Wellness Incentives are Like Cents-Off Coupons: Good for the First Sale, But Not For Brand Loyalty

I continue to find interesting parallels between my career in advertising and my current involvement with health and well-being improvement.

Recently, I’ve written about customer engagement and the lessons that the Mad Men of the past can provide in serving today’s employer and health plan buyers. Another post related to the experience of advertising development as a blueprint for member communications planning.

Today, I’m comparing participation incentives to promotional spending on consumer brands. Each are helpful in driving some action, but neither produce sustainable results.

Wellness-Incentives-NewMost employers today, along with their vendor partners, have gotten into the practice of embedding incentives into program design. Employees expect it and some of the payola is actually quite rewarding.

And, according to the most recent Fidelity/NBGH survey, employers had planned to spend an average of $594 per employee on wellness-based incentives this year – up 15% from last year and more than double the $260 figure from five years ago. Nearly all (93%) said they plan to expand or maintain wellness-based incentive spending over the next 3-5 years.

Incentives are definitely a way to spur people to action, and have proven effective in many areas of consumer marketing.

They work in getting prospects into dealer showrooms, initiating purchase decisions at the supermarket, and driving fast-food sales volume.

Price-based tactics are funded from promotional budgets, usually at the expense of advertising. In consumer marketing, there’s always been a tug of war between above-the-line advertising and below-the-line promotional spending.

Advertising is generally designed to build brand awareness and image, define and reinforce positioning, and encourage preference in purchase decisions.

Buy-one-get-one-freePromotion – which includes coupons, rebates, end-aisle displays, retail allowances, and buy-one get-one free offers – are intended to push a short-term sales bump, but are not sustainable.

Few companies want their product lines to be known as the low-price or cheap choice in a category.

That is not the way to create brand equity and superior brand power. Similarly, health and wellness programs shouldn’t be thought of as “pay for participation” schemes.

But, many employees do simply “check the box” and then cash the check.

The question of how and whether incentives work in the wellness arena is still a somewhat open question. And with the Affordable Care Act broadening the scope of spending, we can expect to see increased investment.

Unfortunately, incentives have become the “go-to” solution to drive “engagement” – largely because most company’s cultures aren’t yet strong enough to support the natural appeal of health and well-being improvement.

In employee wellness, the “advertising” component can be thought of as the overall story and rationale for having such a program. We need to deliver good context and sufficient transparency about why this is important – to the company and to the employee.

With strong story-telling and effective communications, the reliance on the “promotion” side can eventually be reduced.

In truth, incentives are probably here to stay. They do serve a purpose in stimulating action, but their use needs to be considered in the context of the overall engagement strategy and desired outcomes.

Posted in Behavioral Economics, Employee Engagement, Incentive Strategy, Wellness Strategy | Tagged , , , , , , | Comments Off

Engagement Learnings from Obamacare, Year I

The volume of news reports and TV ads about Obamacare will soon be on the rise.

Obamacare, Year II is around the corner and hopefully is ready for prime time this year. With a full 12 months to revise, refine, and retool, it is expected that the enrollment process should be far smoother than the initial experience.

Regardless of one’s views of government-led health reform, it is the “law of the land” and will soon be the talk of the town.

healthcare-gov-engagement-mess-learningsRecalling the initial rollout of 2013 also brings to mind a number of lessons related to consumer engagement in healthcare.

They can help shed light on an array of consumer engagement-related concerns and issues and provide many lessons for those of us that work to design, develop and deliver consumer health and well-being improvement initiatives.

While it may not be a true apples to apples comparison, there are valuable learnings to be gleaned from observations of the launch last year.

Beyond the technology failures, we also note other missteps related to consumer experience. Here are 10 takeaways that can be helpful points for those involved with health behavior change strategies:

1. Clear strategic direction.

A well-defined and fully-articulated strategy is the essential starting point for any meaningful behavior change initiative. With regard to the healthcare.gov roll-out, the Wall Street Journal nicely highlighted the absence of a cohesive overarching plan in an article entitled Health Site Stymied By Lack of Direction.

2. Right resources.

This is a big challenge for employee health and wellness – too many sponsors don’t have the proper level or amount of talent. We’ve learned a bit about the government contractors behind the site development, and have to ask, where were the folks that brought us Amazon or Travelocity or Google? When the goal is creating a seamless and smart web consumer experience, we should bring on those with expertise in doing so.

