At the Margins

At Cleveland Clinic, incenting healthier employees also facilitates a healthier bottom line

by Sarah Gabriel

Over the past seven years, the Cleveland Clinic’s employees have collectively lost 250,000 pounds, lowered their blood pressure, and decreased smoking.

How? The Clinic incented employee participation in wellness programs using tiered insurance premiums and provided a campus to facilitate healthier lifestyles. Since then, they've realized  a substantial rebasing of employee benefits costs and a significantly healthier employee population.

Segmenting by health status, participation in wellness program

In 2005, the Cleveland Clinic increased health insurance premiums by 21% for all employees, but adjusted premium increases based on an individual employee’s health status and participation in wellness activities.

Here are the results. Most strikingly, employees who were chronically ill and met their health goals actually saw their insurance premiums decrease by 4%.

To help its employees adopt healthier lifestyles, Cleveland Clinic also undertook a major campus redesign effort. By removing sugary sodas from vending machines, eliminating trans-fat from cafeteria food, and offering free fitness and stress management classes on campus, they facilitated adoption of healthy habits.

A popular strategy for many employers

The Cleveland Clinic’s goal was to achieve sustainable savings by increasing employee cost exposure and providing additional incentives to minimize avoidable utilization. In essence, this benefits strategy better distributes the responsibility for health costs between the health system and its employees.

Eighty-three percent of employers now offer their employees incentives for participating in wellness programs, according to a recent survey by Aon Hewitt of 800 large and mid-size employers.

Although in many cases the program’s goal is to produce a healthier and more engaged employee population, the Cleveland Clinic’s example demonstrates that incenting employee participation in wellness programs and healthier lifestyles also makes good financial sense. With labor constituting almost 60% of providers’ operating expenses, finding sustainable strategies for producing savings on employee benefits is critical to financial viability.

Learn more

To learn more about value-based benefits and other strategies for realizing sustainable savings, Health Care Advisory Board members can read our study, The Sustainable Acute Care Enterprise.

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