Joint Report of the Councils on Medical Service and Science and Public Health (A-06)

Reward-based Incentive Programs for Healthy Lifestyles

Summary

Health care expenditures continue to increase and chronic diseases continue to impose an increasing burden on the American health care system.  In an effort to improve overall health and reduce health care costs, employers and third-party payers are seeking ways to influence individual behavior and the lifestyle factors that contribute to increased risk of chronic disease.   One growing trend is the development of reward-based incentive programs that encourage the adoption of healthy behaviors.  This report briefly evaluates the impact of key risk factors for chronic disease; provides examples of employer-sponsored, government-sponsored, and health plan incentive programs; summarizes relevant American Medical Association policy; and offers a set of guiding principles that could serve as a framework in developing reward-based incentive programs designed to promote healthy lifestyles.   

Health behaviors and modifiable risk factors have significant and direct effects on health outcomes.  Up to 70% of the nation’s premature deaths are linked with unhealthy diet, overweight and obesity, physical inactivity, and tobacco and alcohol use.  The major causes of mortality in the United States remain heart disease, cancer, stroke, chronic lower respiratory disease, and diabetes.  Providing incentives to modify unhealthy behaviors, therefore, is a potentially valuable approach to improving the health status of the nation.

According to Hewitt Associates, about 41% of companies offer incentives designed to promote healthy behavior among their employees.  These incentives range from distributing educational materials and hosting health fairs to more personalized and consistent programs such as completion of health assessments and participation in individualized health management programs.  Like employers, health insurers are also seeking ways to promote member health and reduce cost.  Many health plans have intensified efforts to provide healthy living and disease management information to their enrollees, and often have extensive information on their Web sites aimed at helping members take a more active role in staying healthy. 

Government programs have been slower to experiment with reward-based health incentive programs than the private sector.  However, state Medicaid programs are one area in which governments are cautiously beginning to test incentive programs that link “rewards” to individual behaviors.  Florida and Iowa have received waivers to experiment with healthy behavior incentives in their Medicaid programs, and, at the time this report was written, other states including Kentucky, Michigan, Missouri, and West Virginia were either awaiting waiver approvals or developing waiver requests.

Because most reward-based lifestyle incentive programs are relatively new, or still in the pilot phase, limited information is available about their effectiveness in reducing health care costs and improving health outcomes for participants.  Nevertheless, given that the implementation of reward-based incentive programs seems to be a growing trend in many sectors of the economy, the Councils believe it would be beneficial to identify key elements of a strong incentive program.  Accordingly, this report recommends adoption of a set of guidelines that could be used in guiding the development and implementation of programs designed to encourage healthy lifestyles.

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Also see the AMA's  Promoting healthy lifestyles Web site