Senate HELP Committee Hearing Highlights Employer Uncertainty in Face of EEOC Lawsuits Against Wellness Programs

On Thursday, Jan. 29, the Senate Health, Education, Labor and Pension (HELP) Committee held a full committee hearing entitled “Employer Wellness Programs: Better Health Outcomes and Lower Costs.” The hearing was triggered by the recent EEOC lawsuits against three companies related to their wellness programs and the use of incentives.

Population Health Alliance (PHA) members know that worksite wellness programs are one segment of a broad continuum of population health approaches that includes disease management, case management and other population health services being implemented by employers seeking to improve the health of their employees. This, in turn, can increase productivity and lower costs.

The PHA has been tracking and working on this issue for over a year and a half. In May 2013, the PHA organized a meeting of its Washington, D.C.-based Government Affairs Committee members, with Chris Kucszynski of the EEOC, to discuss disability issues and wellness programs. This effort ramped up even more in May 2014 with the public announcement that the EEOC would soon release guidance on this issue (which never happened). Since then, and in light of the EEOC’s lawsuits, the PHA established an internal subgroup of our Government Affairs Committee to begin working on this issue, and formed a larger coalition of organizations and individuals to collaborate.

In the past few months, the PHA has developed a white paper for our members, held a webinar in collaboration with the National Business Coalition on Health (NBCH), reached out and provided support to the Senate HELP Committee, met with key staff on The Hill and organized a meeting with HELP Committee staff for our members and collaborators.

Jan. 29 hearing takeaways

Overall, the Senate HELP Committee was positive about the use of wellness programs in the workplace. This section of the Affordable Care Act (ACA) passed with bipartisan support and there was little disagreement from committee members regarding the merits of programs like this.

In his opening statement, Committee Chair Sen. Lamar Alexander, commented on the EEOC lawsuits relative to wellness programs, saying, “We want to make sure we don’t have a countervailing move going on in the government to discourage that. Even the White House has expressed concerns regarding the EEOC actions.”

The EEOC has had the opportunity to weigh in on this issue for quite some time and in May, announced that it would provide rules. The EEOC has not issued rules and instead, has chosen to litigate the issue. This approach has created considerable uncertainty for employers whose wellness programs adhere to the requirements of the Patient Protection and Affordable Care Act (PPACA), HIPAA and the Genetic Information Discrimination Act (GINA), yet find themselves in the cross hairs of the EEOC. As Dr. Catherine Baase, medical director of The Dow Chemical Company stated, “Employers should not have to face this uncertainty.”

Ranking Committee Democrat, Sen. Patty Murray highlighted the positives of wellness programs, “The ACA has put the power back into the hands of patients and encourages new, innovative delivery systems.”

Dr. Gary Loveman, president and CEO of Caesars Entertainment Corporation, also testified that “Wellness programs are ideally suited to address the epidemic of chronic diseases in this country.”

Additional testimony focused on these themes

1) Engagement is critical.

“In the absence of incentives for biometrics, we would not have such significant results.” – Dr. Loveman

“Successfully engaging employers is critical to achieving health for our society. We cannot achieve the results we want without it.” – Dr. Baase

“Engagement is key in wellness programs. Financial incentives are just one part; we need an integrated aligned system.” – Dr. David Grossman, medical director for Population and Purchaser Strategy, Group Health Research Institute

James Abernathy, a Blue Cross and Blue Shield of Tennessee employee, testified that the financial incentives of his company’s wellness program motivated him to lose weight and make significant improvements to his health.  He said that the program incentives are tied to participation and that he receives discounts and rebates.

2) Wellness programs are generating results

The King County program saw smoking levels drop by six percentage points as a result of their program, according to Dr. Grossman.

The Dow Chemical Company spent $4.8 million less in 2014 than it would have without the program, based on the industry average trend, noted Dr. Baase.

3) There is additional work to do

Jennifer Mathis of the Bazelon Center for Mental Health Law, expressed concerns from the disability community that these programs force individuals to self identify as being disabled. She questioned the voluntary nature of the wellness programs named in the EEOC lawsuits because of the high amounts of the incentives.