3. Manage expectations.

For both management and for employee participants, it’s best to under-promise and over-deliver – doing things right and coordinating across multiple vendors and departments usually takes longer than we think. Unfortunately, the federal government was stuck on the October 1, 2013 launch date – political will required that date to be firm, regardless of consequences. Smart testing and “soft” launches can help work out unseen bugs.

4. Build a smart selling proposition to attract your audience.

We are often “selling the invisible” when promoting health and wellness, and it takes the right sort of effort to effectively position, package and promote the story. Saying that premiums could be about the same price as your monthly cell phone bill is a weak attempt to “speak the language” without a meaningful “reason why.” Effective consumer marketing needs to be based on a desirable value proposition.

5. Do your homework on consumer insight.

Further to the above point, knowing more about the intended audience will help with both program design and setting expectations. With health reform, we have to ask – where will the market demand come from? Those who want and need health insurance diligently pursued the application process, while the young and healthy weren’t as interested, despite penalties. It’s important to know your market, and gear messages and metrics to their profiles.

6. Break down the silos.

Creating an atmosphere of integration requires shared goals, clarity of roles and dependencies, and good peripheral vision. This was not the case at CMS, as internal departments and external vendors operated in their own worlds, expecting that things would come together in the end – and they didn’t. Sponsors need to have a master integrator (e.g. Chief Engagement Officer) to help ensure coordination of efforts.

7. Consumer experience.

The health and wellness arena has begun to move beyond the clinical mindset toward being more fully consumer-centric in outreach and intervention efforts. With healthcare.gov, the consumer experience was not there. Smart sites let people shop before having to plunk down their credit card (e.g. enter all their personal data). Requiring full registration as step one was a mistake. Consumers expect efficiency online – they’ll opt out if it’s difficult.

8. Local market support.

While headquarters staff at an employer or health plan may lead the wellness charge, the truism that “all healthcare is local” also applies to the workplace, where wellness champions amplify efforts and rally participants. Government navigators were supposed to be fanned out across the country helping to drive health insurance enrollment, but their numbers were and efforts limited by the technical problems.

9. Test small, then expand.

Not everything is ready for prime time when it comes out of the design and development phase. The contractors that testified on Capitol Hill stated that the testing time for healthcare.gov was vastly insufficient for an undertaking of its scope. When trying something new, begin with a segment of the population or a regional office, and then go broad.

10. Scenario planning.

We don’t do enough of this with employee health and wellness programs – it is unlikely that everything will unfold as designed, so be flexible and prepared with back-up approaches. Healthcare.gov assumed that all would work well with the site roll-out and had to scramble to massively expand telephone access and paper applications. Always keep Murphy’s Law in mind. “Anything that can go wrong, will go wrong” – it may not always be true, but it’s a helpful reminder to be prepared for the unexpected…

For 2014, we fully expect significant improvements in the enrollment process and consumer experience. And this new landscape created by health reform also opens up big opportunities for multiple entities interested to reach consumers and encourage healthy behaviors.

Reaching them in the right way, with the right message takes the right strategy and planning process. There are many upsides in this new market that can be achieved with effective engagement.

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Consumer Engagement in the Digital Age

I had a real “aha” moment last week.

While I realize this may not be a news flash to the Health 2.0 crowd, it was a wake-up call for me.

During a launch event for a new mobile start-up company, a startling headline suddenly became crystal-clear to me:

Mobile messaging will rapidly transform our ability to drive engagement.

For all the struggles that health and well-being improvement sponsors have had with engagement, the answer has been right there, in the palm of our hand.

consumer-engagement-in-the-digital-age.1And, enterprising business entrepreneurs are on their way to capitalizing on the many trends that support this opportunity.

During the launch event, the new company’s CEO highlighted an array of facts and trends that sets the stage for a potential explosion of mobile-based, health-related interactions.

Like, how about the fact that in the past two years, there have been more smart phones produced than the total number of television sets manufactured – ever…! And that 90% of text messages are read within three minutes of delivery…?

From these data and the emerging capabilities of many innovative solutions, it’s clear that healthcare engagement and behavior change are in for some real action and real results.

Given that 2/3 of Americans have a smart phone today, we’re past the tipping point for access. We must now overcome rational and emotional barriers to communicating via mobile and get to it.

Whether it is appointment reminders, video demonstrations, social nudging, coaching interactions or any of a wide number of potential applications, mobile is set to become the communications centerpiece of tomorrow.

During the launch meeting, I also gave a talk on Consumer Engagement in the Digital Age. My emphasis was on consumer insights, behavioral economics, the decision pathway, and other structural components of engagement strategy.

I noted that it is very likely that “engagement” is the most overused term in healthcare over the past couple years, at least for those inside the industry.

