Incentive programs are a powerful tool for health plans to drive positive behavior changes. Through rewards, plans can achieve their goals, whether they are increasing preventative care utilization, driving members to lower-cost care sites, or maximizing member engagement.
Unlike traditional benefit strategies, incentive programs leverage the principles of behavioral economics to encourage specific behaviors.
“If a member doesn't have anything to gain from participating, then they're less likely to behave in particular activities, in part because of the way that employers have structured their benefit designs,” says Kristin Gasteazoro, senior vice president of SmartShopper sales and client performance at Zelis.
Health plans may offer a rich benefit design with a low deductible, which attracts and retains members while providing them access to necessary services. However, incentive programs may still be needed to drive certain behaviors, like shopping at a care location that is high quality, but lower cost. Many clients are unaware of the cost difference between facilities or procedures that are only a few miles apart. For example, in a single zip code in North Carolina, costs for an MRI can range from below $800 to above $5,000, according to data available from Zelis.
Incentives like a gift card for attending an annual wellness visit, point accruals for health and wellness activities like hitting a daily step goal, or a prepaid card for receiving the flu shot, prompt specific behaviors. But are these popular incentives effective at truly motivating the change needed to improve member outcomes and reduce unnecessary spending?
That depends on the program, according to Gasteazoro. Several factors, like program design and incentive strategy, can make or break a plan’s incentive program.
Health plans must be strategic about program design to ensure rewards appeal to members and align with overall health plan performance goals. Otherwise, plans risk going over budget without the positive outcomes to show for their efforts.
“Health plans can very easily blow their budgets out of the water by not implementing a comprehensive program design and a strategy that really understands what the key performance indicators are, what success means, and who they ultimately want to drive to get the reward,” she explains.
Health plans need to lay out what is important for performance. Are wellness behaviors, such as ongoing health and well-being, a top priority? Or are plans looking to contain rising costs of chronically comorbid members or influence performance on Healthcare Effectiveness Data and Information Set (HEDIS), Medicare Advantage Star Ratings, or other standardized quality measure sets?
With a specific performance goal, plans can target the right population for incentive programs. This helps to overcome a major obstacle with incentive programs: They attract members who are already active participants in their healthcare decision-making. Plans typically want to deploy incentive programs to more reserved members who need that extra nudge to engage. Identifying a specific population for the incentive program is a pillar of effective program design.
Then, health plans need to dive deeper into the incentives they plan to offer members for specific actions.
“Just offering members incentives is not enough,” Gasteazoro says. “Incentives should increasingly be thoughtful and considered as part of a strategy.”
Plans must tie a meaningful incentive to the desired actions. For example, accruing points can incent health and wellness behaviors, while cash incentives can drive more immediate action that has a lot of perceived barriers to getting it done, like getting a colonoscopy. Typically, a $25 gift card is not enough for members to undergo an invasive procedure.
How members want to receive their rewards is also crucial. Traditionally, incentive programs rely on physical gift cards as rewards. But that’s an archaic way of running a program, according to Gasteazoro.
“Most of our members are digital in every aspect of their life. It's time to help them become digital in their healthcare as well,” she says.
Health plans aren’t living up to member expectations for a more digital experience. The digital revolution has been decades in the making, but the COVID-19 pandemic accelerated digital transformation and utilization, especially among consumers who needed an online format to interact with everyday tasks.
A recent survey found the most challenging activities for payers included providing a seamless digital experience for members and personalizing member communications. Delivering digital communications with more modern rewards, like virtual gift cards, aligns with this new member experience and allows health plans to be more flexible in a digital world. Digital rewards can also enable health plans to be more in control of what members use their rewards on, such as healthy foods at a grocery store.
Providing a digital incentive program also opens the doors for health plans. For example, mobile applications, emails, and texts can be easily scaled to target member populations for incentive programs. These means of communication also reach members where they want to be reached, making them more likely to engage with incentive programs. Health plans should consider how tailored messaging across several means of communication can boost participation in programs, especially among their target audience.
“This all goes back to that idea that people aren't always doing what they should to be healthy, and those are the populations that you want to use the incentive for,” Gasteazoro states. “That's money well spent.”
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Part of Zelis Healthcare’s comprehensive suite, SmartShopper Propel is a member activation and engagement solution that makes highlighting open opportunities for care easy and convenient. Propel meets the consumer where they are to build engagement and trust, all while helping payers meet plan goals. Learn more here.
