Inside Higher Ed: Weigh In or Pay

By Colleen Flaherty, for Inside Higher Ed

July 22, 2013

It’s increasingly common for colleges and universities, like other businesses, to offer the employees they insure incentives for staying healthy. And that makes sense; experts agree it’s a lot cheaper to treat illnesses earlier rather than later, or to prevent them altogether.

But instead of offering “carrots” to its employees for seeking preventive care, Pennsylvania State University is, from this autumn, opting for the “stick”, imposing a $100 (£65) monthly surcharge on those who don’t meet new health requirements.

Perhaps unsurprisingly, Penn State’s “Take Care of Your Health” initiative has some staff up in arms.

“I care about my health – I try to exercise every day and I eat pretty well,” said Matthew Woessner, professor of political science at the Harrisburg campus. “But I resent that my employer requires that I submit to medical exams, essentially. There’s a fine line between encouraging employees to be healthy and requiring them to comply with health screenings.”

Larry Backer, a professor of law and past Faculty Senate president at Penn State’s main campus in University Park, agreed.

“The coercive feature is novel, at least at Penn State, though programme administrators tried hard to mask it in the language of choice and consequences,” he said, noting the Senate wasn’t consulted on the plan.

In addition to publishing a web page, Penn State mailed employees brochures detailing what it says is part of a strategic plan to better control health care costs. By November, staff and their spouses or domestic partners covered by university health care must complete an online wellness profile and physical exam. They are also required to complete a more invasive biometric screening, including a “full lipid profile” and glucose, body mass index and waist circumference measurements. Mobile units from the university’s insurance company, Highmark, will visit campuses to perform these screenings.

Employees and their beneficiaries who don’t meet those requirements must pay the monthly insurance surcharge beginning in January.

“It is important to note that screening results are confidential and will not be used to remove or reduce health care benefits, nor raise an individual’s health care premium,” a university announcement reads. “The results only are for individual health awareness, illness prevention and wellness promotion.”

Raider Jensen, a spokesman for the university, said in an email that Penn State’s health care insurance is self-funded, so the “more proactive we can be in managing our health, the healthier our employees, the lower our shared insurance costs and the more efficient our operations”.

Moreover, Mr Jensen said, “during the last decade, many federal regulatory agencies have increasingly favoured workplace wellness programmes”. For example, he said, the Affordable Care Act raised the maximum levels of differential contributions toward health insurance based on participation in wellness programmes. Maximum rewards or penalties are now capped at 30 per cent of the total cost of coverage, including both employer and employee contributions, up from 20 per cent.

While it’s clear that preventive care incentives result in savings and increased productivity (medical costs fall $3. on average for every dollar spent on wellness programmes, and absentee day costs fall by about $2.73 for every dollar spent, according to one Harvard University study), it’s unclear both how widespread or effective punitive measures such as Penn State’s may be.

Mark Pauly, a professor of health care management and business economics at the University of Pennsylvania’s Wharton School, said he had heard of a few other employers using the “stick” approach, but not for such a “daunting” menu of exams.

“The evidence does not really support the idea that this forced wellness helps, but employers these days are afraid to try anything else,” he said in an email. “It is a mystery to me why Penn State would start irritating their workers.”

Jonathan Levin, a professor of economics at Stanford University and its School of Business who studies preventive care incentives, said businesses typically offer two kinds of incentives. Most popularly, businesses – including Stanford with its BeWell programme – offer financial rewards for people who get physical exams and participate in health counselling. Other businesses offer direct incentives for healthy behaviour, such as losing weight or quitting smoking.

Although not immediately clear, Professor Levin suggested that Penn State’s plan could still fall into the first category if “framed” differently.

“The upshot of incentive programmes is that people end up with different financial rewards,” he said. “If you think of the people who get less as the baseline, those who get more are getting a ‘bonus’. If you think of the people who get more as the baseline, those who get less are getting a ‘penalty’.”

Nevertheless, it’s hard for some staff to see the plan in a positive light.

Professor Woessner said he thought Penn State was deliberately “burying the lead” in announcing the plan in the middle of July, when so many staff are away and not able to voice their objections. Consequently, he said, “Take Care of Your Health” is likely to be here to stay (the requirements are annual).

Professor Backer said he didn’t suspect a “bad motive” on the part of the university. But because there was little staff involvement in the shaping the plan, “it’s not clear that other alternatives might have achieved better aggregate health metrics and saved money”.

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