But, there is a good reason for all the interest, as the megatrend toward accountability relates as much to consumer responsibility as it does to provider actions. The problem, though, is that engagement is often misused, misunderstood, or misguided.

It is too often used as a “generic” substitute for any number of actions including enrollment, participation, interventions, portal visits, activation, or several other similar activities.

We view the idea of engagement as being a “means to an end” – of helping to guide individuals from Point A to Point B, in a segment of their journey toward better health.

I also talked about how consumers make choices, highlighting that we tend to make either rational decisions, impulse decisions, or irrational decisions.

thinking_fast_and_slow_strokeIt’s the last of these that is most vexing for health behavior change and has been “explained” to us by behavioral economists like Daniel Kahneman. His book, Thinking Fast and Slow is an outstanding guide for folks designing strategies to address consumer behavior.

I also presented the Sustainable Engagement Framework that I had developed while at Healthways a few years ago. It is loosely based on the advertising development model and fits well with environments that are relatively static.

But, in presenting it, it became clear to me that there needs to be a new model for consumer engagement in the digital age.

It still needs to be steeped in strategy, but the activation components are far more dynamic, individualized and interactive. This is the beauty of digital, and when it is literally in the palm of your hand and poised for immediate response, possibilities grow exponentially.

Mobile messaging can also serve to better “dimensionalize” the amorphous concept of engagement. We see the potential for a “laddering” effect that moves from our ability to inform and educate on a base level, to being able to engage and empower on the next tier and then moving forward to allow for experience, achievement and advocacy – all of which should produce sustainable behavior change.

This is a fast-moving space with real potential for smart solutions to drive action. With the overlay of this new powerful channel of mobile, these elements remain essential but timelines shrink, interactivity rises, positive actions occur and behaviors shift.

We believe that consumers are open and ready to participate if sponsors are willing to be more bold in shedding their legacy mindsets about how to interface with their constituents.

As my colleagues in London are fond of saying, “Watch this space…

It will change the way we think about engagement.

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The Emerging Shift to “Value” for Health Plans

Movement has begun on the long journey from traditional “fee for service” healthcare to a model that emphasizes value and quality. It’s been underway for a little while now, but we expect to see real acceleration over the next 12-24 months.

the-emerging-shift-to-value-for-health-plansAstute observers of our health system have predicted this shift for some time, but the “market” is often slow to adapt to unfamiliar change.

Health reform and many related initiatives have converged to help fully activate this new model.

The NY Times recently reported on how new payment approaches are beginning to positively impact provider and patient experience (“Health Insurers Are Trying New Payment Models, Study Shows” from July 9, 2014).

We see reports such as these as the first waves of the seismic shift that will transform healthcare in this country. We also see the opportunity and responsibility for health plans to contribute to greater patient-provider collaboration as they continue to evolve and gear up for a more consumer-centric market.

A number of trends are materializing that illustrate this ever-increasing role for consumers in next-generation health plan models.

We’re seeing a rise in healthcare consumerism, marked growth in the individual market, and increased participation in HSA-eligible high deductible health plans.

Transforming-Healthcare-From-Volume-to-Value-coverIn their September 2012 report “Transforming Healthcare: From Volume to Value,” KPMG cites numerous trends that signal this developing reality.

Health plan executives surveyed for the report predicted significant changes in the health plan market over the following five years, with growth predicted for CDHPs (78% said so), Individual (76%), Medicaid (76%) and Medicare Advantage (71%). Most felt that group health insurance would decline in that time frame.

We’re already seeing these predictions beginning to play out.

More recently, AHIP has just released a survey noting there are now over 17 million active HSA-eligible insurance plan members, which is up almost 12% from 2013. Enrollment has increased an average of 15% per year since 2011. Still relatively small numbers, but market conditions favor further expansion.

This evolving megatrend of “Volume to Value” will redefine the health insurance market.

It will move the industry from risk manager and claims adjudicator to collaborative partner and outcomes driver. The health plan of tomorrow can be a true catalyst for healthcare change.

the-emerging-shift-to-value-for-health-plansTo realize this potential, health plans must become more consumer-centric in their strategies, tactics, messages, tonality and service offerings. They need to deliver meaningful solutions to providers and members and help drive collaboration between these two constituent groups.

They can be truly instrumental in helping to solve an array of significant problems and open up opportunities for greater reimbursement and better outcomes.

In the past, health plans have been supportive of their members with health improvement initiatives around chronic disease or preventative testing or by providing relevant health-related information.