Dr. Grossman suggested that we use what we already know and then fill in the gaps, noting that the programs that have succeeded are those that implemented incentives based on best practices.

Eric Dreiband, partner with Jones Day law firm, felt there were two possible solutions, “Either the EEOC articulates a public solution that ACA meets requirements [of the ADA] or Congress enacts legislation.”

Sen. Murray echoed that urgency, “I think it’s really important that the EEOC get the rules out and makes sure all people are protected. I am assured they will be out very shortly.”

The PHA and our members will continue to follow and work on this issue in an effort to provide more certainty to employers, employees and vendors.

It is a Matter of Time Before Every Health Plan Has a Rewards Program

Rewards for healthy behaviors have been growing at leaps and bounds as a way to reduce healthcare costs for several years. In 2009, employers offered employees $260 in rewards for making healthy choices. Now, companies are projecting to spend $693 per employee on wellness incentives. ObamaCare added fuel to the fire. It increased the allowable amount of rewards from 20 percent to 30 percent (and in the case of smoking cessation) 50 percent of annual premium. Forbes named “health rewards” as two of the top 5 health IT trends in 2014.“Incentive Driven Healthcare” is here to stay.

Why don’t health plans want consumers to know this? It seems like a win-win. Well in some ways they do. Health plans win by reducing costly behavior through prevention and lifestyle changes. Consumers benefit not only by getting healthier and making better health decisions, but by receiving rewards. This is all true. But in some ways they don’t. Once consumers realize that purchasing health insurance, while incredibly personal, is nothing more than purchasing another consumer product, the marketers of the world will be faced with a health rewards competition.

ObamaCare created “exchanges” or “marketplaces” through which health insurers compete for the business of individuals and businesses. These marketplaces were established with a series of pre-packaged health plan options, which limit the variations in using traditional levers such as coverage and networks. Health plans that were used to competing on these levers are left with a single lever – price. Selecting from gold, silver and bronze hardly creates differentiation among UnitedHealthcare, Cigna, Aetna, Humana, Wellpoint, the Blues and many other plans in the United States.

Think of your credit card, hotel, airline or favorite retailer. It is a sure fire way to create loyalty, brand affinity and engagement. Let’s be honest, you are more inclined to use specific services or retailers if they provide a robust rewards program. When marketers of consumer products ask themselves “what tools do I need to attract, retain, and generate loyal customers?” the answer inevitably comes to reward programs.

As further evidence, consumers across multiple demographics were interviewed on what they wanted from their health plan. The only item that appeared in every demographic was “rewards for healthy behavior.” Would you have a more positive opinion of your health plan if they sponsored a program that rewards consumers for healthy behaviors? According to a Welltok survey, 75  percent of respondents agree. Furthermore, 81 percent said that access to such a program positively influences their decision to renew with their current plan. Not to mention, the fact that incentives are a proven means to motivate health choices and change behaviors. More than 96 percent of consumers would engage in healthier behaviors if rewarded.

Health plans are entering a new competitive landscape. Rewards will not only be an essential component, but will also drive a healthier population – creating a win-win situation for all.


Michael Dermer is the Chief Incentive Officer of Welltok. Prior to his current role, Michael was the founder and CEO of IncentOne, the first company that in 2003 identified incentives in healthcare as a critical solution to driving consumer and provider engagement.  Michael is considered one of the nation’s experts on rewards and incentives in healthcare –learned in running over 4,000 programs and 40 million transactions over ten years. His personal mission is a national reward program in which all Americans can “be healthy and be rewarded.” Since 2003, he has been guiding health plans, employers, health systems, governments and providers in how to use incentives to deliver cost reductions and health improvement.

Twitter: @rewardforhealth

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What Employers Want from ACOs for Better Population Health

When employers think about population health, they are thinking about the health of their workforce and their retirees. Employers want their workforce and their retirees to become and remain healthy. For large, self-funded employers this is about the bottom line and reducing health care costs, but more important than that, it’s about employee/retiree health outcomes, satisfaction and employee productivity.

