Bipartisan Push Heats Debate on Economic Incentives for Wellness: Good for Integrative Practice?

Summary: Passage of a bipartisan amendment from US Senators John Ensign (R-NV) and Tom Carper (D-DE) has elevated a debate Integrator columnist Michael Levin has repeated brought to these pages. To change behavior, in Levin’s view, “education rarely works, economics usually does.” The Ensign-Carper amendment allow health plan costs to be cut by as much as 50% for those who engage healthy behaviors. Some unions and major disease-based organizations are opposed. Employers tend to support the direction, as Kenneth R. Pelletier, PhD, MD(hc) and Sean Sullivan, JD, each share. A tremendous discussion has been kindled on the Washington Post site. Levin lays out what he believes are significant opportunities for the integrative medicine community. Where are you on this issue of patient engagement, habit change, healthcare economics and public policy?

On the top of page 2 of 10 pages of comments on an October 16, 2009 Washington Post story on a recent US Senate move to significantly increase economic incentives for good health behavior, a respondent facetiously captured the depth of the debate this way. First, the writer noted the 10 states with the highest levels of obesity: Mississippi, Alabama, Tennessee, Louisiana, West Virginia, South Carolina, Georgia. Oklahoma and Texas. Then the writer suggested that perhaps the best way to resolve the nation’s healthcare cost crisis would be to let them secede.

That might be easier than grappling with the economic-clinical-ethical issues surrounding health habits, personal responsibility, chronic disease and obesity. 


US Senator John Ensign- co-sponsor on bipartisan bill for financial incentives for wellness

Opinions run high on just what we should do, as a policy matter, to better health care through a strategy of habit shifting incentives as we do in reducing car insurance for those who drive without getting tickets. The debate came to a head on September 30, 2009 when US Senators John Ensign (R-NV) and Tom Carper (D-DE) successfully passed through a key US Senate panel an amendment with the most significant financial incentive that has had any kind of adoption to this date. In a press release on his site, Ensign wrote that the measure, which passed on an 18-4 vote, “will incentivize Americans to lead healthy lifestyles
in order to lower their overall healthcare costs.”

The mechanism is to increase the levels of savings on health plan costs that are available to individuals who participate in wellness programs. The current “reward threshold” is at 20% of the
total cost of the employee’s coverage. Under the amendment, this will increase to 30% and could go to 50%. Costs for a typical family of 4 could be reduced as much as $6200 a year.

Employers who have been experimenting with controlling costs through wellness, including mechanisms that may be as simple as having employees fill out health risk assessment (HRAs) forms, are pushing this direction.

Sullivan: the rare legislative provision that make sense


Sullivan: this direction makes sense

I contacted Sean Sullivan, JD, co-founder of Integrator sponsor Institute for Health and Productivity Management and Integrator adviser Kenneth R. Pelletier, PhD, MD(hc) for his perspective. Sullivan is a strong promoter of the employer-sponsored health system with employers taking the lead through values-based benefit designs which tend to support investment in wellness and potentially, in Sullivan’s view, in integrative approaches. He is not typically fond of government programs. He states:

“I’m always in favor of letting employers use
their own money for their own purposes without having to get a permission slip
from government – this is the rare kind of legislative provision (like the Harkin bill offering tax credits for health promotion programs) that actually
makes sense because it promotes intelligent private sector actions.  Regarding
the potential for integrative medicine to expand its mind-share with employers,
I’m all for letting employers decide on the wisdom of that for themselves!

Pelletier: “Safeway Plan” rests on positive incentives


Pelletier: productive for individuals and organizations

Pelletier is the founder of the Corporate Health Improvement Program (CHIP) which he co-directs with Andrew Weil, MD at the Arizona Center for Integrative Medicine. Pelletier responded:

“Senator John Ensign’s bill is clearly in the
right direction to raise the current limit of 20% of the total medical premium
for employee wellness incentives to 30%. Actually, there is a provision that
would give government officials the option to raise this incentive as high as
50%. Additionally the Senate Finance Committee bill would set up a trial
program allowing insurers in 10 states to create wellness based incentives for

“Providing effective programs
with appropriate incentives
based on
measurable outcomes

is clearly the most productive
future direction for both

individuals and organizations.”



“From all of the research literature, it is clear that positive
(carrots are better than sticks) financial incentives elicit and sustain
positive, long term behavioral changes. There is no substitute for informed,
individual choice. Although some corporate programs provide incentives for
participation only (these are appropriate for such conditions as diabetes), the ‘Safeway’ model incentivizes employees to meet specific outcome ‘standards’ (on BMI and other biometrics) in order to earn financial
incentives. Providing effective programs with appropriate incentives based on
measurable outcomes is clearly the most productive future direction for both
individuals and organizations.”

