No more Friday doughnut days at work? In what’s being called a novel approach to the typical employee wellness program, Kaiser Permanente and its 29 employee unions are offering cash bonuses to workers who – as a group – collectively lose weight, lower their blood pressure, cut their cholesterol and stop smoking.
The bonuses – up to $500 a year – will be doled out based on the improved health of all participants in a particular region, rather than that of any individual.
Kaiser’s approach – originally pitched to management by its unions – contrasts with some of the more aggressive efforts being embraced by employers around the country to rein in ever-rising health care costs. Earlier this month, after an outcry by faculty, Pennsylvania State University backed off its plan to impose a monthly $100 “noncompliance fee” for faculty and other staff who declined to fill out an online health survey. Part of a university program called “Take Care of Your Health,” the wellness survey asked professors and nonunion employees to answer questions not only about their medical history, but also their income, marital status and pregnancy goals.
Kaiser’s voluntary program contains no such stick – only carrot. All employees, regardless of whether they participate, will get the cash reward if their group meets its goals. The program applies to Kaiser’s 133,000 employees and managers in eight states and the District of Columbia, both union and nonunion. Not included in the incentives are Kaiser doctors, dentists and executives.
“This is a system that says, ‘Let’s try a different approach around the idea that we want to get well.’ And that we want to get a $500 bonus,” said Sean Wherley, a spokesman for SEIU-United Healthcare Workers West in Los Angeles, which represents 50,000 Kaiser employees. The group approach, he added, “stops making you feel guilty or pointing a finger.”
For decades, unions have been at the forefront of seeking better value from health plans, said Dallas Salisbury, president and CEO of the Economic Benefit Research Institute in Washington, D.C., in an email. He said that’s because “every dollar that goes to health benefits is a dollar that cannot go to wages or other benefits.”
Kaiser’s plan, he said “is an example of everyone – employers, unions, individuals – wanting to lower health care costs while improving outcomes in the form of better health. It recognizes that we are surrounded by temptation and busy lives and need some push and pull to keep focused on doing better.”
The Kaiser experiment works in three phases, with the health care chain’s eligible workers divided up by region. In the first phase, workers in a region must fill out a basic online health survey. If 75 percent complete it, each person in that region gets $150. In the second phase, employees must update their baseline screenings for weight, smoking, cholesterol and blood pressure. If 85 percent of employees do so, they pocket another $150. And if, by December 2014, the group shows an average 1.7 percent improvement – with no declines in any one category – in smoking, weight, blood pressure and cholesterol, everyone will get another $200.
The program is entirely voluntary. And even if some employees refuse to participate and continue smoking or gaining weight, they’ll still get the same bonus as everyone else. All payouts occur in 2015. Although Kaiser said it hasn’t calculated the potential cost of the program, it could be as much as $66.5 million, if everyone eligible gets rewarded.
Kaiser’s “total health incentive plan” is a twist on a trend by large employers nationwide to try new approaches to controlling health care costs. As the federal Affordable Care Act starts enrolling Americans in mandatory health care policies on Oct. 1, companies of all sizes are making changes to employee health care benefits. Some are shifting spouses off plans or urging employees into 401(k)-type health savings accounts. Companies like IBM and Time Warner Inc. have said they’re moving retirees to private insurers, rather than company-directed plans. And just last week, Walgreen Co. announced it will give employees a set amount of money next year to buy their own health insurance on the private marketplace.
“We expect that as our workforce gets healthier, there will be lower health care costs,” said Kathy Gerwig, Kaiser’s vice president for employee safety, health and wellness, based in Oakland. “But long-term, we’ll see other benefits to the business that extend beyond just health care premiums,” such as fewer absences, improved customer service and more “present-teeism,” the ability to be focused at work when not plagued by chronic illness.
Kaiser employees like Georgette Bradford, an ultrasound technician at Kaiser’s Point West facility near Cal Expo, said it’s doubly important that health care professionals be as fit as they can. “If we’re healthier, we can give better care to our patients. It makes sense for us to practice what we preach.”
After struggling for years with weight loss, the 38-year-old has shed 85 pounds, partly by forming a lunchtime walking club with her co-workers. Their route, Bradford said, is often along a mile-long walking path that the Sacramento hospital opened this summer on its Response Road campus.
“It really helps to have the support of your co-workers,” Bradford said. “When I struggled, it was because I was trying to do it alone.”
Kaiser and its unions are counting on that kind of attitude to boost participation. They’re also adding other kinds of incentives to promote employee wellness. The company has built walking paths at some campuses and improved the light and appearance of stairwells to encourage more walking and stair climbing. There are walking clubs, build-your-own-salad potlucks where people bring lunchtime salad ingredients to share, and “Instant Recess” time – 5- to 10-minute sets of music to get everyone in a department up and moving, if only briefly.
“It’s very inclusive of everybody. We think it will drive the culture toward healthier work environments and camaraderie around getting healthier,” Gerwig said.
Does it mean the end of the proverbial box of Friday doughnuts in the company break room?
“We’ve actually already seen a change,” she said, including “a significant decrease” in pizza parties and ice cream socials when hospital departments gather for workplace celebrations. And yes, there have been “fresh-fruit Fridays,” at which Gerwig swears that “a juicy, luscious peach is every bit as good as a jelly doughnut.”
Call The Bee’s Claudia Buck, (916) 321-1968. Read her Personal Finance blog, www.sacbee.com/personalfinanceblog.