But today, health plans are increasingly connecting with providers and members through portals, which have significant untapped potential for increased interface.

Think of the many areas of patient-provider collaboration that can be enhanced with the right sort of technology interface for intervention, interaction, information sharing and other purposes.

A dynamic, user-friendly and valued portal and related mobile apps can be essential in addressing areas such as:

• Gaps in care – helping to better intervene in the area of chronic disease
• Risk reduction – support for those with at risk for disease or complications
• Wellness and prevention – addressing potential health concerns + relevant testing
• HEDIS scores and STAR ratings – for increased reimbursement
• Big Data- make it personal, relevant and actionable

Health plans stand ready to lead the way with smart solutions to many of our healthcare challenges.

By focusing on member experience and delivering value through user-friendly technology, they can fundamentally enhance how members access the health system and address their own health concerns.

The future is bright for the health plans of tomorrow.

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The Rising Business Imperative for Well-Being Improvement

We appear to be at a remarkable crossroads regarding the health of our nation.

rising-global-imperative-well-being-improvementOn one side of the story, there’s the recently published Commonwealth Fund report in which the US healthcare system ranks dead last among 11 industrialized nations – ours is the most expensive and lowest rated. This is not a news flash, but rather an unwelcome reminder of our system’s terrible inefficiencies.

On a positive note, though, we are seeing noticeable movement among our nation’s corporations to step up efforts toward improving the health and well-being of their employees.

Employers have long played a part in the health of their workforce by providing hefty subsidies for insurance, but are now increasingly proactive in promoting health behavior change.

In fact, they are the single sector of our healthcare economy with the most to gain from healthy and productive people, and they are beginning to raise their level of investment and commitment.

Lately, the emphasis has been on wellness, an occasionally controversial topic, particularly when the ROI question is raised. But perhaps more significant is the growing trend toward well-being.

We’re now seeing a fundamental strategic shift In the area of employee health and well-being improvement. The stage is set for a transformation from individual-centered health behavior change initiatives to broader, enterprise-wide well-being improvement culture.

This is a critically important shift. The fact is that the US is losing our global competitive edge, in part because of the relatively poor health of our people. It is well known that our healthcare system is expensive and inefficient, and that many of our people also have detrimental lifestyle habits that can lead to preventable conditions and diseases, and that the direction of both trends is not good.

Global-competitve-advantage-well-being imperative-honeIn our ever-challenging global economy, US companies need high-performing employees – people that can not only get their job done well, but who can contribute to organizational success and growth in many ways.

The real solution to our competitive threats and poor health status is to address the root cause of our health problems and create an environment for people to achieve higher levels of well-being. This can translate to better health and lifestyle behaviors, smarter use of the healthcare system, higher levels of performance and many other positive outcomes.

We are seeing the strategic potential for well-being improvement in a corporate setting and believe that this is integral to our nation’s economic future.

From Wellness to Well-Being

For much of the past decade or so, employer strategies have focused on identifying population health risks and attempting to address them through individual interventions – with mixed results. More recently, wellness has become increasingly popular for companies of all sizes as it adds a layer of “something for everyone.”

The hubbub around ROI for wellness has led to numerous debates and questions about what should be measured, what timeframe is relevant, what baselines should be used, etc. Advocates say that ROI is immaterial – after all, do companies measure the specific value of vacation time or compensation levels or EAP benefits or other resources provided to the workforce?

But wellness has primarily focused on physical health – fitness, nutrition and related habits. It generally relies on a linear process that moves individuals through various gates, usually providing a reward for completing certain activities. It is largely tactical, short-term oriented, and often led by an outside vendor.

well-being-healthways-engagement-strategy-honeWell-being, on the other hand, involves organizational transformation and encompasses the whole person. Well-being reflects continuous improvement. Well-being requires greater internal advocacy and cultural adoption. It takes a long-term view and a committed executive team.

Among the leaders in this area are Gallup and Healthways. Together these two companies have created the Gallup-Healthways Well-Being 5, a scientific survey instrument that measures, tracks and reports on the well-being of individuals and organizations. They have outlined the five essential elements of well-being as follows:

• Purpose: Liking what you do each day and being motivated to achieve your goals
• Social: Having supportive relationships and love in your life
• Financial: Managing your economic life to reduce stress and increase security
• Community: Liking where you live, feeling safe and having pride in your community
• Physical: Having good health and enough energy to get things done daily

Several studies have correlated the importance of high levels of well-being to workplace performance and both Gallup and Healthways, among others, continue to study these and other related linkages.

