STAT Ten is intended to give a voice to those in digital health. From those resonant voices in the headlines to quiet innovators and thinkers behind the scenes, it’s my intent to feature those individuals who are driving innovation–in both thought and deed. And while it’s not an exhaustive interview, STAT Ten asks 10 quick questions to give this individual a chance to be heard.
Michael G. Dermer is the Senior Vice President and 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 cost savings and engagement. Since then, he has been guiding health plans, partners and employers in how to use incentives to deliver cost reductions. In October 2013, IncentOne was acquired by Welltok to create “the” solution that the health industry turns to for social engagement and incentives. His current role is to help the health marketplace optimize their incentive program from both a design and execution perspective to create true health optimization. Michael is an author and contributor to many health publications including Managed Care Executive, Healthcare Payer News, Health Plan Markets, Managed Care Outlook, The Healthcare Blog, Investor ’s Business Daily, Consumer Driven Market Report, AHIP, Employee Benefits News, Employee Benefits Advisor, Benefit and Compensation Solutions, Deloitte’s Breaking Constraints, Fierce Healthcare and CDHC Solutions. You can find more about Michael’s on his blog and follow him on Twitter.
So, should we use a carrot, a stick or some fancy digital health device to help engage the audience? Which ever you choose, it seems there is a compelling case for the use of incentives and Michael can help bring this discussion into focus.
1. What makes rewards and incentives compelling for both the consumer and the healthcare community?
It is one of the rare cases in healthcare when everyone wins. Consumers earn rewards for behavior that improves health or reduces their cost. The system wins by rewarding for behavior that reduces cost. With incentives, you don’t write the check until someone takes action. So as long as they are lined up to the right actions, everyone wins.
2. Why are incentives important? How do programs perform without incentives?
Without incentives, individuals usually participate in health behaviors about ten percent of the time. For example, everyone on Medicare is entitled to a free annual wellcare visit and only 6 percent take advantage of it. Unfortunately, in healthcare, just because we build it doesn’t mean they will come. There is no shortage of great health programs and tools. We all know, for example, what we want diabetics to do. The challenge is that we can’t get them to do them. Incentives is what drives individuals to take behaviors that improve health and reduce cost.
3. Are reward programs prevalent in healthcare?
Employers spent $594 per employee in incentives in 2013. This is up from $260 per employee in incentives in 2009. Large employers spent $717 per employee. Over 74% of employers are expected to have incentive programs in 2014. Health rewards is also predicted to be one of the top 5 health solutions in 2014. Rewards is one of the fastest growing solutions in healthcare.
4. How do consumers perceive the healthcare community and how can rewards be used to improve that perception?
We need to understand that while we would like consumers to wake up each day thinking about paying the $2.7 trillion health care tab, they don’t. In fact, 53 percent of consumers say they live “paycheck to paycheck.” In addition, consumers don’t exactly trust the healthcare community. Only 7 percent trust their health plan – only slightly better than the 6% that trust social media companies. Only tobacco (3%) and oil (4%) companies were trusted less. Perhaps more importantly, when looking for health advice, only 18 % of consumers turn to their health plan and 12 % turn to their employer. So when designing incentive programs we need to keep these realities in mind. Hopefully the message of “be healthy and be rewarded” can help to align consumer behavior with a positive message to consumers.
5. Consumers are obviously well aware of reward programs in their non-healthcare lives, how do they feel about them when it comes to healthcare?
Despite their lack of trust of the healthcare system, this is one area where consumers are very willing to engage. For example, if rewarded, 96 % of consumers would be healthier , 75 % of consumers would have their blood pressure checked , 73 % of consumers would lose weight and 68 % would have blood sugar or cholesterol checks. In a recent survey by Accenture, 65 % of consumers said the most important thing that a pharmaceutical company can provide to consumers is rewards. Consumers get it and are ready, willing and able.
6. What role do incentives play in optimizing digital health assets?
Incentives are key to getting patients to engage with connected health devices in a meaningful way. There’s no arguing that the connected health movement has reached a tipping point – 52% of consumers are interested in buying wearable health trackers, according to the 2014 Accenture Digital Consumer Tech Survey. Unfortunately, 80% of health apps are abandoned within two weeks. The industry must find a way to truly engage users and create sustained healthy behaviors. It is not enough to simply wear these devices as accessories and log the results in a silo. Incentives have the opportunity to do that, as I outline in a recent publication.
Date: April 9, 2014