The Folly of Regulating Employer Wellness Policies

credit: kevin dooley / Foter.com / CC BYcredit: kevin dooley / Foter.com / CC BYToday’s illustration of the problems with a bureaucratic approach to health insurance comes courtesy of The Business Roundtable, which is worried that Obamacare regulations governing wellness incentives will be weakened to the point of uselessness. The health law allows employers to provide financial incentives to employees who agree to participate in wellness programs or hit certain health targets. But the allowable incentives have been continually watered down since the legislation passed.

Business Roundtable, a large trade organization representing business interests, is worried that the current draft of the regulation, which is now entering the final approval process, could weaken the incentives to the point where they are useless. The group has sent a letter to the Obama administration urging officials to allow employers to take action to ensure the incentives go to people who are meaningfully participating in the programs.

One minor complication is that, broadly speaking, employer-run wellness programs are already sort of useless, at least as far as improving employee health. The research into these programs  enerally does not find that the incentives motivate employees to lose much weight or quit smoking in large numbers. It does, however, find that businesses can save money by charging less to employees who go for wellness bonuses, which in turns means that the employees who don’t can end up paying more.

So you can see why, all else being equal, business interests would favor regulations that allow them more flexibility to design health and wellness programs that save money on employee health costs. And, again, all else being equal, why shouldn’t they? Especially if there aren’t substantially different health outcomes at stake.

Part of the push to weaken the incentive rules stems from the generalized liberal aversion to charging differential rates for health care. As one cancer activist told National Journal last month, the idea that employers might charge less to people in wellness programs “really does undermine [Obamacare’s] community risk-pool concept.” Maybe so, but what community rated insurance pooling ends up meaning is that costs go up for nearly everyone in order to pay for those with the highest expenses. On the macro level, if we're looking to reduce national health spending, then employer-run wellness incentives look fairly promising.

Somewhat lost in the back and forth between business lobbyists and the Obama administration, though, is a bigger question: Why should the federal government be regulating these sorts of wellness policies at all? If businesses want to provide health and wellness incentives to employees, that should be something that employers and their employees negotiate between themselves, just like other benefits and wages. It is, ultimately, a compensation issue. Except that instead of giving employees bonuses to make widgets, or sell hot tubs, businesses are paying employees to hit certain health targets, or to perform certain potentially health-promoting actions.

Like I said, the studies don’t show that wellness programs improve health in aggregate. But you can see, in small scale, how they might, in certain circumstances. The Cleveland Clinic, for example, has been fairly aggressive about pursuing these sorts of policies, and has had some success in improving employee health measures. To be sure, the Cleveland Clinic, an ultra high-quality, high-prestige health care institution, is not likely to be representative of your average business, but it suggests the environment in which fairly aggressive employer wellness policies could be effective.

Too much of the health policy debate revolves around questions about how to take these results and scale them up, applying the same rules to everyone. That approach rarely works. Indeed, it usually leads to the exact sort of regulatory bickering we're seeing now. Rather than squabble over legislative particulars that apply to most everyone, we ought to be looking for ways to allow employers—and not just those in the health care field—to experiment with a wide variety of wellness policies. Some of them will work for some folks; many others will produce middling results or fail entirely. But we’d probably end up with more successes than with a single, centrally determined policy that’s almost certain to work poorly for almost everyone.

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  • John||

    Why should the federal government be regulating these sorts of wellness policies at all? If businesses want to provide health and wellness incentives to employees, that should be something that employers and their employees negotiate between themselves, just like other benefits and wages. It is, ultimately, a compensation issue.

    They are ineffective and dreadfully unpopular with employees. They would thus likely run their course if left alone. Insurance companies would eventually figure out such programs do nothing to cut the cost of their claims. And businesses would eventually figure out that such programs hurt moral and make them less competitive in the labor market.

    That is of course unless the government comes in and tips the scales by offering subsidies for such programs. Then they will not just continue but grow and become more common no matter how worthless or unpopular they are. And that of course is what the people behind this want. Face it America, your ass belongs to progtard do gooders. They know better than you and mean well.

  • entropy||

    I am not fucking Japanese.

    My employer tries to tell me to do jumping jacks I tell him to go fuck himself. This ain't high school, nobody makes me run laps. Hell, I didn't even run laps in highschool, I use to ditch gym.

  • Live Free or Diet||

    My immediate supervisor lives four states away and the "guidelines" of the "challenges" directly contradicts how I lost a third of my body weight and kept it off for 9 years without drugs or "diet food."

    I could tell them I weighed 98 pounds and send them a photoshopped pic and they wouldn't know the difference.

  • ||

    Of course employee wellness programs would all but disappear if we eliminated the employer tax break for health insurance spending.

    Separate the link between employers and health insurance and they are likely to stop interjecting themselves into their employees health (this is a feature, not a bug).

  • John||

    Of course employee wellness programs would all but disappear if we eliminated the employer tax break for health insurance spending.

    How would further fucking people up the ass on their taxes and preventing them from gaining the benefits of purchasing insurance in large groups do any good? If these programs were effective, which they are not, the insurance companies would just require them. So really that has nothing to do with it.

  • The Last American Hero||

    Unlinking employment and health insurance does not prohibit purchase of insurance in groups. It would just allow the groups to change. I could purchase through a professional organization, a social group, or maybe even Groupon. The benefits of unlinking the insurance from the employer would be fantastic - increased competition and a plan more likely to cover MY needs.

  • Tulpa (LAOL-VA)||

    Well, for the risk pool to work you would need the group's membership selection to be only loosely related to health status.

  • califernian||

    'Smith!' screamed the shrewish voice from the telescreen. '6079 Smith W.! Yes, you! Bend lower, please! You can do better than that. You're not trying. Lower, please! That's better, comrade. Now stand at ease, the whole squad, and watch me.'

    A sudden hot sweat had broken out all over Winston's body. His face remained completely inscrutable. Never show dismay! Never show resentment! A single flicker of the eyes could give you away. He stood watching while the instructress raised her arms above her head and -- one could not say gracefully, but with remarkable neatness and efficiency -- bent over and tucked the first joint of her fingers under her toes.

    'There, comrades! That's how I want to see you doing it.'

  • NeonCat||

    We have always been at war with our waistlines.

  • ||

    The Cleveland Clinic, for example, has been fairly aggressive about pursuing these sorts of policies, and has had some success in improving employee health measures.

    The Clinic is an unaccountable fascist nightmare pseudostate. It needs to be burnt to the ground for the sake of all humanity.

  • paranoid android||

    It's funny, they call it a "wellness initiative" but somehow it sound just like another excuse to not pay me more...

  • Robert||

    Interesting Wikipedia entry on Bonnie Prudden, whom I had no idea of until I looked at the album cover above.

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