Barry's Boootcamp
A row of treadmills buzz along with the motion of the legs and feet at Barry's Boootcamp in West Hollywood. The United Healthcare Workers, a union that represents 150,000 workers in hospitals and nursing homes, and the giant healthcare provider Kaiser Permanente recently signed a contract that creates a novel incentive for workers to get in better shape, testing the notion that peer pressure may be a more effective way to promote healthy lifestyles than individual rewards or penalties. (Los Angeles Times / May 25, 2012)

No one sees the connection between unhealthy lifestyles and rising medical costs more clearly than healthcare workers, and yet they're hardly models of vim and vigor — a Thomson Reuters Healthcare report last year found hospital employees to be "generally sicker than the rest of the U.S. workforce." Now the giant healthcare provider Kaiser Permanente and a coalition of unions led by the United Healthcare Workers are trying to tackle this problem. They recently signed a contract that creates a novel incentive for workers to get in better shape, testing the notion that peer pressure may be a more effective way to promote healthy lifestyles than individual rewards or penalties.

The Kaiser deal reflects a widespread effort by employers to slow the growth of healthcare expenses, in part by shifting more of the cost onto their workers, in part by reducing the demand for treatment. A survey by the National Business Group on Health found that almost three out of four employers offered workers incentives last year to participate in health improvement programs; the average incentive has increased from $260 in 2009 to $460 in 2011.

Some unions have been notorious for trying to insulate their membership from the fitness push. The United Auto Workers, for example, has fought against efforts to ban smoking at job sites. More subtly, by bargaining for insurance plans with little or no out-of-pocket costs, unions reduced the financial incentive for their members to stay in shape. That approach isn't sustainable, however, and it ignores the trade-off between healthcare costs and wages. The more a company spends on insurance policies with low deductibles and co-pays, the less it can spend on payroll.

The contract signed this month by negotiators for Kaiser and the union coalition heads in a different direction. It sets a modest fitness goal for its members — a 5% improvement in body mass, cholesterol, blood pressure and smoking rates by the end of 2016 — and promises financial rewards if the workers collectively stay on target. Although the details have to be ironed out, the rewards will be pegged to the savings that Kaiser sees in its healthcare costs. It's hard to say how much of a bonus workers stand to reap, but considering how much the company spends on employee healthcare, the savings could be significant.
The incentive is unusual because it's based on the group's progress, not each employee's. That's a departure from the typical approach, which stresses individual responsibility and rewards (or, less often, punishments). The theory is that workers will be more motivated if they know that their efforts will affect their colleagues' pay as well as their own, and that groups of people are more likely to stay committed to diets and exercise than individuals. Of course, the group approach means that the rewards won't necessarily match the effort that each person makes (or doesn't make). But that's already the case with group insurance plans, where the premiums paid by the healthy subsidize the care received by the sickly.

It's important for companies to experiment with different approaches to wellness because it's not clear yet what incentives will be effective in combating today's biggest health threat — obesity — over the long term. The potential benefit for business is clear, with some companies reporting dramatic savings (both from lower healthcare costs and higher productivity). But relatively few employers are actually measuring the effectiveness of their wellness programs, and those programs have been attracting only a fraction of their workers. So there's much progress still to be made.

The UHW, a division of the Service Employees International Union which represents 150,000 hospital, nursing-home and home healthcare workers, is trying to reposition itself as an advocate for better care and lower medical costs in society at large, rather than just looking out for its own members' interests. Along those lines, it's backing a new initiative by Gov. Jerry Brown to get Californians into better shape. But as UHW-West President Dave Regan recently told The Times, the current fitness of healthcare workers makes them a poor advertisement for the benefits of a healthy lifestyle. The union's contract with Kaiser shows that it's ready to start rectifying that.