Workforce.com

Trying to Hit a Moving Target

July 26, 2009
The same strategies that helped supersize the American workforce are being used to slim it down.

Employers and the health-care management companies they hire are using data on consumer behavior to cost effectively identify employees with health risks and craft a message that can get them to change their unhealthy ways.

"This is what the tobacco and food companies do to us all day long," said Betsy Barbeau, senior vice president for health and wellness at Boston-based Health Dialog Services Corp., a health-care management and data analytics company. "They don't just think about age and gender; they know what else we buy and what our habits may be, and they use [the knowledge] to create advertising that gets us to buy their product. We are trying to take Madison Avenue sophistication about engaging the consumer market and [use] it to engage our members and our clients."

Hit by rising health-care costs, employers are increasingly turning to wellness programs to try to improve employees’ health. Yet the corporate return on investment in wellness programs remains elusive.

Just as hard is ascertaining whether the health-care dollars spent actually do improve people's health.

One problem may be the way those dollars are spent. A recent survey by the National Association of Manufacturing and the ERISA Industry Council of 242 companies showed that half of employers with wellness programs use incentives, most commonly in the form of premium reductions, cash and bonuses, health-account contributions and gift cards.

Many employers use incentives to encourage employees to fill out health-risk assessments, which are questionnaires about health habits and medical conditions. The assessments are used to determine employee health risks, which are in turn used to steer people into a wellness program that can improve their health.

While a lot of money and effort are going toward getting people into wellness programs, little is done to keep them there.

"The most serious challenge reported for health management is maintaining employee motivation over time," the survey said. "This was true both for companies using incentives and for companies not using incentives."

"It's not that [incentives] don’t work, it's just that behavior change is really hard," said LuAnn Heinen, vice president at the National Business Group on Health in Washington. "It's really important to us and our work to understand what will be effective, because a lot of employers are putting a lot of investment and attention into this issue."

Health experts believe that companies may rely too heavily on financial incentives to get people to enroll in programs, while doing little to keep them involved long enough to change their behavior. That, after all, is the ultimate measure of a program’s success.

"We're seeing people get involved in disease-management programs, but they drop out very soon," said Stephanie Pronk, vice president of health-management solutions at Ingenix Inc., an Eden Prairie, Minn.-based health-analytics company and a subsidiary of UnitedHealth Group Inc. "If you have a lot of dropouts, you won't see any return on investment."

A recent Hewitt Associates survey of 248 employers showed that although more than half offered smoking-cessation and weight-loss programs, fewer than 5% of employees who were eligible to enroll actually participated.

Now, companies are trying a new tack to change people’s behavior: treating employees the way a marketer would. "As a breed of animals, we don’t work when it’s just the stick or the carrot," said Emma Gilding, president of In:Site, a cultural anthropology think tank that is part of Omnicom Inc., a New York-based marketing company. "We need a complex system of encouragement, more than just 'It'll cost you more or less.'"

People know they need to lose weight or quit smoking. Although monetary incentives can pique interest, they often do not sustain engagement. When used wisely, marketing tools, which look at how people actually behave rather than how they should behave, can tap into a person’s internal logic—their decision-making process—to steer them into wellness programs that help them live healthier lifestyles.

The first step is to understand the audience as individuals, not just as people with health risks, said Ms. Gilding.

Health-data companies such as Health Dialog and Ingenix say their methods offer a solution. Health Dialog said it has developed a predictive model that uses health-claims data in combination with demographic “psychographic data,” as Ms. Barbeau put it, to capture people's attitudes.

The model identifies those likely to be smokers, overweight or at risk of heart disease and other health problems. Among Health Dialog's first clients for this new service is health insurance company Health Net, which will use it on its 2.5 million members. The data could make it unnecessary for payers to use precious health-care dollars on incentives to get employees to fill out health-risk assessments.

"We know blue-collar workers smoke at twice the rate of the general population," said Ms. Barbeau. "We don’t need an HRA to tell us that."

Data analysis tool
Ingenix said it has developed a data analysis tool that helps companies more effectively communicate with employees in a way that motivates them to improve their lifestyles. Consumer data is not about specific individuals, but is gathered down to the ZIP code plus-four area, which equals a group of about 20 houses. From that and other data sets, marketers glean information, for example, on the neighborhood a person lives in, the value of his house, whether he buys sports equipment, whether he eats a lot of fast food and the kind of car he drives.

Information about lifestyle can say as much about what motivates people as it can define their risk of having a heart attack. Neither Health Dialog nor Ingenix would disclose its methods, but marketing and health-care experts said the thousands of consumer data sets that marketers have developed can help paint an accurate portrait of how a person behaves. Marketers have sliced and diced Americans into groups such as “blue-collar backbone” and “affluent suburbia,” each with its own messaging.

"You work hard. You deserve to take care of yourself" might be an example of a message for those with pickup trucks, compared with "You deserve this. Take care of yourself today" for people who drive Volvos.