Labor unions, such as the Service Employees International Union are on the record opposing, considering the effect of this strategy as tantamount to denying people coverage based on pre-existing conditions. Also opposed, according to the Washington Post story, are “organizations devoted to combating serious illnesses, such as the American Heart Association, the American Cancer Society and the American Diabetes Association.”

Integrator adviser and columnist Michael Levin of Health Business Strategies, who brought these developments to the attention of the Integrator, writes: “This
approach to lifestyle change offers integrative medicine new opportunities to
reduce healthcare costs and improve the health of America’s corporate citizens
via creative collaboration with wellness program managers of all stripes. This
is an opportunity. It must be seized.”

Levin offers integrated strategies for “seizing the opportunity”


Levin: It’s Big Brother-ish, but greed can make good things happen

I asked Levin what he meant by “siezing this opportunity.” His response focused on the kinds of clinical protocols he believed integrative practitioners could offer to support significant, cost-saving habit changes:

question – and creative minds much smarter than mine could offer better answers
than I could, I’m sure. This may be a question to toss out to the crowd.
my limited framework involving nutritional interventions, I can envision
creating cost reducing treatment & prevention programs along the lines of:

: economically incentive folks taking antidepressants to switch to St. John’s wort (SJW) for 9 months, which the Cochrane Collaboration has established is safe and
effective. Offer insureds the opportunity to receive high-quality SJW at a
price point below the Rx co-pay, and reduce premiums by $25/month. Presto!
Depending on the product, the payor could experience direct savings up to
$90/month and the patient could experience therapeutic benefit with fewer side
effects. If they choose to stay on SJW past 9 months, great. If they drop-out
before 9 months or choose another Rx drug after 9 months, the monthly discount
disappears. This is an easy, albeit one-dimensional approach to a very
expensive problem on which drug spending alone exceeds $12 billion per year.

Cardiovascular Disease Prevention
: include omega-3 fatty acids post initial-myocardial infarction (MI), along with other modalities, eg, diet, exercise, stress reduction, etc. For a while, the UK,
under NICE guidelines (National Institute for Health and Clinical Excellence), provided omega-3 FAs within 30 days of the first MI for
as long at 4 years at no charge to patients (those were the numbers that
worked in their economic model). This was subsequently halted for reasons that
are unclear but appear to me to be related to stakeholders in the Rx industry. Economic models need to be developed. 

Obesity/Type II Diabetes
: Let BMI and blood glucose trigger eligibility into an
integrated program designed to alter lifestyle, with end-points measured by
BMI, blood glucose, H5A1c. Nutrition, diet, stress management, mindbody work,
exercise, might all be components in this model. Economic models need to be

to do? Develop and package the intervention and co-market to self-funded
corporations (or the government) with an infrastructure partner (eg, insurance
network, disease management company, third party administrator (TPA), etc). The complexity of the intervention
will determine the ideal marketing partner(s). The secondary benefit from these
programs is the continuing enrichment of a knowledge base about which
interventions work, and which don’t.

“This is an example where greed,
deployed, could be very

good, indeed.”



widespread adoption, the interventions need to be standardized, safe, effective
and proven. Risk sharing (ie, where the program developer/seller and
buyer/payor share in the program costs and benefits) will help overcome certain
barriers to entry and provide economic upside to the seller (e.g.: if your
program can, on a population basis, reliably improve quality of life while
reducing annual healthcare costs for disease X from $200 million to $75
million, there’s nothing wrong with the developer/marketeer of the program to
snag 25% of the savings; that’s a huge economic incentive for cost
reduction/disease prevention. This is an example where greed, properly
deployed, could be very good, indeed. This is also an example of transforming
healthcare economic incentives, from ones which reward disease treatment to
ones which disease reward prevention, using economic incentives at the insured
level to change behavior).

  “Extreme times call for
measures in order to avert an

economic trainwreck. It’s time
we drove
more personal
accountability into healthcare.”

thought of influencing consumer behavior through economic incentives may be
difficult for some to embrace. To some, it sounds like ‘healthcare hardball.’ To others, it’s big brother-ish. But, extreme times call for
extreme measures in order to avert an economic trainwreck. It’s time we drove
more personal accountability into healthcare. This type of legislation may
empower us to do exactly that.
All easier said than done!

Comment: The promotion of personal responsibility and life changes would seem to be aligned with much in integrative practice. This seems a kind of tough love that we should endorse and promote and which might, as Levin suggests, create openness to many kinds of integrative practices. In truth, can this direction align “greed” with what practitioners, patients and employers all want? Do you agree with this direction for federal healthcare legislation? Would your profession? If not, why not?

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Written by John Weeks

Explore Wellness in 2021