health Program On-site Delivery PBM Management Absence Management Integrated Incentive Solution Data Collection Even though incentives are essential, employers lack the resources to implement integrated incentive solutions as they focus on the core health programs.

7 The Consequences Nearly 61 percent of employers have less than 25 percent of employees participating in employer sponsored-wellness programs 1 : 4% 1% 11% 32% 23% Less Than 10% 11% - 25% 26% - 50% 51% - 75% 76% - 90% More than 90% Having many programs available to employees is helpful, but obviously has no impact if employees do not take advantage of them. 1 29%

8 Two Views of Incentives Incentives can be viewed as one component of an effective program or a core component required to drive activity in all program elements: Healthcare Portal Disease Management Wellness Healthcare Portal Disease Management Wellness Screening & Appraisal Integrated Health Program On-site Delivery Screening & Appraisal Integrated Health Program On-site Delivery PBM Management Integrated Incentive Solution Data Collection Absence Management PBM Management Data Collection Absence Management INTEGRATED INCENTIVE SOLUTION

9 Evolution of Incentives Incentives must evolve to provide employees with rewards that drive behavior not that serve employers perceptions of consumerism: Gym Discounts Gym Discounts Payroll Contribution Gym Discounts Payroll Contrib. Health Rewards HRA Gym Discounts Payroll Contrib. Health Rewards HRA Condition Cost HSA Gym Discounts Payroll Contrib. Health Rewards HRA Condition Cost HSA Gift Cards Employers often utilize cash due to two factors: the lack of an integrated solution to manage administration and data on the most compelling incentives.

10 Cash vs. Non-cash Incentives Cash can be employed for single, significant events but often fails to provide meaningful incentives to drive daily behaviors: ISSUE CASH NON-CASH STATISTIC/COMMENT SINGLE EVENT X X Single events (e.g., HRA Completion) can use cash or noncash if values are significant. ONGOING BEHAVIORS X Rewarding with small cash values for ongoing activities (i.e., chronic condition activities) is ineffective and often harmful. MEMORABILITY X 1,000 people asked how they spent their cash incentive: 5 o 29% paid bills o 10% did not remember o 15% said they never received the cash IMPACT ON BEHAVIOR X 84% of respondents say non-cash awards are remembered longer than cash. 3 SOCIAL REINFORCEMENT X Cash lacks the trophy value and social reinforcement attributes that increase the perceived value of the award over cash. SEPARATE FROM COMPENSATION X 60% of employees view cash incentives and awards as a part of their annual compensation. 3 With chronic conditions driving 70 percent of costs, incentives that can be applied to ongoing activities are critical to driving cost reductions.

11 What are the best incentives? Studies indicate that gift cards are the most popular incentive: 80 percent of consumers would rather receive a gift card than any other gift (Ceridian/Comdata) 6 Gift cards are the most popular incentives in wellness programs (International Foundation of Employee Benefit Plans) 4 48 percent of 365 large employers indicated that gift cards are the most popular incentives for wellness programs (Deloitte Center for Health Solutions) 1 Gift Cards are the most popular incentive in consumer directed loyalty and promotion programs nearly three times more popular than any other item (Incentive Federation Study of Motivation and Incentive Applications) 1 Gift cards are the cornerstone of all major credit card and hotel consumer loyalty programs including Citibank, American Express, Marriott, Capital One, and MBNA In programs that utilize gift cards and all other traditional reward categories, gift cards are selected over 74 percent of the time (IncentOne). 7

12 Why an Integrated Solution? An integrated approach to incentives is required to address the core cost drivers across an employee population: Chronic Conditions Prescription Dependents Plan Design & Selection COST DRIVERS Increased Utilization Catastrophic Claims Retirees The need for an integrated incentive solution mimics the need for an integrated suite of health promotion programs to truly address cost drivers.

13 Integrated Incentive Solution Elements An integrated incentive solution delivers the seamless integration of elements in an engine for multiple/changing health activities: Employers require a single solution that can be applied to multiple activities, populations, program stages, health partner programs and data sources.

14 Rewards Key to Success: rewards that appeal to all audiences regardless of location or demographic with customization as an added benefit: Single Event or Ongoing Incentive Solution Rewards Appeal to All Audiences Physical or Electronic Award Delivery Flexibility to Modify Reward Portfolio Interactive Redemption Experience Online and Telephone Reward Support Integration of Payroll Contributions and HRA/HSA Healthy Rewards Selection Management of Non-cash and Cash Rewards

15 Systems Key to Success: proven systems that track and administer all health activities and associated processes: Employer-specific Customization Data Integration Integration with Health Partners Real-time Tracking and Reporting Payroll Integration Systematic Enforcement of Rules Tracking of Self-Reporting Activities Dependent/Retiree Auto Enrollment Integrated Communications Tools

