A recent study indicates that employers can save money on healthcare by paying incentives to their employees who maintain healthy lifestyles, and advocates of consumer-directed health plans say the study supports the notion that incentives, when coupled with the plans, boost savings for employers and workers.
Employee enrollment in such consumer-based plans is still low, with only 8 percent of Americans participating, said the study, conducted by Watson Wyatt Worldwide and the National Business Group on Health. However, employers that implement the plans and provide employee incentives are more successful at controlling increases in healthcare costs, the study's authors said.
The first step in achieving healthcare savings is getting employees to select high-deductible, low-premium plans, said Michael Dermer, president and chief executive of IncentOne, a group that provides incentive services to employers. If employees then are rewarded for maintaining healthy lifestyles, the costs for both the employers and employees drop.
"The change in cost for the incentives vs. the cost of the treatment is significant," Dermer said.
Without incentives, employees who are in consumer-directed health plans and have health savings accounts typically don't invest their money in steps that might improve their health, Dermer said. "You're much more likely to spend that money when something arises," he said. "That's where incentives play a critical part."
Jim Dean, senior manager in the insurance practice of consulting firm BearingPoint, stressed the importance of employer participation in offering rewards in tandem with consumer-directed health plans.
"Carriers have mostly had relationships with employers, not with consumers," Dean said. "The development of overall rewards programs is something the carriers don't have experience in yet."
Many consumer-directed health plans are including preventative care requirements upfront, said Kirsten Trusko, senior manager of BearingPoint's banking practice. "If you're going to have a strong plan, adding preventative care is much less expensive than when people don't get it."
Employee health incentives should reduce overall costs regardless of whether an employee is enrolled in a CDHP or traditional plan, Dermer said.
"At the end of the day, 80 percent of the cost is driven by chronic conditions, and those conditions are impacted by daily behavior," Dermer said. "If I got a consumer-directed health plan and I was still infinitely unhealthy, I didn't save my employer any money."