Accountable Care Organizations (ACOs) are one of the promising new models of health care delivery that seeks to deliver better quality care at lower costs. ACOs can be designed to improve the quality of care, increase patient satisfaction, and lower the cost of care by aligning incentives and connecting the care provided by hospitals, medical groups, and health plans to work together to decrease fragmented care. So what are large employers looking for from ACOs?

First and foremost, employers want an ACO to consider the care of “the whole person.” They recognize that not all ACOs are alike and that they have different capabilities.  They expect ACOs to meet all the care needs of their employees, including behavioral health. To do this, the ACO needs a wide variety of service providers that deliver a holistic menu of care. For example, if the patient has a psycho-social issue, the ACO should have a social worker who can address that issue. If the patient needs to lose weight to help with her diabetes, she should have access to a dietician to work on changing her eating habits.

Second, employers want their ACOs to offer integrated care. Fragmented care is not only challenging for patients to navigate– it is not clinically optimal.  Primary care providers, behavioral health providers, pharmacy staff and specialists should work together, share information with each other, and have shared incentives for the same goal: the patient’s best interest.

Employers also want their ACOs to be able to identify the highest-risk patients and target them for special intervention. The greatest savings come from identifying the sickest patients and keeping them out of the hospital. The ACO needs to be able to identify these individuals and intervene before episodes escalate out of control. Some early employers in this space have seen great success with this targeted intervention, which is now a vital component of both employer-driven and health plan-driven ACO products.

ACOs also need to be able to support“smart” benefit design features designed by employers to engage employees in a partnership for value based healthcare.  This means ACOs should have programs and policies in place that align with the employer’s goals of promoting patients’ access high quality care, and  efficient use of care.  Appropriate utilization of high priced procedures, integration of step therapies, and shared decision-making have been shown to reduce cost and improve outcomes.

Finally, employers want their ACOs to embody quality improvement and payment reform. For decades, employers have been concerned about the variance inquality of care of our health care system. They know they spend too much for care that is too often unneeded, unsafe, and of poor quality. ACOs should be committed to quality improvement, and capture data so they can track their quality outcomes including patient reported outcomes. They should work with their partners implement new forms of payment that rewards for good quality, and that does not pay for waste and efficiency.

Vela headshot

Lauren Vela, MBA

Senior Director of Member Value, Pacific Business Group on Health

As Senior Director of Member Value, Lauren works directly with the large purchaser members of PBGH to facilitate collaboration and to support their purchaser-driven initiatives impacting healthcare delivery in the US. To that end, Lauren manages the processes of translating PBGH’s ground-breaking work in transparency and accountability into workable solutions for PBGH member organizations.

Prior to this role, Lauren was the Executive Director of the Silicon Valley Employers Forum (SVEF), a coalition of high tech employers that benchmark benefit designs and collaborate for improvement. During her SVEF tenure, Lauren systematized the group’s benchmarking practices and served as a facilitator and strategist for their joint projects with regard to both US-based and international employee benefit programs.

Prior to the SVEF role, Lauren enjoyed a twelve-year tenure with PBGH serving in three distinct areas; multi-stakeholder health information exchange, provider group organization improvement, and employer value-based purchasing. To this day, SVEF and PBGH maintain a strategic alliance and Ms. Vela works closely with purchaser members of both groups.


A New Alphabet Soup of Payment Models, Medicare Programs Drives Providers to Focus on Population Health

For providers, changes in payment models are now driving a much stronger emphasis on population health. Under the traditional fee-for-service model, providers don’t have a financial incentive to think about the health of a given population or community; they are simply paid for every test or procedure performed on each individual. But under new payment models such as accountable care organizations (ACOs) with shared savings, providers’ ability to improve the health of a population is directly tied to financial reward—and, in cases when they fail, a financial penalty. Some new payment models also help pay for care coordination and other much-needed services.

