Carrots and sticks: Impact of an incentive disincentive employee flexible credit benefit plan on health status and medical costs

Purpose. Employee wellness programs aim to assist in controlling employer c osts by improving the health status and fitness of employees, potentially i ncreasing productivity, decreasing absenteeism, and reducing medical claims . Most such programs offer no disincentive for nonparticipation. We evaluat ed an incentive/disincentive program initiated by a large teaching hospital in western Michigan. Methods. The HealthPlus Health Quotient program is an incentive/disincentiv e approach to health promotion. The employer's contribution to the cafeteri a plan benefit package is adjusted based on results of an annual appraisal of serum cholesterol, blood pressure, tobacco use, body fat, physical fitne ss, motor vehicle safety, nutrition, and alcohol consumption. The adjustmen t (health quotient [HQ]) can range from -$25 to +$25 per pay period. We exa mined whether appraised health improved between 1993 and 1996 and whether t he HQ predicted medical claims. Results. Mean HQ increased slightly (+$0.47 per pay period in 1993 to +$0.8 9 per pay period in 1996). Individuals with HQs of less than -$10 pay per p eriod incurred approximately twice the medical claims of the other groups ( test for linear trend, p = .003). After adjustment, medical claims of emplo yees in the worst category (HQ < -$10 per pay period) were $1078 (95% confi dence interval $429-$1728) greater than those for the neutral (HQ between - $2 and +$2 per pay period) category. A decrease in HQ of at least $6 per pa y period from 1993 to 1995 was associated with $956 (95% confidence interva l $264-$1647) greater costs in 1996 than was a stable HQ. Conclusions. The HealthPlus Health Quotient program is starting to yield be nefits. Most employees are impacted minimally, but savings are accruing to the employer from reductions in medical claims paid and in days lost to ill ness and disability.