Pareto-Optimal Wellness Incentives or Big Bad Wolf

The argument that wellness incentives are a "wolf in sheep's clothing" to pass along premium increases for pre-existing conditions assumes that the health plan, government, or employer (the "third party payer") doesn't want the covered individual to meet the wellness targets. The corporate wellness programs surveyed in the recent Washington Post article, however, set fairly low bars for employees to meet. This seems to indicate that incentives drive third party payers to choose wellness targets that are achievable. Looking at UnitedHealthcare’s Vital Measures program literature, for example, “the benchmarks for each category vary, but in all cases are easier to achieve than those published by the National Institutes of Health.” See also the Healthy Blue from Blue Care Network.


When the government pays, the benchmarks have tended not to be outcomes-based. Florida's Medicaid reform efforts have entailed:

• a $ 15 credit for six months of success in an alcohol or drug treatment program, a smoking cessation program, a weight loss program and an exercise program  
• two $ 15 credits for keeping all of his primary care appointments 
• one $ 25 credit for a colorectal screening per year
• up to $ 125 in credits per year, and then they may use those credits to purchase first aid supplies, cough and cold medication, and other items at any Medicaid participating pharmacy.

The move from "pre-existing condition" to "wellness incentive" emphasizes personal responsibility and the possibility for future improvement. Certainly there will be some people who try very hard and cannot hit the wellness outcomes required for the premium discount, but they are likely in the minority. Moreover, in many cases the behavior of the majority is positively impacted by a shift towards wellness incentives in plan design.

Employees who bear direct increased financial costs due to a wellness incentives can still end up in a better overall financial position. A number of options exist for a Pareto optimal outcome, where the gains from a change to the system can be used to compensate those harmed in the system. Failure to achieve a wellness target, for example, could function like a health risk assessment to trigger more coordination of care through a disease management program. If a group plan were designed so that some of the savings from the healthy behaviors were used to pay for disease management for the less healthy, everyone would be better off. I don't see requirements for this in current versions of the legislation, but those concerned with system fairness might pursue this approach.

Aside from concerns about system fairness, wellness plans may wish to offer disease management services as a “reasonable accommodation” in order to comply with the Americans with Disabilities Act (“ADA”). Wellness programs that target employees with chronic conditions (often the cost-driver employees) will inherently face legal requirements under existing federal ADA regulations and local analogues. Consider the individual with diabetes, who is often the focus of a wellness plan. Diabetes is sometimes a disability under the ADA if, for example, the individual proves that she was substantially limited in the major life activity of eating because of a severely restrictive and highly demanding diabetes treatment plan. Fraser v. Goodale, 342 F.3d 1032 (9th Cir. 2003). Or consider the two municipalities in California which prohibit employment discrimination on account of physical appearance, which lends some protections to overweight employees. Santa Cruz, Cal., Or. 92-11 § 1(9.83.010) (1992); City & County of San Francisco, Human Rights Commission, Compliance Guidelines to Prohibit Weight and Height Discrimination (2001), http://www.naafa.org/fatf/sf_height_weight_ guidelines.pdf.

Taking a health risk assessment arguably places the same burden on every employee, but the individualized health goals often will be much more arduous for an individual with diabetes. The net result: an employer is treating an employee with a disability differently than other employees. Thus the logic of the wellness plan offering disease management services which serve as the functional equivalent of a "reasonable accommodation".

Audacious Goals at Health 2.0: rounded tabs, perfect shading

What is Health 2.0?

After spending 14 hours at the Health 2.0 conference in San Francisco today, the pessimistic answer is that Health 2.0 is rounded corners and perfect shading. Many of the web technologies were accessed through a browser, so I started to get browser navigation fatigue.

Health 2.0, ultimately, is more audacious. My favorite proposition was by a Kaiser manager brainstorming a portable device that would assist patients with maintaining healthy behaviors. The use case described was a cross between a mood ring and LiveStrong bracelet. As described, such wristband would be deployed to a clinically obese patient, providing biofeedback and behavioral support. In this blog post I go a couple more steps to describe some of the possibilities that this could entail.

Device activation could occur by the wearer switching it on, or by an automatic trigger based on a biological indicator of increased risk of harmful behavior. If I start craving candy, for example, I could first switch on the device on my double-tapping or twisting the bracelet. Alternatively, a red LED on the wristband could take a glucose reading before I was conscious of wanting sugar.

In the scenario of automatic activation based on biological monitoring, the wristband could simply change colors to bring the wearer’s attention to the existence of a risk factor. Additionally, the device could provide various forms of explicit support. First, it could provide the opportunity for encouraging tweets from a community of peers in a weight loss program. Second, a brief message could be drawn from a database of tailored suggestions. Third, the message could come from a professional counselor or physician, likely segueing into a more traditional means of doctor-patient communication.

As an alternative, or in conjunction with these responses from the device, an opportunity would exist for the wearer to take action in response to the messaging from the device. A symbolic action to “take control” of the situation would be simply switching the device from red to green, an outward sign of the patient’s commitment and coping skill. Monitoring could be tied to whether or not such an action occurred; if the device was not acted upon, cell phone and other email alerts could be triggered to the patient and other stakeholders.

Such a device could have broad use for all manner of behavioral problems, not just behavioral problems tied to a current medical problem. Robust federal incentives for employer-based wellness programs, including meaningful incentives to participating individuals, could make these high tech mood rings a popular engagement tool for EAP and wellness programs.