Be Healthy and Be Rewarded….Health Rewards Spreading To Every Corner of Healthcare
Ten years ago, financial rewards for healthy behavior was considered a “fringe” technique and in others was considered morally offensive. It was common to hear “we are not going to pay people for doing what they should be doing” or “Are we really going to reward people for not being healthy?” Today, health rewards has become a foundational technique in the healthcare community to drive behavior. The healthcare community has come to the realization that in the end, if everything comes down to driving patient and provider behavior, and rewards are a key part of driving that behavior, then rewards must be a foundational asset to drive results.
This culminated this summer with CMS allowing the expansion of the use of incentives in Medicare, an area in which it was felt by many that rewards would never be accepted. Earlier in 2014, Forbes outlined the top 5 “Megatrends” with the potential to transform healthcare, and rewards were #3 (Rewarding Better Health Outcomes and Quality and #4 (Health Information Technology Incentives)
In 2012, Todd Park, former CTO of HHS, commented, “The two biggest health trends will be data liberation and incentive reform.” It certainly seems that he was spot on. As the authors noted in “Think Like A Freak”, there is probably no quadrant of modern life in which financial incentives do not hold serious sway.” This trend has been growing for some time and has been supported by a series of legislative developments.
If the trend continues, there are two likely results:
- Consumers will expect every health plan and employer (and maybe even every health system) to have a universal reward program just like every airline, retailer, bank and hotel
Perhaps most importantly, consumers want them and providers need them. From the consumer perspective, they are willing to take healthy actions if they are rewarded:
- 96% would change their health behavior if they were rewarded (Welltok Survey, 2014)
- 75% would have their blood pressure checked (Health and Human Service Survey, 2013)
- 73% would lose weight (Harris Interactive Survey, 2013)
- 68% would have blood sugar or cholesterol checks (Harris Interactive Survey, 2013)
- 51% would have their lifestyle choices scrutinized (Harris Interactive Survey, 2013)
- 51% would use a regimen to lose weight or control diabetes (Harris Interactive Survey, 2013)
- 38% would follow a diet to lower blood pressure or cholesterol (Harris Interactive Survey, 2013)
- 65% said the most important thing that a pharmaceutical company can provide to consumers is rewards (Accenture, 2014)
Perhaps most interestingly, 49% said that they would not only undergo a genetic test but would allow those results to be shared with their health plan for a reward. Imagine that.
This article outlines the prevalence of rewards throughout the healthcare community:
- 74 percent plan to use incentives in 2014, up from 57 percent in 2009
- 93 percent plan to expand funding over the next three to five years
- 37 percent indicated their program will include spouses and domestic partners in 2014
- The average incentive value per employee has grown to $693 in 2015 from $594 in 2014 (and from $260 in 2009) for large employers and to $894 in 2015 from $717 in 2014 for jumbo (over 20,000 employees) employers.
- The average incentive value per spouse is $530, more than $100 higher than the average of $420 in 2010 and $611 for jumbo (over 20,000 employees) employers.
- 41 percent are aligning incentives to outcomes.
||Virtually all health plans have some element of a consumer rewards program.
- Nationals: each of United Healthcare, Cigna, Aetna, Kaiser Permanente and Humana have health reward programs such as:
- Blue Cross Blue Shield: each BCBS plan offers reward programs, although many are limited to offerings for employer groups.
- 68 percent of consumers would wear wearables streaming data in exchange for a break on their insurance premiums, according to a PWC report entitled “The Wearable Future.”
- 50% of consumers would share personal information as long as they receive rewards . “Wearables Privacy Report” by Zeno and London’s Imperial College Business School http://goo.gl/b4czk2
- On May 23, 2014, CMS revamped regulations to allow more flexibility to reward Medicare recipients for healthy behavior:
- Removed $50 per year and $15 per action dollar limits
- Expanded types of rewardable behaviors
- Allow reward for steps versus only the completion of a program
- Allow targeting a specific disease, condition or preventive service
See CMS Long-Awaited Expansion of Medicare Rewards Adds Key Tool to Drive Behavior Change http://dld.bz/dxYNg
- Retailers: On October 3, CMS expanded the use of rewards for Medicare beneficiaries through retailers. CMS proposed new safe harbors to the anti-kickback program would open the door for retailers to allow customers to receive coupons and reward benefits under loyalty programs when purchasing drugs and other services covered by federal health care programs.
- Section 4108 of the ACA created the Medicaid Incentives for the Prevention of Chronic Diseases (“MIPCD”) program. The grant program provided a total of $85 million over five years to ten states to test the effectiveness of providing incentives directly to Medicaid beneficiaries who participate in prevention programs and change their health risks and outcomes by adopting healthy behaviors.