We see this emerging trend toward broader adoption of well-being as real and important. The knock on wellness has been that “it doesn’t really work” – hence the ROI debate. Wellness does have its place, but it is mainly one dimensional, with focus on physical health.

The move to well-being encompasses the whole person, as defined by the five dimensions noted above, which together help enhance our true human potential. Imagine the added economic power of corporations if they were operating with optimized, integrated and energized human capital at all times…!

Engagement and Culture

One of the major challenges with employee health behavior initiatives has been participant engagement. By and large, we are trying to tell people to comply with certain protocols and direct them to improve their health. But human nature and behavioral economics tell us that this is a nearly fruitless endeavor.

Incentives have become standard fare for employers seeking to gain better uptake of the programs they sponsor. But most of this investment is wasted because the extrinsic motivation it generates is short-lived.

True behavior change must be intrinsic. It cannot be “bought” but rather must be experienced at the core of one’s self – and that is where well-being fits and how we can go farther and deeper in driving cultural acceptance.

Well-being is not just a turbo-charged version of wellness. It needs to be an essential component of corporate strategy, embraced at the top and adopted at all levels. It is not a one year “program.” It must become central to the company’s culture.

The CEO and CFO must both believe in well-being for it to permeate the enterprise. When this happens, the Engagement Gap ceases to be a problem, as individuals will be drawn to change rather than being told what to do. As this occurs, the company culture evolves to further support engagement and the two become symbiotic.

Getting Started

As more companies take on the well-being challenge, they are learning that there is no “plug and play” solution. It takes real commitment, investment and patience to do it right. Many employers have a good foundation already, but will have to step it up.

Many solid vendor companies can be extremely helpful in guiding the process – including Limeade, RedBrick Health, and Healthways. As good as they are at what they do, they need active participation of all key stakeholders at the sponsoring employer. The employer will have to address the following areas:

Business Rationale. Define and articulate the reasoning for this commitment, and convey it to the workforce in a clear and transparent manner. It is a journey all must willing to take. It will go through phases, and through bumps along the way, but if the business rationale is sound, it is a highly worthwhile undertaking.

Cultural Integration. Well-being is not a program, it is a fundamental business approach. It will require that non-aligned policies and practices be refined and that new standards be set. It may take some strong Design Thinking to work through the many barriers and challenges. Fortunately, much good learning is available from companies that have already made the commitment (e.g. Zappos).

Smart Marketing. While clear articulation of the “WHY” is the starting point, a smartly designed, sustained communications story needs to flow to the population. It will take different touch points and different messages to address the multiple segments of the workforce population. A marketing process that incorporates Systems Thinking will help deliver a well-orchestrated and integrated set of campaigns.

Well-Being: The Time is Now

There is no better time in our nation’s economic history to undertake the challenges and opportunities of well-being improvement.

Employers can and should be a driving force in helping to improve the health of our people and should be able to earn the economic outcomes that come with a happy, high-performing workforce.

Employers can and should be leaders in promoting positive change and addressing some of the root cause of many health issues by promoting well-being.

The time is now.

Posted in Chief Engagement Officer, Employee Engagement, Engagement Strategy, Introduction, Well-Being | Tagged , , , , , , , , | Comments Off

The Value Prop for the Chief Engagement Officer (CNO)

These days, it’s common for wellness vendors to talk about the value proposition of their service offerings and solutions. Doing so provides focus, differentiation and consistency of message in their pitches. It also helps move beyond some of the quantitative dimensions of the never-ending ROI question.

Health and well-being improvement initiatives have myriad near-term-and long-term benefits. Many industry leaders firmly believe this and certainly the breadth and depth of program expansion provides supportive evidence as well.

value-prop-for-the-chief-engagement-officer-cno-engageBut, despite this increased emphasis, the Engagement Gap remains large. Towers Watson reports that 63% of employers cite “improving employee engagement in health and productivity programs” as a top priority.

The Wall Street Journal recently published a section on Health Care in which the lead article focuses on “the last mile” – engaging the patient to take action on their own to complete their care and achieve a good outcome.

This is but one of the many recent articles, commentaries and pronouncements about the importance of engagement in the area of health and well-being improvement.

As this is my passion, I certainly take note of the direction on this issue. It’s past the point of being identified as critically important, but hasn’t yet achieved organizational adoption.

It’s been our view that engagement needs to be seen as a business discipline – like marketing or communications – and that it requires dedicated leadership, sufficient resources, and clear strategies.