All of this recent change is being driven by the 800-pound gorilla in healthcare, Medicare. The Medicare program has put a huge new emphasis on value-based payment models. In January of this year, Health & Human Services Secretary Sylvia Burwell announced that by 2018, 50 percent of traditional Medicare payments will be tied to quality or value, via alternative payment models like ACOs and bundled payment arrangements.

The Medicare Access and CHIP Reauthorization Act (MACRA) recently passed by Congress makes dramatic changes in how Medicare pays providers. By 2019,Medicare providers must choose between participating in an alternative payment mechanism (APM) or in the Merit-Based Incentive Payment System (MIPS). Providers who receive a significant percentage of their income through APMs can opt out of MIPS and receive annual bonus payments of 5 percent. Those who participate in MIPS will be scored based on quality measures, with their scores reported publicly. High-scoring providers will earn financial rewards, while low-scoring providers will be subject to payment reductions. Given a choice between these two paths, there is an enormous incentive to move to APMs to avoid being publicly “graded” and possibly penalized.

As Medicare goes, so goes the rest of the healthcare system, and we are seeing a dramatic shift toward more value-based payment in the commercial sector as well. As much as 40 percent of payments to providers from commercial health plans are now tied to value, according to Catalyst for Payment Reform’s 2014 Scorecard on Commercial Payment Reform. Across the board, most providers understand the new payment models have the potential to help them deliver better care by actually paying for care coordination. And many recognize that better population health management can lead to greater income as well. Still, some providers are concerned about how all of this will affect their autonomy. However, the alternative—greater cuts in the Medicare fee schedule—is even less palatable.

Already, we have seen some provider groups embracing change; there are impressive pockets of excellence across the country. My home state, California, is no stranger to new payment models—capitation was born here. But our organization has expanded focus beyond California, and we have many members in other states doing groundbreaking work. For example, New West Physicians in Colorado has done a remarkable job improving population health with their ACOs and special attention to chronic care management in the Medicare population.

As we continue to change how providers are paid, I am optimistic we will have a triple win—for patients, providers and policymakers alike. Even in a healthcare system traditionally plagued by unsafe care, waste and inefficiency, the right payment models can lead to better population health, along with financial gains for providers and higher-value care all around.


Don Crane is President and CEO of CAPG, the nation’s only professional association that exclusively represents capitated, coordinated care organizations, and is a leading voice promoting the interests of physicians practicing accountable care across the nation. CAPG consists of over 190 multispecialty medical groups and IPAs that provide medical care to over 16 million patients across 39 states, the District of Columbia, and Puerto Rico.

 Mr. Crane is in the forefront of California and national public policy advocacy on behalf of accountable care organizations across the country as they make the journey from volume to value and move into risk based alternative payment models.  

What is True Population Health Management?

“Population health” is now a popular buzzword and all the rage, whether you are talking to disease management vendors, providers, employers, IT companies or even health policy wonks. But in my experience, far too many of us use that term too liberally, without really understanding what true population health management entails. And then sometimes we throw up our hands too quickly when our so-called population health programs don’t succeed. So what is true population health management?

Any population health program should start with identifying the population and conducting some form of an assessment; then amalgamate those assessments to determine the overall health of the population and stratify the population into risk buckets. This is followed by the all important and difficult engagement, and then person-centered, evidence-based interventions. These interventions must be tailored to meet the needs of each person. Too often, we focus just on disease specific interventions in this stage, when we should also be examining the workplace, home, community and other environments and full range of community resources. For example, how is a diabetic supposed to come in for regular treatment when he or she can’t drive and there is no public transportation in place? The final important step is impact evaluation—we need to understand how our interventions are working across the risk continuum. This can help us refine and readjust our approach if needed.

I’m truly looking forward to our 16th Annual Population Health Forum, where we will learn from the experts about the best ways to approach each of these crucial steps.  I’m pleased we’re really giving person-centered intervention the recognition it is due by making this year’s Forum theme “Welcome to Health.  Population of One.” Too often we get frustrated trying to decide how to improve the health of a large population — the task just seems too massive. It is critical we remind ourselves population health management creates improvements by focusing on the needs of one person.

