O.K., that's the problem. One way to attack the problem is with a nanny state that legislates what you can and cannot eat. But maybe they would outlaw smoking, not a bad thing.
O.K., the other solution is to just let people alone. But that is how we got the problem in the first place.
That's why this article in The Economist is such good news.
Keeping employees healthy
Trim staff, fat profits?
American firms are offering staff carrots to stay fit. Soon they will wield sticks
Jul 30th 2011 | NORWALK, CONNECTICUT | from the print edition
ONE of the bosses in the film “Horrible Bosses” (see article) announces that it is time to “trim some of the fat”. He then tries to fire the fat employees. In real life, companies are more humane. But they do worry about their employees’ health, and the effect this has on productivity and insurance premiums. Many are trying to nudge their staff to keep fit.
At GE Capital’s office in suburban Connecticut, for example, employees may not smoke on company property. The office gym has personal trainers and flyers with recipes for kale and quinoa salad. Outside the cafeteria, a sign warns of the calorific peril of the chicken pot pie; inside, the salad bar has colour-coded tongs to convey which salad toppings should be used “freely” or “sparingly”.
Health premiums in America have more than doubled in the past decade. The proportion of adults who are not merely chubby but clinically obese has more than doubled since 1980, to a third. Small wonder more firms are offering wellness programmes. This year 73% of employers surveyed by PwC said they offered some type of wellness initiative; of those with more than 5,000 workers, 88% did.
Such programmes used to involve little more than a few leaflets urging staff to exercise, eat less and quit smoking. Now they are pushier. Many firms ban smoking on the premises. Many also offer incentives for living healthily. This can mean cash, or something more complicated.
This month Humana, a health insurer, launched a programme to reward healthy behaviour with points that can be used towards hotels and electronic gadgets. The trendiest human-resources departments subscribe to the theory, peddled by behavioural economists, that people are not rational actors—given the choice between good health later and a doughnut now, the doughnut will usually win. But people can be manipulated to act more wisely.
Large firms are often the most ambitious. At IBM, employees receive a $150 bonus for exercising, eating nutritious meals and so on. One such bonus is designed not just for an employee but for his entire family. According to IBM’s own data, caring for a diabetic child is six times costlier than caring for a healthy one. One study of the exercise bonus scheme showed that participants’ annual health costs grew 19% more slowly than those of non-participants. In any other field such results would be dismal. IBM considers it a triumph.
GE has experimented with various tactics. In 2009 it worked with UnitedHealthcare, an insurer, to give diabetics cheaper drugs and nutritional programmes, an effort to avert costly complications. A new health plan, meanwhile, aims to wring value from health spending. GE pays for 100% of preventive care but tries to steer employees toward cheaper, more effective treatment. “This isn’t about big brother telling people what to do,” says John Rice, GE’s vice-chairman, “but helping them make better choices.”
More and more firms are jumping on the wellness bandwagon. United last year announced a partnership with the YMCA, a gym, and Walgreens, a pharmacy, to prevent those at risk of diabetes from acquiring it. Express Scripts, which manages drug plans, has a lab that studies how workers use (legal) drugs and how they might be nudged to take the right ones at the right time. It calls this “Consumerology®”. Healthways, which helps employers create health programmes, offers workers different incentives to take their medicine. (For example, one diabetic may be persuaded by $3. Another may require $20. Others may simply do it because not taking your medicine can lead to complications such as having your foot amputated.)
It is unclear how many of these programmes actually work. Some appear to. United’s intervention for pre-diabetics is an expansion of a model tested by the National Institutes of Health, which reduced the likelihood of developing diabetes by 58% over three years. Kevin Volpp, the director of the Centre for Health Incentives at the University of Pennsylvania, found that GE’s anti-smoking incentives prompted 9.4% of smokers to remain smoke-free after 18 months. Without incentives, only 3.6% of those who tried to quit succeeded. A review published in Health Affairs last year found that firms saved $3.27 for every dollar they spent on health programmes.
However, Dr Volpp sounds a note of caution. Companies with programmes that flop are less likely to broadcast their results. Some initiatives reward healthy employees for activities they might have done anyway. Others prompt only temporary change. “Short-term weight loss is not a particularly big trick,” says James Pope, the chief science officer for Healthways. “Long-term weight loss is.” PwC’s survey found that more than half of employers with wellness programmes judged them to have had only a minimal effect. Nevertheless, a healthy 89% planned to expand their programmes.
