GET PAID FOR STAYING HEALTHY

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MEDICAL SELF-CARE

This issue's column was guest--written--for Dr. Tom Ferguson-by a frequent contributor to Medical Self-Care.

by Bobbie Hasselbring

If someone promised to pay you $500 to stay healthy next year, do you think you might try a little harder than you do now to promote your own well-being?

Well, that's certainly been the case with several thousand people across the country whose employers have adopted "stay-well health insurance": an incentive program that pays cold cash (or other benefits) to workers who remain in good health and out of the doctor's office.

The concept was born in 1978 in northern California's Mendocino County, when Assistant School Superintendent Ed Nickerman was asked to find ways to help the school system cut costs. His investigation soon uncovered a particularly burdensome expense for both the district and its employees (including himself): health insurance.

"I have a large family," says Nickerman, "and no matter what I did, our health insurance premiums kept going up. Yet the only times we benefited from those payments were when one of us got sick. There was never any reward for staying well."

Ed reasoned that people would adopt more healthful lifestyles if they were offered some kind of financial incentive . . . and he reckoned further that, as their health improved as a result, they would use fewer medical services, which in turn would ultimately lower the school's (and its employees') insurance premiums.

At that time, Mendocino's schools carried a zero-deductible health insurance plan. Nickerman calculated, however, that if the district converted to a -$500-deductible plan, and set aside $500 per employee in a separate account to be used for the worker's medical expenses under $500 (anything over that amount, of course, would be paid by the insurer), the system could still provide total health coverage . . . but for a lower cost.

DOUBLE INCENTIVE

The "reward" part of Nickerman's plan was twofold: First, the district would earn interest on the money banked to cover each worker's first $500 in medical costs. And second, each employee would be credited with any of the money that he or she didn't use . . . and the amount accumulated over the years could be redeemed when that person retired or left the district.

If, for example, an employee's medical expenses totaled $100 for a given year, the district would pay that sum and credit the person with a stay-well bonus of $400. If the employee spent an average of just $100 a year in medical expenses for 20 years, he or she would collect a stay-well retirement bonus of $8,000!

Although his proposal was turned down by six other carriers, Nickerman managed to convince Blue Shield to underwrite the novel plan . . . and today, all parties involved are pleased with the results.

After just three years of the program, the district has saved $250,000 in insurance premiums . . . has stabilized its insurance costs . . . and has earned more than $20,000 in interest on the funds set aside to cover the deductibles. In addition, many employees have begun to accumulate substantial retirement nest eggs.