Your Welcoa membership has expired.

Ethical Considerations of Incentive Design

BY: Maggie Gough // COO • WELCOA

Colleague: It would be extremely interesting to examine engagement and health outcomes for wellness programs with outcomes-based incentives compared to programs that don’t incentivize or require participation. I don’t think I have seen such an analysis. Maybe it’s out there. But that would be very useful and engaging.

Response: Can you measure “engagement” in an offering that delivers a penalty for non-compliance? Is the employee engaging or are they complying?

There are data that suggest that outcomes-based programs are more effective. Even so, does effectiveness justify it if it is unethical or causes unintentional harm?

First, let’s explain what we mean when we say “outcomes-based” wellness program. This is a program that incentivizes people who produce biometric and health care data within the pre-determined parameters that an employer has defined. This model also penalizes, usually by withholding the incentive, those that cannot produce proof. In these models, the incentive or penalty is usually delivered through the health insurance premium. If an employee does not meet the parameters, they can avoid the penalty by engaging in a health program that the employer has chosen and provide documentation of the health care they are receiving. This is option is legally required for businesses that deploy outcomes-based programs and it is called a “reasonable alternative”.

The work of leaders in the corporate wellness industry is to create systems in which people can lead healthy lives. That may mean, in addition to ensuring the organization’s dysfunction is not harmful to its employees, providing a diabetes education program, mental health resources, or a couch to 5k training. These are things that support an individual’s successful behavior change. They are offered through the employer to support the health and well-being of an employee. This is all pretty straightforward.

Somewhere along the way, something shifted and the delivery of that work became more aggressive. Maybe it was an impatience for results. Maybe it was a need to prove our worth in the ROI business model. Maybe someone else told us this was THE way to make it all work. Regardless of the reason, outcomes-based wellness programs became very common. These models would be more aptly named compliance-based programs. We are going to boldly say that this model does not align with the goal of the work, causes unintentional harm, and is therefore unethical.

These compliance programs place all of the responsibility of success on the individual with little to no accountability to the system in which a person lives and works. This unintentionally causes harm by avoiding organizational responsibility and by adding more barriers to self-care.

Here is an example for consideration:

If someone has a genetic chronic illness that was not caused by their lifestyle choices, that person inherently is already working harder than the rest of us toward health. In addition to navigating a difficult health care system, they also now have to provide documentation to their employer to prove they are engaging in the appropriate care so that they are not penalized for poor biometric data. In this example, the wellness program placed additional burdens on someone who needs more support from us.

In another example, here is what we heard from an employee of a large hospital system.

“My spouse and I are exhausted keeping up with full-time work and two young children. Now my employer is requiring I submit documentation of the health care my daughters and I receive. We get our flu shots every year. I do not have time to get proof from their pediatrician and submit it to my employer. It’s not the point of getting the flu shot. The truth is, I have enough money to pay the full insurance premium so I just don’t do any of it.”

This example highlights the financial privilege that allows some employees to avoid the added responsibility. In essence, outcomes-based programs create situations in which employees in more challenging life circumstances that have impacted their income do not have the privilege to opt-out. These models unintentionally impact marginalized populations. Once again, those who needed more support from us received more boxes to check.

These examples don’t even begin to segment based on gender pay disparities or race which, as we know, create an even steeper disparity. It also doesn’t take into consideration what happens when that employee is making it through a pandemic.

There is data to suggest that outcomes-based programs do, in fact, provide improved outcomes in aggregate health data within a cohort. What we don’t know is if that same program has degraded trust between the employee and the employer or if it degraded a person’s overall well-being. Here is another consideration. What if your employee divests from some of the responsibilities outlined in their job description so that they can provide proof of their health care and earn their points?

Coming back to the goal of workplace wellness which is to create systems in which people can lead healthy lives. This is big, audacious work. We cannot deliver outcomes regardless of the cost. We cannot degrade the system to deliver the outcome. There are companies that have created outcomes-based wellness requirements and have also walked out of them. In fact, we see it happening more and more frequently. We know the heart of this community is pure gold. We know the intention was never to cause harm. We know the goal was to cultivate the right kind of motivation to support employees. Even still, it’s important we consider all outcomes. It’s okay to recognize a need to change and work toward that.

There is a common experience among the team members at WELCOA. When we tell people what we do for a living – you know- the question you get from your friend’s friend at the backyard BBQ – inevitably the person will say, “Wow. Can you come to my company? Is my company a Member of WELCOA? We could really use that kind of help.”

Maggie Gough
Serving a variety of populations in a multitude of industries, Maggie understands the complexity and depth of the corporate wellness industry and the needs of the professionals and employees they support. Her role at WELCOA is to ensure members receive stellar service and build sustaining connections as a community.