- In September 2011, the Center for Medicare and Medicaid Innovation awarded ten states demonstration grants: California, Connecticut, Hawaii, Minnesota, Montana, Nevada, New Hampshire, New York, Texas, and Wisconsin. An interim evaluation was conducted in November 2013, and a final evaluation will be completed by July 2016. http://www.cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2011-Fact-sheets-items/2011-09-13.html
- US retailers such as Walgreens have begun to expand their reward programs beyond merely purchasing products to rewarding for behaviors tied to a healthy lifestyle including physical activity, preventative visits, flu shots and other health behaviors. Walgreens Balance Rewards programs has 110 million members and has recently added partners such as WebMD and MDLive into its suite of behaviors.
||There are many reward and pay-for-performance programs for providers. Here are a few notable ones:
- The Medicare and Medicaid Electronic Health Care Record (EHR) Incentive Programs (2011) provide incentive payments to eligible providers as they demonstrate meaningful use of certified EHR technology. The programs originally provided for $44,000 under Medicare and $63,750 under Medicaid per year and begin to implement penalties in 2015.
- The Medicare Improvements for Patients and Providers Act of 2008 (“MIPPA”) created a new incentive program for eligible professionals who are successful electronic prescribers (E-Prescribers). This program came to be known as the “E-Prescribing Incentive Program” and provided for incentive payments to qualifying physicians of 2 percent for 2009 – 2010, 1 percent for 2011 – 2012 and 0.5 percent for 2013. The percentages were of the allowed charges for all such Physician Fee Schedule (PFS) covered professional services furnished by the eligible professional during the reporting period. Then, starting in 2012, if the eligible professional was not a successful E-Prescriber for the year, incentive penalties of the following amounts would be assessed: 1.0 percent for 2012, .5 percent for 2013, and 2.0 percent for 2014 and each subsequent year.
- The Physician Quality Reporting System (Physician Quality Reporting or PQRS) formerly known as the Physician Quality Reporting Initiative (PQRI). PQRS is a reporting program that uses a combination of incentive payments and payment adjustments to promote reporting of quality information by eligible professionals (EPs). The program provides an incentive payment to practices with EPs. EPs satisfactorily report data on quality measures for covered Physician Fee Schedule (PFS) services furnished to Medicare Part B Fee-for-Service (FFS) beneficiaries. Beginning in 2015, the program also applies a payment adjustment to EPs who do not satisfactorily report data on quality measures for covered professional services. The PQRS program has roots in the quality improvement initiatives of 2005—and earlier movements to streamline and incentivize federally funded systems. In 2006, the Tax Relief and Health Care Act required the establishment of a quality measure reporting system for physicians to highlight evidence-based practice. The next year, the program was modified as a result of the SCHIP Extension Act. In the establishment stage since 2007, an incentive premium was available to all eligible professionals reporting, regardless of demonstrated improvement. However, since 2011, reporting 0% on any measure disqualifies participants from obtaining the incentive. In 2012, the program was changed from PQRI (Initiative) to the PQRS—Physician Quality Reporting System. The Affordable Care Act further expanded and deepened quality measure data reporting programs.
- Hospitals are starting to roll out consumer directed reward programs such as the Wealth from Health program from Jersey City Medical Center. http://dld.bz/dxfd9
- When consumers were asked “Which of the following services would you like to receive from a pharmaceutical company?” rewards topped the list at 65% percent compared to 53% for product information, and 51% for financial assistance. http://dld.bz/dvUmm
||The UK has expanded the use of incentives throughout its healthcare community:
- NHS Weight Loss Reward Program: In October 2014, the National Health Service announced that it was launching a program to reward citizens for losing weight. Consumers who lose weight are rewarded with cash or shopping vouchers and employers receive tax benefits/funding to set up weight or exercise classes.
- UK Insurers: UK insurers are using loyalty programs to retain customers. Examples include:
- Max Bupa Health: its Heartbeat policy has two loyalty options — increasing the sum insured every year or using loyalty points to buy products and services from partners. The options are available irrespective of the customer’s claims history.
- Cigna: Cigna TTK has launched ‘healthy reward points’, ‘health maintenance benefits’ and ‘proactive living programme’ in February. With every premium paid, a customer accumulates ‘healthy reward points’ which the policyholder can reimburse against future premiums. http://dld.bz/dxBUn
- UK Employers: UK employers are starting to deploy reward programs tied to their wellness programs. http://dld.bz/dxMN4
- In addition to the UK, countries around the world including Australia, South Africa, Canada, Japan, and China are deploying various types of health reward programs. http://goo.gl/XPvJ4b
As Accenture noted “The value of incentives, in particular, is clear in the way progressive healthcare plan providers are structuring their products.” The healthcare community understands that driving consumer and provider behavior is the cornerstone to reducing cost, improving health and creating lasting connections with these two audiences. Rewards and incentives in healthcare continue to grow and demand a level of discipline, rigor and experience to optimize their use. The day of a national health reward law may not be far away.