In future, some firms may stop offering health insurance, dumping employees on new state exchanges created by Barack Obama’s health law. Those who continue to offer insurance may try controversial means to keep it affordable. A growing number of Healthways’s clients want to use sticks as well as carrots, says Dr Pope. At Safeway, a grocery chain, the premium that employees pay for their health insurance falls if they keep their weight and cholesterol under control. In other words, the unhealthy are penalised. GE first offered incentives to employees who stopped smoking; now those who still smoke must pay $650 more for their health insurance. Companies may be nudging now, but in future they may shove.
At GE Capital’s office in suburban Connecticut, for example, employees may not smoke on company property. The office gym has personal trainers and flyers with recipes for kale and quinoa salad. Outside the cafeteria, a sign warns of the calorific peril of the chicken pot pie; inside, the salad bar has colour-coded tongs to convey which salad toppings should be used “freely” or “sparingly”.
Health premiums in America have more than doubled in the past decade. The proportion of adults who are not merely chubby but clinically obese has more than doubled since 1980, to a third. Small wonder more firms are offering wellness programmes. This year 73% of employers surveyed by PwC said they offered some type of wellness initiative; of those with more than 5,000 workers, 88% did.
Such programmes used to involve little more than a few leaflets urging staff to exercise, eat less and quit smoking. Now they are pushier. Many firms ban smoking on the premises. Many also offer incentives for living healthily. This can mean cash, or something more complicated.
Large firms are often the most ambitious. At IBM, employees receive a $150 bonus for exercising, eating nutritious meals and so on. One such bonus is designed not just for an employee but for his entire family. According to IBM’s own data, caring for a diabetic child is six times costlier than caring for a healthy one. One study of the exercise bonus scheme showed that participants’ annual health costs grew 19% more slowly than those of non-participants. In any other field such results would be dismal. IBM considers it a triumph.
GE has experimented with various tactics. In 2009 it worked with UnitedHealthcare, an insurer, to give diabetics cheaper drugs and nutritional programmes, an effort to avert costly complications. A new health plan, meanwhile, aims to wring value from health spending. GE pays for 100% of preventive care but tries to steer employees toward cheaper, more effective treatment. “This isn’t about big brother telling people what to do,” says John Rice, GE’s vice-chairman, “but helping them make better choices.”
More and more firms are jumping on the wellness bandwagon. United last year announced a partnership with the YMCA, a gym, and Walgreens, a pharmacy, to prevent those at risk of diabetes from acquiring it. Express Scripts, which manages drug plans, has a lab that studies how workers use (legal) drugs and how they might be nudged to take the right ones at the right time. It calls this “Consumerology®”. Healthways, which helps employers create health programmes, offers workers different incentives to take their medicine. (For example, one diabetic may be persuaded by $3. Another may require $20. Others may simply do it because not taking your medicine can lead to complications such as having your foot amputated.)
It is unclear how many of these programmes actually work. Some appear to. United’s intervention for pre-diabetics is an expansion of a model tested by the National Institutes of Health, which reduced the likelihood of developing diabetes by 58% over three years. Kevin Volpp, the director of the Centre for Health Incentives at the University of Pennsylvania, found that GE’s anti-smoking incentives prompted 9.4% of smokers to remain smoke-free after 18 months. Without incentives, only 3.6% of those who tried to quit succeeded. A review published in Health Affairs last year found that firms saved $3.27 for every dollar they spent on health programmes.
However, Dr Volpp sounds a note of caution. Companies with programmes that flop are less likely to broadcast their results. Some initiatives reward healthy employees for activities they might have done anyway. Others prompt only temporary change. “Short-term weight loss is not a particularly big trick,” says James Pope, the chief science officer for Healthways. “Long-term weight loss is.” PwC’s survey found that more than half of employers with wellness programmes judged them to have had only a minimal effect. Nevertheless, a healthy 89% planned to expand their programmes.
In future, some firms may stop offering health insurance, dumping employees on new state exchanges created by Barack Obama’s health law. Those who continue to offer insurance may try controversial means to keep it affordable. A growing number of Healthways’s clients want to use sticks as well as carrots, says Dr Pope. At Safeway, a grocery chain, the premium that employees pay for their health insurance falls if they keep their weight and cholesterol under control. In other words, the unhealthy are penalised. GE first offered incentives to employees who stopped smoking; now those who still smoke must pay $650 more for their health insurance. Companies may be nudging now, but in future they may shove.
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