We have been promoting the adoption of the Chief Engagement Officer (CNO) role and believe that the position needs to have a distinct value proposition for it to emerge and flourish. And while it may not be right for all companies, you should consider adding it to your organizational structure if you are serious about driving sustainable health behavior change and creating a culture of well-being.

Employers have been steadily increasing their financial commitment to wellness and related initiatives that can positively influence health behavior change. We see this new CNO role as one that manages this investment and maximizes outcomes in three specific ways:

1. Big Picture Oversight

The CNO will define the overarching strategy and plan for health and well-being improvement in alignment with the corporate mission and vision. This integration is essential for long-term positive outcomes and should also address the culture, values and context of well-being.

The role will also serve to strengthen the total value story by applying business metrics to the defined objectives and intended results. They should help lead vendor relationships and monitor all relevant points of measurement.

The CNO needs to be the Value Storyteller to the workforce and to the C-Suite.

2. Ground Level Planning

While the expertise in developing and delivering the communications plan, incentive design, program enrollment and other essential components lie elsewhere, the CNO will orchestrate the integration of all the elements intended to stimulate employee interest and response.

Population knowledge and insights need to be incorporated along with peer influence opportunities, and relevant segmentation strategies.

The CNO needs to be the Field General that utilizes the broad view to ensure precision tactical delivery.

3. Process Flow and Marketing Optimization

Quality experts like to talk about business as a system, with inputs and outputs that have to flow efficiently to maximize value. Health and well-being improvement initiatives are systems, too. We are basically aiming to help individuals through various lifestyle and habit changes that will enable them to live their lives in a healthier state and to pursue well-being.

Many initiatives lose effectiveness when the marketing points of contact and influence are not well-organized and connected. We need to help employees along their well-being journey, and be able to apply marketing techniques to help convince them to “buy” what we have to offer. This combination of process flows and consumer marketing is integral to driving successful outcomes.

The CNO need to be the Sales Leader of a well-oiled marketing machine.

There’s a lot more to this story, as the main aim here is to begin to shape thinking toward the value possibilities of the Chief Engagement Officer.

We see early adopting companies beginning to move in this direction, by elevating the area of engagement strategy.

Titles may vary along the way, but the main thrust here is to emphasize the importance of better connecting people to programs, and to enjoying the positive results that will accrue.

Feel free to contact me if this topic is of interest to you and I’d be glad to discuss ways this can help drive better and deeper consumer AND customer engagement.

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Employee Health and Performance: Time for the Chief Engagement Officer?

This article was prepared for Game Changers, a publication of The Troyanos Group and appeared in their April, 2014 issue.

Over the past decade or so, corporations across America have become much more actively involved in the health of their employees.

It wasn’t too many years ago that the employer’s primary connection to health was simply the provision of insurance coverage. But as the cost of health plans saw double-digit increases in the late ‘90’s and early ‘00s, things changed.

The-Time-is-right-for-the-chief-engagement-officerNew money-savings strategies emerged, including cost shifting to employees, the narrowing of benefits in certain areas, and expanded use of disease management and wellness programs as a means of reducing medical expenses. In time, premium increases diminished, but the interest in promoting better health accelerated. Now, we’ve seen clear evidence that corporate wellness has passed the tipping point.

Today, virtually all employers offer some type of wellness program to their populations, with the expectation that it will help reduce health risk, enhance the culture or improve productivity and performance.

Despite some ROI-related concerns, most companies are convinced of the positive impact of such programs and have identified an array of both tangible and intangible benefits and outcomes to rationalize the investment.

Employee Participation

For wellness programs to achieve these benefits and outcomes, people need to participate. And here’s where we’ve seen some interesting challenges.

Towers Watson, in their 2013/2014 Staying@Work report, cites that 63% of surveyed employers said that a top priority is to improve employee engagement in health and productivity programs.

Companies and their vendor and health plan partners are doing what they can to help activate employees in their health and well-being improvement. Employees don’t naturally gravitate to these offerings, so some amount of extra effort is needed to nudge them aboard.

This is often in the form of financial incentives. In fact, the use of incentives to drive participation is at an all-time high. The National Business Group on Health/Fidelity Investment survey found that 86% of employers provide financial incentives as an impetus to participate in their programs, and that the average payout was just over $500 per employee in 2013.

But the use of incentives doesn’t necessarily produce health behavior change. Financial inducements can be helpful in getting people “through the door” to complete a transaction, such as a Health Risk Assessment or enrollment in health risk coaching, but many individuals just “check the box,” collect their cash and miss out on the opportunity for self-improvement.

Engagement Strategy

This produces low levels of engagement and very few companies are fully addressing this area as a means to long-term and sustainable health behavior change.

