Using Incentives to Manage High-Cost Conditions & Reduce Costs

By HMS
Jul. 12, 2019

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An ongoing challenge facing health plans today is controlling healthcare costs. This issue is also a concern for employers. A recent Willis Towers Watson survey found that organizations are addressing this problem in a variety of ways, including a focus on clinical conditions associated with high-cost claims, managing pharmacy costs and specialty pharmacy utilization and improving employee total well-being.

Many health plans are also adopting these strategies, but they are unlikely to be successful without member engagement and participation. Managing high-cost conditions such as diabetes, for example, requires members to see their physicians periodically for routine checks and potentially change their habits related to diet and/or exercise.

Changing member behaviors is a challenge

Unfortunately, experts have found that changing member behaviors is one of the biggest challenges to managing healthcare costs. Some members simply aren’t motivated on their own to take action.

Research suggests that making healthy choices isn’t just about the actual benefits and barriers related to those choices. Instead, it’s how people perceive the benefits and barriers that matters. If the perceived barriers outweigh the benefits, people won’t be motivated to change. The barrier to change may be uncertainty or fear. Or simply the effort required to take action may be enough to stop people in their tracks.

Incentive programs can help reduce the barriers associated with desirable health behaviors. Health plans with the most successful incentive initiatives focus on three key elements: awareness, activation, and awards.

Creating awareness among members

Health-related incentives should be closely integrated with the health plan’s value proposition. During open season, health plans should communicate with all existing and potential members about the incentives that are available. Incorporating one-pagers into welcome packages is a good idea, as are IVR welcome messages. Information sharing during member onboarding is also a best practice.

Activating member commitment

Members are more likely to participate in an incentive program if they make a commitment. Health plans may gather member commitments through IVR, direct mail, calls to a hosted inbound phone line, or digitally through email or SMS text message. The goal is to engage members and nudge them to action.

Awarding in response to positive actions and behavior

Once members complete an activity, the health plan must validate claim information and then award the incentive. Monetary rewards like gift cards tend to be compelling.

Using a third-party vendor streamlines incentive management for both health plans and members alike. One effective solution for incentives, for instance, requires only a single verbal or written commitment from members for the year. After that, the system automatically validates claims and delivers gift cards.

The solution also initiates supplemental, targeted programs to drive additional activation and utilization of incentives. For example, messaging can be sent to members who would benefit from additional motivation. Regular reports offer visibility into the status of incentives, current spending levels and spending mix.

Less than half of participants (41%) in the Willis Towers Watson survey felt that their organizations have made progress on enhancing employees’ total wellbeing over the last three years. Yet, over three quarters (82%) believe that it is important to enhance employees’ total wellbeing over the next three years. Incentive programs represent one promising way to close that gap.

What are you doing to help your members manage their high-cost conditions more effectively?

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