QUALITY: Is Safeway's The Best Way to Promote Wellness

Residents of D.C. love to talk about their Safeways. Apparently, so do Members of Congress.

During the mark up of Senate Finance Committee's bill in September, Senators John Ensign (R-NV) and Tom Carper (D-DE) introduced an amendment that increased the financial rewards companies could offer their workers for meeting certain health goals and criteria such as losing weight, lowering their cholesterol or quitting smoking. Pushing hard for this change, were companies like Safeway which puts a great deal of stock in their efforts to help manage and improve their employee's health, as explained this week in by the LA Times:

Nationwide, 25,000 nonunion employees in Safeway's health insurance plan are eligible for the premium-reduction program, most of them in California. The company says that 74% have signed up.

Once a year, participants submit to tests of four health risk factors: smoking, obesity, blood pressure and cholesterol. If they pass all four, they receive a $780 annual discount, which is 20% of the total cost of their insurance. If they do not pass initially but make progress in some areas -- quitting smoking or losing 10% of their weight -- they can get a premium rebate.

After making several changes in the health policy offered to nonunion workers, Burd said, the company's healthcare costs have "flat-lined" over the last four years, while other companies' costs have gone up nearly 40% on average.

The Ensign/Carper amendment passed by a vote of 18-4. If enacted, it would raise the maximum discounts employers could offer their employees from 20 to 30 percent of insurance premiums and give HHS the authority to raise that threshold to 50 percent if it so chooses.

For some the amendment is common sense, especially given the lingering concerns about health reform's ability to control costs. Yet, as the LA Time's notes, not everyone is happy with the potential changes. The American Cancer Society, the American Heart Association, and advocacy groups worry that such incentives will become another way to discriminate against the sick and unfit while cherry picking the healthy.

Both sides have a point. On one hand it seems reasonable for companies to use incentives to encourage health and discourage behaviors which impose costs on others. Charging smokers more seems fair -- as long as they are provided with appropriate cessatiohn progams and encouragement to quit. On other issues, however, such as obesity or cholesterol it may be more difficult to separate the effects of personal choices from genetic dispositions.

The key is balance. As with an individual mandate, it's not just the size of the penalties that matter. As Ken Thorpe, an expert on chronic disease, writes on the National Journal's Health Care Experts blog:

While "sticks" can and are effective in changing behavior, carrots work best, which is the experience of most employers who lead in implementing successful wellness programs. ... [E]mployers are the best place to implement wellness programs, and in doing so, companies must have flexibility to carry them out. What works for a large company like Johnson & Johnson with over 80,000 employees around the world will not work for 12 person printing company with one office.

Kentucky's Employees Health Plan for state workers has had impressive results increasing enrollment in its wellness and chronic disease programs using relatively small incentives like gift cards for Target and Best Buy.

Changing behavior is tough. It requires both carrots and sticks, and a measured approach that is flexible enough to learn from what works and what doesn't. As New America's Director of Health Policy Len Nichols has written, "Compassion demands we present alternatives and limit the penalties, but basic fairness says it is ok to expect effort in exchange for cross-subsidies from the community."