16 Guidance Key to Success: guidance on optimal program design, execution and improvement: Incentive Structure Design Best Practices Program Improvement Industry-Specific Considerations Activity-based ROI TM Dependent and Retiree Application Data Integration Practices Tax Policies Incentive Program Policies

17 Services Key to Success: services to effectively implement, support, communicate and analyze the program to maximize effectiveness Employer/Employee Support Implementation Communications Training ROI Analysis Database Mining and Targeted Communications Customizable Fulfillment

18 Designing Your Program

19 Program Design Methodology With an integrated solution in place, incentives can be used to EMPOWER TM employees to be better healthcare consumers: STAGE EVENTS VALUE GOAL EXAMPLE ENGAGEMENT Single Highest 1. Provide employee with significant incentives for a specific activity 2. Simplicity of communication 3. Foundation for ongoing participation $50 in points for completing a Health Risk Assessment PARTICIPATION Increased but limited number of activities (3 to 5) Significant for each event but reduced 1. Provide significant follow-on incentive to drive participation and learning 2. Provide large enough incentives to keep employee engaged 3. Foundation for concept of if I take healthy actions I will be rewarded. $25 in points for: Enroll in Wellness Program Attending Health Fair Annual Checkup Program Completion WEAVE Many Small amounts for each activity 1. Integrate rewards into daily behavior 2. Culturize participation and learning 3. Clear communication you will be rewarded for healthy behaviors. $5 in points for: Screenings Attend Gym Seat Belt Use READJUST Add and adjust values and activities Adjust for existing and add for new events 1. Adjust values/activities to meet goals 2. Target specific program conditions 3. Trend analysis to determine focus and incentive value adjustment Increase incentive for Health Risk Assessment

20 Single Event vs. Ongoing Incentives Single event incentives can drive Engagement stage but must be woven into an integrated solution that impacts chronic behavior: Staged approach can allow focus on a specific activity (e.g., HRA Completion) but must be done in view of larger integrated program Risk of single event incentive being disjointed from communications strategy Integrating cultural value of healthy employees requires ongoing branding and employer of choice messaging Larger incentive values associated with single events can undermine lower values required for later-stage activities and participation Ongoing program enables more efficient budget use if incentives are culturized With chronic conditions driving 70 percent of costs, single event incentives act only as a starting point to impacting the behaviors that drive cost.

21 Incentive Values Results for completion of Health Risk Assessments show a correlation between incentive value and participation: Participation % $0 $25 $50 $75 $100 $250 $500 Incentive Value

22 Taxation Issues Real-time tracking and reporting of incentive issuance is critical to tax, legal and related compliance issues: Compensation Gross-up Calculations Sarbanes-Oxley Compliance HIPAA Compliance Health Savings Account Contribution Limits Union Worker Compensation Issues Regardless of the incentives used, real-time tracking and reporting is essential in any integrated health promotion program utilizing incentives.

23 Talking to CFOs: Activity-Based ROI TM By aligning incentives with specific activities and associated cost benefits, the message focuses on the Activity-based ROI TM that appeals to CFOs: Desired Activity Cost Benefit of Activity Because incentives are only distributed when an employee has completed a desired activity, there is ROI on an activity-by-activity basis. Incentive Value Activity-based ROI

24 Other Benefits: Total Rewards Strategy By rewarding employees for healthy behavior, incentives provide a positive link between activities that benefit the employee and employer: Employer Corporate strategy Rewards Dialogue Personal motivations Employee Total Rewards Business value

25 Sources Wellness Survey," conducted by the Deloitte Center for Health Solutions, a part of Deloitte & Touche USA LLP, and the ERISA Industry Committee (ERIC). Copyright 2005 Deloitte Development LLC. All rights reserved. 2. "Reducing Corporate Health Care Costs 2006 Survey," conducted by the Human Capital Practice of Deloitte Consulting LLP and the Deloitte Center for Health Solutions, a part of Deloitte & Touche USA LLP. Copyright 2006 Deloitte Development LLC. All rights reserved Incentive Federation Study of Motivation/Incentive Applications conducted by the Incentive Federation. Copyright 2005 Incentive Federation Inc. All rights reserved. 4. Wellness Programs conducted by the International Foundation of Employee Benefit Plans as part of the tenth publication in the Survey & Sample Series developed by the International Foundation. Copyright 2006 International Foundation of Employee Benefit Plans. All rights reserved. 5. American Express Incentive Services Study conducted by American Express Incentive Services LLC. Copyright 2006 American Express Incentive Services LLC. All rights reserved Study on the Use of Gift Cards conducted by Stored Value Systems, a division of Comdata Corporation and Ceridian Corporation. Copyright 2006 Stored Value Systems. All rights reserved. 7. IncentOne Incentive Trend Analysis 2005 conducted by IncentOne. Copyright 2006 IncentOne. All rights reserved.

26 Questions Copyright 2006 IncentOne. All rights reserved.