On the health system side of the equation Patient Engagement has been touted as the “Blockbuster Drug of the 21st Century.” But on the employer side, where there is a need for better and smarter consumer health engagement, solutions remain elusive.

Vendors, health plans and sponsors are putting forth good efforts to drive better consumer engagement. We’ve seen an array of smart developments, from mobile apps and social wellness to outcomes-based incentives and behavioral economics. Unfortunately, too many efforts are fragmented, nonaligned, and short-lived.

Companies obviously believe that there is real value and importance in this area, but the Engagement Gap is keeping them from achieving their full potential.
Our view is that there simply hasn’t yet been enough commitment or budget to produce meaningful change.

Chief Engagement Officer

We believe that engagement for health and well-being improvement should be viewed as a means to an end. And while it may be good to have more of it, it also needs firm direction and clear intention. It needs strategic purpose at its core. It needs specialized expertise and dedicated resources.

Similar to a good marketing campaign, effective engagement needs to address rational and emotional barriers to change. Corporations need to articulate the consumer value proposition that will result from positive shifts in attitudes and actions, embrace the process of behavior change, disrupt inertia and promote and reinforce healthy habits.
Here’s where the idea of a Chief Engagement Officer comes in, as the point person to provide leadership and oversight.

We see the essence of the role as incorporating three key components: business discipline, strategic process and consumer marketing. It would be oriented to developing approaches that help individuals through their own decision pathways relative to health behavior change.

We’ve outlined some key elements of the “job description” for the Chief Engagement Officer role. We see that it would encompass the following areas:

1. Strategic Intent. Health and well-being improvement requires a well-crafted strategic framework. It is essential to define the overarching approach to achieving specific, defined business objectives for health behavior change and have the authority to execute against these goals.

2. Behavioral Science. We know that individuals exhibit irrational behavior when it comes to lifestyle choices and health-related decisions. We need to understand and apply the knowledge of how people make choices, incorporating consumer insights and behavioral economics.

3. Segmentation and Tailoring. Individuals learn and respond to stimuli in different ways. We need to define relevant population segments at the macro level and more have personalized tailoring at the micro level, perhaps even looking at individual personality profiles.

4. Targeting and Delivery of Effective Messaging. Defining and conveying the right story to the right population is necessary to penetrate the market. The Chief Engagement Officer must lead the design, development and delivery of communications outreach that inspire and reinforce health behavior change.

5. Organizational Integration. This may be the most underrated area because gaps between silos are often unseen. This role needs to ensure that all related disciplines, vendors and business units are strategically and operationally aligned toward achieving the business objectives. Each entity needs to know their place and their responsibilities, particularly related to “hand-offs.”

6. Measurement and Refinement. Program initiation must occur with the end goal in mind. We have to have expectations of what we intend to accomplish. Constant monitoring of metrics is needed, with the view to making midstream modifications when appropriate, and delivering accurate and meaningful data and regular updates to stakeholders.

7. Continuous Improvement. Too often we think of programs in one year time-spans, probably based on the mindset of the annual enrollment process. But we need to also be considering shorter “sprints” while planning for the long term, always seeking to apply lessons learned, share best practice and strive for improvements in design, process, delivery and outcomes.

We see these seven functions as optimal areas of responsibility for the Chief Engagement Officer role. Another capability of the position is to be an integrator. There has to be smart balancing of strategies and tactics, with visibility into and across the organization. The ability to operate in a matrix structure and serve many internal stakeholders is also key.

The Time is Now

We are in a fast-evolving time in this uncertain economy, and many companies have held back on hiring.

It’s time to make the investment in this role because this engagement strategy leadership role can be an important catalyst to better workplace performance, and therefore profits.

Smart companies will accept the challenge and should reap long-term benefits.

Frank Hone is Chief Engagement Officer at Healthcentric Partners, Inc., the first and only engagement strategy and marketing consultancy for employee health and well-being improvement. He previously served as Director of Sustainable Engagement at Healthways, following a career in consumer and healthcare advertising, including stops at Ogilvy Healthworld, Bates Healthworld, Rubin-Ehrenthal, Medicus Consumer/DMB&B, Ally & Gargano and Kelly, Nason. Frank can be reached at 917 375-7716 and frank.hone@healthcentricpartners.com

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Customer Engagement: More is Better.

Even though I’ve spent most of my career wearing a consumer marketing hat, I’m increasingly convinced that the key to success in driving health behavior change is customer engagement.