Understanding the audience helps not only to identify at-risk employees but also helps to craft an incentive that speaks to a person’s needs, said Ms. Pronk.

When Ingenix tested its tool, which is not quite a year old, Ms. Pronk said employees stayed involved in their employer’s wellness program longer.

RedBrick Health Inc., a client of Ingenix, has used the marketing data to more effectively manage wellness programs.

Using consumer data such as what magazines people subscribe to, for example, RedBrick can customize a message that gets an employee’s attention, said Kyle Rolfing, RedBrick president.

"We have tried incentives; we’re now trying personalized messaging," he said. "You need to do the combination of them to have real and sustained change."

One of RedBrick’s clients is Welch Allyn Inc., a manufacturer of medical diagnostics in Skaneateles Falls, N.Y., with 1,500 employees and dependents. Welch Allyn has had many wellness programs over the past 15 years: online health screening, free flu shots, mammograms, telephone counseling, weight-loss programs and a fitness center. All of them were operated independently by different vendors; none shared data with one another.

Before RedBrick took over the management of the wellness programs a year ago, the company offered $300 off its health premiums to employees who filled out a health-risk assessment.

Jeff Viviano, senior manager for HR operations and technology, said the incentive was high enough to get people to fill out the assessment, but the company had no idea whether it led them to change their behavior.

Now the company has divided the $300 differently and set about the harder task of changing people’s lifestyles.

The company still pays employees to complete the HRA, but the amount they receive has dropped to $100. This may mean fewer Welch Allyn employees will fill out an HRA this year, Mr. Viviano said.

But those who do may be drawn into wellness programs by the lure of a new cash incentive—money that formerly was used to get people to fill out the health-risk assessment.

Marketing data help RedBrick communicate a message about a person’s health that motivates them. “If a person subscribes to Golf magazine, we can customize messaging to use golf to get their attention,” Mr. Rolfing said.

Mr. Rolfing said the company's approach combines three things: communicating with the employee in a way that speaks to their interests; customizing health choices that meet their personal needs and interests; and tying how much a person pays for health premiums based on their participation in a wellness program.

"For us, there's not an unlimited pool of dollars to put into incentives," Mr. Viviano said. "So clearly, understanding consumer preference is important going forward, though we don’t yet have any evidence to see whether it’s working."

Eventually Welch Allyn wants to pay people for reaching or maintaining their health goals. Getting people to lead healthier lives, after all, is the ultimate goal.

However, it also is exactly what unnerves many employers, who worry about becoming too paternalistic toward employees or crossing legal lines.

"Because incentives is such a new area, the liabilities on these things is just not completely clear," said Tiffani Hiudt, an attorney in Atlanta for Fisher & Phillips LLP.

Ms. Hiudt said offering incentives simply for participating carries little legal risk. And the Health Insurance Portability and Accountability Act provides guidelines to employers offering incentives based on achievements, with many states offering their own laws on how restrictive employers can be. She advises employers who tie an incentive to a health goal to offer all employees the possibility of attaining a goal that is within their reach.

The convenience factor
The underlying lesson is that wellness programs are more effective if they "meet the consumer where they’re at," Ms. Pronk said.

Often that means designing programs that are convenient. Developing a workplace culture that supports healthy living is a relatively inexpensive first place to start, said Patricia Benson, director of the health-management program at the University of Louisville in Kentucky.

The school is working with its food vendor to make healthy food less expensive and easier to buy. Also, the school’s president hosts weekly jogs. If you want his ear, you have to run alongside him. Half of the school’s 6,000 employees participate in a wellness program.

"It's got to be convenient," Ms. Benson said.

Knowing that people stick to lifestyle changes when they are supported by peers with similar interests, General Mills Inc. in Minneapolis helps employees start fitness groups so they can work out together. The company uses its annual sales meeting to host a health fair where people get checked for blood pressure, cholesterol and other basic measures of health.

Rather than focus on measuring ROI, the company measures whether people’s health has improved. Tim Crimmins, a doctor who is the company’s vice president of health, safety and environment, developed a number that reflects each person’s health risk. Each year the company has seen its number go down on average. That means the company’s employees are, on the whole, healthier, said company spokeswoman Heidi Geller.

Where employers can go wrong is putting too much emphasis on return on investment, when making simple, cost-effective changes in the workplace might achieve the goal they’re really after: lowering their cost of health care.

One problem, researchers say, is that calculating ROI is not as simple as many health vendors make it seem. It requires a control group, which means some employees would not have access to wellness programs. And that is something employers are unwilling to do.

"It's hard to calculate ROI on anything," said Ron Goetzel, a researcher at Thomson Reuters Corp. and the Rollins School of Public health at Emory University in Atlanta. "Human behavior is so much more complicated than a machine."

Crain's Benefits Outlook Online, November 2008