United's Idea for Holding Down Health Costs

Posted by: Arlene Weintraub on October 23

United.jpeg Last year, UnitedHealthcare introduced the Diabetes Health Plan, designed to award financial incentives to employees who do a good job of managing their diabetes. The idea has caught fire: after three companies pilot-tested the program in 2009, including General Electric, 15 more employers signed on to offer it next year.

Employee-benefits experts say this trend is likely to continue. “It’s an area of focus among national medical players,” says Dean Hatfield, senior v.p. at Sibson Consulting, the human-resources consulting unit of the Segal Company.

The Diabetes Health Plan waives co-pays for diabetes drugs and other treatments—provided participants adhere to treatment guidelines and they agree to be tracked to ensure they are compliant. United says patients are tracked quarterly based on their claims data. Those who don’t follow the plan’s requirements are kicked out and put back into their employer’s regular plan.

Discounts, especially on drugs, can be a powerful incentive to stay healthy, Hatfield says. “The number-one reason for not refilling a prescription is that you feel better,” he says. “Why pay $25 if you feel fantastic? If your health plan gives you the drug for free, you have no reason not to take it.”

Programs such as the Diabetes Health Plan could make up for the shortcomings in standard “disease management” plans. Earlier this decade, disease management was all the rage, with several companies offering health coaches, and incentives such as coupons for drugs and discounts on gym memberships. But it wasn’t clear those programs were really helping employers hold down the costs of covering chronically ill workers. A 2005 study published in the journal Health Care Financing Review examined disease management programs for diabetes, depression, chronic heart failure (CHF) and asthma. The only programs that produced a reliable return on investment were those aimed at CHF.

Part of the problem with cookie-cutter disease management is that there are no ramifications for patients who don’t comply. Employees may be given guidelines to follow, but they’re voluntary, and no one is watching them to make sure they stick with it. The United plan adds that element.

The health insurer and the companies that are pioneering the plan will be collecting data over the next couple of years to determine how well it’s working. But Dr. Robert S. Galvin, GE’s chief medical officer, can already envision implementing similar plans for other chronic conditions. “What do you have in the workforce? Lots of asthma. Even back pain,” he says. “Our intention is to expand this. We need to incentivize employees to get healthy.”

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