MaineHealth shares strategy for overhauling health management program

PHILADELPHIA — By incorporating behavioral and economic principles into their health benefits strategy, the Portland, Maine-based MaineHealth hospital system was able to drastically improve the bottom line of its health management program.

Prior to 2012, participation rates in MaineHealth's employee wellness program had been stuck at or near 50%, despite the hospital systems' investment of as much as $1.6 million annually on wellness incentives.

“We had an engagement problem,” Michael Vittoria, vice president of corporate benefits services for MaineHealth, said Monday during a presentation at WorldatWork's “2013 Total Rewards Conference” in Philadelphia.

Mr. Vittoria said a comparative analysis of MaineHealth's medical claims costs from 2007 to 2011 revealed that employees not engaged in the hospital system's wellness program generated $1,200 per month in claims costs vs. program participants.

“We had to get our employees participating more in the things that are going to make them healthier,” he said.

In 2012, MaineHealth overhauled its employee health benefits and wellness strategy with an emphasis on behavioral economic principles such as loss aversion and choice architecture, which uses specific language, order and context to influence indivdual choices.

The hospital system implemented a tiered coverage structure designed to reward engagement in personal health management.

Under the new strategy, Mr. Vittoria said employees who elect not to participate in MaineHealth's wellness program are limited to a new “basic” health care plan that includes significantly higher employee premium shares, deductibles and coinsurance payments.

Employees who complete certain wellness initiatives are granted access to the hospital system's original medical plan, renamed Healthy HMO Plan, as well as a new consumer-driven health plan, renamed Healthy Saver Plan, which eliminates coinsurance payments in favor of a health savings account.

Mr. Vittoria said by eliminating words and phrases that might indicate the relative quality of a particular plan, MaineHealth was able to migrate 22% of its HMO enrollees to the CDHP plan in the first year.

“We deliberately stayed away using words like gold, silver and bronze to describe the plans,” Mr. Vittoria said. “We wanted employees to look at all of the plans objectively and pick the one that was right for them.”

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In addition to reconfiguring its overall benefit designs, Mr. Vittoria said MaineHealth also made substantial changes to its wellness incentive strategy in 2012. Where employees had been able to collect rewards for merely participating in wellness initiative and abstaining from tobacco use, today all wellness incentives are tied to specific health goals and outcomes.

MaineHealth also reduced the maximum dollar amount of incentives employees can earn in a year from $338 to $250, and instituted a $1,200 per year penalty for tobacco use for all group health plan participants, citing the behavioral economic theory of loss aversion, which holds that smokers are far more likely to quit in order to avoid a financial consequence than if they are offered a reward.

“In 2011, we were going to pay $421,000 to 5,400 of our employees who didn't smoke,” Mr. Vittoria said. “I might as well have given everyone $3 a week to not jump off a bridge, and then at the end of the year brag about how many suicides I prevented. As human resources professionals, it's up to us to ask ourselves whether we're actually getting an outcome through a particular incentive or are we just pretending there's an outcome.”

The results of the overhaul speak for themselves, Mr. Vittoria said. By the end of 2012, participation in MaineHealth's wellness program increased to 95% compared with 55% in 2011.

That boost in health management engagement, coupled with the migration of nearly one-quarter of its covered employees to the new consumer-driven health plan, is projected to save the hospital system $4.5 million in total health care costs this year, even as its total spending on wellness initiatives increased to $2.6 million, Mr. Vittoria said.

“This is not something that has to take years to do, but you have to be willing to shift resources where you need them most,” Mr. Vittoria said. “We have to start focusing our energies on things that make difference.”