In the coming weeks I look forward to having a robust conversation with all of you about the strategies and programs you have used to successfully change population health. What examples have you experienced first-hand where the change in population health started with just one person?

What is the PHA Forum 2014? The Juried Award Tracks

By Fred Goldstein, PHA Executive Director 

Bringing you insights, ideas and successes from the large-scale community based population health initiatives to best practices in population health including the new age of analytics, apps and engagement, the PHA Forum 2014 has it all.  It’s the go to place to understand population health and what works. It’s not about the fluff or the hoopla, but the substance behind population health. This year we received roughly 70 submissions reviewed by the PHA program committee for our 16 jury awarded presentations. The four tracks will focus on:

Analytics to Action:  For Providers and ACOs

You can’t do population health management without data.  But what can and should you do with the data, how do you make it actionable?  Digital surveys and dashboards, big data machine learning to better target the individual and data for outcomes based payment models are all covered in this track.  Get actionable intelligence for your provider group, ACO, or population health management program.

Excelling in Engagement

Remember the “Not documented. Not done” hospital mantra, how about “Not Engaged, Not Improved!” Engagement is the buzzword of population health; but how can you improve engagement?  From provider/patient engagement to engagement by risk level and the power of incentives, explore how to engage your population.

Powerful Population Health Management Strategies

Culture of Health, reporting and collaboration; sure that makes sense, but what are some of the best strategies to actually do these things? This session will present what works and why, giving you the ideas and tools to improve these critical areas. We can all point to examples of what didn’t work, oh yeah the boss stepped out for a smoke after handing out the wellness awards; learn from those who have documented what does.

Tech Touch: Strategies for Apps in Health

Activity Trackers, mHealth, the web and gamification; a few of the new tools and approaches to supposedy create better population health management programs. Talk about buzz and hype, there are new entries every day! Ever ask if anyone has any outcomes data? Look behind the cloud, no pun intended, and remember it’s only going to improve your population health program if if it works These presentations do and that’s the difference!

You get it now, go Register.

What is the PHA Forum 2014? The Keynotes

By Fred Goldstein, PHA Executive Director

Bringing you insights, ideas and successes from the large-scale community based population health initiatives to best practices in population health including the new age of analytics, apps and engagement, the PHA Forum 2014 has it all.  It’s the go to place to understand population health and what works. It’s not about the fluff or the hoopla, but the substance behind population health. What are some of the big issues we face, whose doing some really interesting stuff, what does the business community think and can we look beyond our own borders?

These are just a few of the issues the Visionaries Series Keynote Speakers discuss.  Hear from:

Esther Dyson

Wow, astronaut trainee, early stage Angel Investor, writer, and more; and now she wants to create communities of health?  I’ve got to hear that.  Esther will focus on her new initiative The Way to Wellville.  Hear about the idea, the process, what she hopes to learn and share and early results from this privately launched initiative.



David Nash, MD, MPH

Who better to discuss where we are and where we are going than the Founding Dean of the first school of population health at a medical school in the entire country. From his perch at Jefferson, his board position with Humana, as the Editor of the Journal Population Health Management, (the official journal of the Population Health Alliance and his programs shaping future generations of population health leaders, David has his pulse on the industry, the science behind it and its future.


Kaveh Safavi, MD, JD

It’s a big world out there, and they do population health too.  Kaveh Safavi, the Managing Director Global Health for Accenture, sees and works on many of these initiatives. He’ll bring his expertise and experience to Forum 2014 and help us learn from initiatives outside our borders.



Brian Klepper, PhD

Brian’s known for saying it like it is.  I’ve seen many individuals from the health care industry sit in stunned silence as he presents his ideas on why it costs so much and how to fix it; you know sometimes we can’t point to the other guy. Population Health is one of the key components to a solution, but only if we also consider costs and utilization and some of the drivers of inappropriate behavior from the provider side.  I can tell you this one will be interesting!

Only at the PHA Forum 2014 will you hear from this diverse group of great Keynote speakers.

Register now


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