Industry Voices: John Harris

Incentives and the Employee Health Management Industry

Over the years, the field of employee health management has learned there are a number of virtues and pitfalls to using incentives to encourage people to live healthy lifestyles. The reality is that we still have a lot to learn.

By definition, an incentive is an extrinsic reward that is provided to a person until such time that the value to the recipient is internalized (intrinsic value) and thus, sustained. When it comes to health, many employers use incentives in the hopes that their employees will internalize the need to be healthy and achieve lasting behavior change, which ultimately creates a healthier and more productive work force with lower health care costs.

While there are many incentive approaches being used, what do we really know about the effectiveness at present? First, we know they clearly drive participation in health risk assessments (HRAs), coaching, health promotion classes, and other similar offerings. However, very few studies have shown that incentives actually drive sustainable behavior change, improved health, or cost outcomes. We know that incentives are most successful when they are combined with a work culture that is supportive of employee well-being and when they are part of a wider and effective employee communications strategy. In fact, studies have shown the better the culture and communications effort, the smaller the incentive required to drive higher participation levels. We also know that on average, the value of the incentives provided is going up each year, that the bigger the company the bigger the incentive, and that more incentive programs are being delivered through health insurance premium reductions than any other method. 

So where do we go from here? When you step back and look at it, it’s easy to see why incentives have become a source of lively debate among employee health management professionals. Some professionals believe that the practice of taking health care premiums from people who take care of themselves to subsidize those who don’t has gone far enough. They advocate “stick” type incentives to penalize people who do not take care of themselves to offset this balance.

To the other extreme, some professionals believe that laws and regulations should be put in place to ban or restrict the use of incentives all together in an effort to protect people who are already chronically ill. Others are not opposed to incentives but are concerned that the widespread use of them is causing employees to feel a sense of entitlement for doing what is already in their best interest, wearing away the opportunity to drive intrinsic motivation. 

Employers need to be more aware of the pros and cons of incentive programs so they can make smart decisions about what will work best for their people and their organization. There is not a one-size-fits-all solution. They must take into consideration company culture, needs, the stage of their employee health management program development, the communications strategy they will use, and their style of doing business. 

When employers have the latitude to use the incentive approach that is best for them, understand the pros and cons of different approaches, and use incentives as part of a best-practice employee health management program, effective but reasonable experimentation will occur allowing the field to learn more. This will advance the understanding of how to best produce sustainable behavior change, and improve program outcomes,  resulting in a healthier, less costly, and more productive workforce.