CVS Caremark discovered last week that no good deed goes unpunished when its decision to provide financial incentives for employees to get health screenings turned into a media tempest.
The Rhode Island-based pharmacy chain touched off a screech-fest among privacy advocates by asking its 200,000 employees to have a doctor determine their weight, height, body fat, blood pressure and lipid levels. The idea is to help employees take responsibility for improving their health and managing health-associated costs. The company pays for the screening and employees save $600 per year in health insurance premiums.
The company says it is trying to help employees keep their health insurance premiums down now and become proactive about their health, so they can avoid significant costs down the road. The screening is voluntary and employee information will not be shared with the company. Personal results have no bearing on insurance eligibility or employment status.
CVS Caremark is anything but an outlier on employee health. Seventy-nine percent of large employers nationally and companies of all sizes here in Massachusetts are addressing rising health care costs by giving employees the information they need to be informed health-care consumers. Massachusetts will soon offer a 25 percent tax credit to employers who maintain wellness programs, and employers throughout the commonwealth are buying plans that provide financial incentives to workers who seek high quality care at lower-cost community facilities.
A growing number of health plans also provide discounts to people who do not smoke.
All of these changes are driven by the belief that consumers who make good lifestyle choices have the power to change a health-care market that represents 17.9 percent of the American economy. Consumers will play an even larger role in managing health care in the face of projected cost increases from the implementation of federal health care reform next year.
“It all revolves around prevention and keeping employees healthy. Health risk assessments improve the quality of care for those with the most complex medical conditions, allow consumers to focus on the risk factors that drive chronic illness, encourage prudent use of medical services, and minimize unnecessary costs,” said Kristen Lepore, Vice President of Government Affairs at AIM.
Consumer health management has an outsized effect on medical spending because data show that five percent of patients account for approximately 60 percent of medical spending in the United States. A consumer whose assessment shows a risk for diabetes or heart disease and who then takes steps to avoid slipping into the five percent category drastically improves his or her life and simultaneously eases pressure on the financially fragile health care system.
Privacy is certainly a concern, especially since most employers hire third parties to manage their employee benefits programs. But Massachusetts employers routinely use third parties without incident to manage sensitive information such as payrolls and employee assistance programs, all under the jurisdiction of the most stringent data security law in the nation.
The irony of the flare-up over CVS Caremark is that far smaller companies are providing much steeper financial levers to convince workers to pay attention to their health. One employer whose work force is less than 1 percent of CVS Caremark’s said last week that his company is in the process of raising the premium discount for workers who undergo a health risk assessment from $1,000 to $2,000.
In the end, though, this isn’t about incentives or penalties. It’s about people knowing their biometric numbers and understanding what chronic diseases they are at risk for—so that we’re all aware of the steps we need to take to improve our health and live longer, better lives.