Wellness and Incentives Improve Health, Lower Costs

Through his academic training and work experience, Shivan Mehta, MD, MBA, understands better than most people the clinical and business aspects of medicine. Dr. Mehta, a practicing gastroenterologist, is also director of operations at the Penn Medicine Center for Health Care Innovation, which tests and analyzes new ideas in healthcare and searches for ways to improve patients’ health, quality of care, and safety.

For the past several months, Dr. Mehta has been an integral part of a partnership between Penn Medicine and Independence Blue Cross, a Philadelphia-based health insurance company. Both parties are finding ways to adapt to regulations included in the Patient Protection and Affordable Care Act (ACA) and are implementing or researching programs to help their members and patients.

Popular options for insurers are wellness and incentive programs intended to improve health and achieve cost savings. People who enroll and meet certain goals are provided with perks such as reductions in gym memberships or gift cards. According to Eric Steager, director of corporate and business development at Independence Blue Cross, some examples to consider are rewarding members for having better nutrition, exercising more, undergoing screening, and adhering to their medications.

Dr. Mehta and Mr. Steager, who spoke at the America’s Health Insurance Plans Consumer Experience Forum in Philadelphia in July, believe wellness and incentive programs could be effective, although the results are not clear and there are other concepts to be evaluated.

“We realize healthcare is changing,” Dr. Mehta said. “With this changing realm of healthcare, we have to change our business model, too.”

The changes are taking place at a time when insurers are shifting from selling almost exclusively to businesses to having more direct contact with individuals. By January, as mandated by the ACA, most people will be required to have health insurance or pay a penalty. Starting on October 1, individuals can purchase coverage on health insurance exchanges, which are online marketplaces where people can choose among several plans and view the benefits and costs of each option. The exchanges are intended to improve transparency and make it easier and more affordable to buy insurance.

The number of people who receive insurance coverage through their employers may soon decline significantly, as well. For example, only 23% of employers in 2011 were confident they would offer health benefits in 10 years, down from 73% of employers in 2007 and 57% of employers in 2009 that were asked the same question, according to a Towers Watson/National Business Group on Health Employer Survey of 512 companies released in March 2012.

The trend toward potentially millions of more individuals buying their own insurance has caught the attention of health plans. Mr. Steager said most people only think of their health insurers 3 or 4 times per year when they are hospitalized or visit their physicians. Now, they will need to be more informed, and insurers must be more proactive to keep people satisfied with their coverage or they may leave for a competitor.

“That is a fundamental change,” Mr. Steagar said. “We need to know our customers and provide them things that [keep insurers] top of mind, incentives being one of them.”

On a scale of 1 to 10, with 10 representing complete readiness for the exchanges and more consumer-centric models, health insurers in general rate around a 4, according to Brian Melanson, senior vice president at Digital Insurance, Inc. He said his company is comfortable with a model they have used for the past 50 years, in which they contract with intermediaries that sell plans to employers. Workers then typically only have a few choices and do not have any input on the benefits they receive.

“Selling through a group model has actually been pretty efficient from an insurer’s standpoint of distributing product,” Mr. Melanson said. “It is still complicated, but you basically sit down with an employee and say, ‘Here are your 2 options. Pick A or B.’”

With the passage of the ACA, companies must also group their employees into segments such as those who are close to retirement, those who are eligible for Medicaid, and those who are eligible for subsidies if they earn less than 400% of the federal poverty level.

Some insurers are implementing a strategy in which they sell plans online, via the telephone, and in person. Consumers can choose among the options, which makes it complicated for health plans.

“It is not a one-size-fits-all, cookie cutter solution anymore,” Mr. Melanson said.

The plans are becoming increasingly more consumer-friendly, though. Each year, employers spend more than $60 billion on wellness incentives that include premium reductions, rebates, and rewarding employees with gift cards or cash, according to Pamela Hall, chief operating officer of United Preference. Still, she said there are no data available to accurately determine the successes or failures of the programs. She cautioned that people who are provided with gift cards may choose to purchase a carton of cigarettes or junk food, which defeats the purpose of rewarding healthy behaviors.

“We have no idea what works,” Ms. Hall said.

Dr. Mehta cited a study published in Health Affairs [2013;32(3):477-485] that found people enrolled in a wellness program through BJC HealthCare in St. Louis, Missouri, had a 41% decrease in hospitalizations for 6 major conditions and a reduction in inpatient costs. However, they had similar increases in noninpatient costs compared with a group that did not participate in the program and did not have a decrease in other hospitalizations. The authors concluded that employers did not save money in the short term.

If Dr. Mehta could choose a program to implement for employees at Penn Medicine that would keep them healthy and save costs for the hospital, he would have them undergo screenings for high blood pressure, cholesterol, cervical cancer, colorectal cancer, and breast cancer. The US Preventive Services Task Force, an independent panel of primary care providers, has supported those screenings based on evidence from numerous studies. However, Dr. Mehta said the screening rates remain low even though the ACA mandates there can be no cost sharing for preventive screenings.

Dr. Mehta said he works in a “reactive” environment in which physicians take care of patients when they enter the hospital. In the future, with an increased emphasis on readmissions, bundled payments, and coordinated care, hospitals and other providers need to track patients when they are outside of the hospital setting. Providing them with incentives or rewards could help, but the providers and health plans need to conduct research to determine the most effective options.

“You first have to think about what you are incentivizing,” Dr. Mehta said. “Is it something that is important to you, to the patient, to the healthcare system? Is it something that is valuable? You have to make sure you are incentivizing the right thing…We think there is incredible promise in [incentives], but you have to be able to study these things, you have to be able to look at these things and make sure you apply them in the right setting.”

In June, Penn Medicine and Independence Blue Cross announced initiatives including a project funded by Medicare to improve medication adherence after heart attacks. Dr. Mehta said when patients are discharged from the hospital after a heart attack, Penn Medicine works with Independence Blue Cross to reach out to patients and provide services and incentives to ensure they take their medications. The goal is to reduce readmission rates.

“We could not do that on our own,” Dr. Mehta said. “We would not have access to the data about what happens to patients, how to reach out to the patients, how to engage with patients. It is something that has to be done in collaboration.”

If people are more compliant with their medications, Mr. Steager said the drug costs for companies will increase, but the overall costs should decrease. For example, he mentioned that people with chronic obstructive pulmonary disease who do not take their medications are at higher risk of having an attack and going to the emergency department, which is more expensive than the added costs of better drug compliance.

“I am pretty comfortable that there is value in providing these rewards on both the medical side and the plan side,” Mr. Steagar said. “They are important to helping our members or patients do what we are asking them to do.”

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