#10 Healthcare Programs with Monetary Incentives

Overview

Chronic diseases and infections coupled with rising medical costs threaten both the health of Americans and the economic wellbeing of the United States. Almost half of all adult Americans are living with a chronic illness, while 75% of deaths each year are due to one of these chronic diseases. It’s now estimated that by 2021 medical expenditures, which have been growing 2% faster than the overall economy each year, will total almost $5 trillion, or 20% of the national gross domestic product.

In the last decade, healthcare costs doubled to $2.6 trillion annually. If dollar bills were stacked atop one another, that amount would stretch 170,000 miles into the atmosphere. Healthcare costs today take almost 18 cents out of every dollar spent by Americans, and this is severely straining personal, state, and federal budgets.
Sadly, these extraordinary medical expenditures don’t always lead to less disability or enhanced quality of life.

Personal health behaviors are a major cause of the unsustainable medical costs and chronic illnesses that are overwhelming our American healthcare system. Almost three-fourths of all medical costs are for four chronic conditions: cardiovascular disease, obesity, diabetes, and cancer. We know, however, that 60% to 90% of these ailments are preventable.

Approximately 96% of all Medicare dollars are used to care for people with chronic illnesses, but as little as 3% to 5% of the federal program’s budget goes towards preventive health strategies. In 2011, nearly 2.3 million seniors in the Medicare program went to their doctor for an annual wellness visit. Although Medicare spends $3.8 billion on these exams annually, many patients leave without a formal game plan designed to improve their health.

With that in mind, the bipartisan Medicare Better Health Rewards Program Act of 2012 has been presented to Congress as a way to improve health care and control costs for Medicare participants. The goal of the program is to encourage people to take a more active role in their well being by developing and maintaining healthy habits.

The Better Health Rewards Program is part of a growing wellness revolution in American healthcare that is designed to give everyone achievable health goals and a detailed plan to reach them, as well as financial incentives to keep motivated and follow through with the various health strategies.

The three-year program uses the annual wellness visits Medicare already subsidizes to determine and measure improvements in six key areas of health: body mass index, diabetes indicators, blood pressure, cholesterol, vaccination status, and use of tobacco products.

In the first year, people will be assessed in each of these areas and then work with their doctor to develop a plan to bring their indicators into a healthier range. Progress will be measured during subsequent wellness visits in years two and three of the program.

By saving the Medicare program money, participants in the Better Health Rewards program will be given up to $400 after checkups in the program’s second and third years. All of these monetary incentives will come entirely from savings generated by seniors becoming healthy and utilizing fewer healthcare services.

Where Are They Now

In 2015, new federal regulations have been passed to maintain a balance between incentive programs and the disabilities act to meet the increasing number of companies creating these incentive-based health programs. Corporate wellness programs abound today, though not all are successful. The latest research has found that most wellness programs fail to reward preventative behaviors that could help members identify or prevent chronic disease. According to a 2017 report, regardless of the incentive amount available, less than half of employees earn the full incentive. This results in millions of unclaimed dollars each year.

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