Customers are ultimately responsible for approval and oversight of vendor-led programs, but too often are not fully engaged themselves. Our belief is that this contributes to a significant portion of today’s Engagement Gap.

madison-ave-well-being-strategyBack when I was advertising account management, the customer always held the keys. Agency recommendations on budgets, copy, media, research and all other aspects of marketing were subject to client refinements and approvals. And they were actively engaged in all aspects of the ad campaigns.

Most client-agency relationships were built on trust, mutual respect and a shared recognition of what’s right for the business. Sure, there were plenty of disagreements, but the depth and breadth of the relationship enabled for reasonable solutions.

This degree of relationship-building is lacking in health and well-being improvement. There are gaps in the vendor selection process and shortfalls in account management. And this limits the potential of many well-designed programs.

For more on this, please read on …and feel free to contact me if you could use help in this area. Our consulting work can help you drive better and deeper customer engagement.

We see many employers today bringing on new and different vendors to help drive better participant engagement in their health and well-being improvement programs. Hefty incentives, healthy competitions, wellness games, wearable devices and many other new ideas are all being implemented in an effort to gain greater employee interest, action and outcomes.

Mind-the-Gap-Customer-EngagementBut the first step to success in all this is effective customer engagement.

This sets the tone for the direction, design and deployment of the right mix of health and well-being services.

One critical problem is that customers too often base their vendor choices on insufficient information and insight.

Many decisions are driven by consultant-led RFP responses and finalist meetings that bear little resemblance to the actual experience of program roll-outs.

In the advertising business, it was all too common for the agency to bring in their best and brightest to the pitch, only to shift to the bench team once the account was won.

Too many customers also expect vendors and health plans to “do it for them.” They want low-cost, turnkey solutions that produce measurable results. This doesn’t reflect reality – employer teams must play essential roles in engaging and encouraging their workforce.

And inside customer organizations, there are often silos that diminish the impact of many efforts which rely on cross-functional integration. Strong account management leadership can help this and many other challenges that HR and benefits folks are not normally asked to address.

Relationship Building

Employers purchase many services that include easy-to-use supplies, or plug-and-play programs, but there marked differences between buying tangible goods versus buying intangible services.

If a buyer is a spreadsheet-focused, pencil sharpening accountant buying from the low cost producer of widgets, then there is virtually no need to build a business relationship. Transactions will continue as long as price and quality standards are met.

But in dealing with the intangibles of health behavior change, there are good reasons to forge a strong strategic relationship between buyer and seller.

Mad-Men-Three-Martini-Lunch-customer-engagementHaving spent a career in advertising, I’ve seen quite an array of approaches to building customer relationships.

Remember the three-martini lunch? Me neither, but I do enjoy watching Mad Men…!

Until the procurement people began barging in during the late 90s, advertising execs and their client counterparts really did emphasize their business partnerships.

This is far less evident in the relationship between employer/buyers and vendor/sellers of health and well-being improvement services.

Consider the way many such services are pitched to customers today – too often via intermediaries and through electronic exchange of documents and proposals – without ever really exposing the seller to the buyer’s team, their population, and their specific needs.

The relationship development and trust building gets short-changed.

A better scenario is to enable customers and their potential vendor partners to explore their mutual requirements in a systematic and collaborative way. Vendors need to understand the customer’s culture, priorities, demographics, work style, etc., and align their resources appropriately. And there needs to be better strategic capability in on-going account management.

One of my initiatives at Healthways was to craft a strategic approach to building long lasting customer relationships. We called it The Well-Being Journey, and it encompassed a three-year timeline from the initial sales pitch through to the delivery of Year II metrics.

Participant Activation

On the participant activation side, there are many ingredients that feed into employee engagement. We map out some of our high-level engagement activities in our Sustainable Engagement Framework:

Engagement Framework

These and related elements need to come together and form an efficient system which needs to be well coordinated for best impact. Each of these inputs and outputs can be optimized when they done collaboratively with vendor partners.
Our industry has many opportunities for improvement. We have the ability and responsibility to help change lives for the better.

Building good and strong vendor relationships with companies that have strategic account management teams, is one key to success.

Put in place the right sort of engagement strategy and there is a far better chance to achieve positive outcomes and produce greater efficiency and impact.

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Price Transparency: The Time is Now.

Though it is sometimes hard to see through the thick haze of government-imposed health reform, the US is also on a parallel path toward market-based healthcare consumerism.

Free-market solutions have taken a back seat to politics for the past few years, but the journey which began with the introduction of high deductible health plans a decade ago, continues today.

brill.pill9.inddThe essence of a free market is one that features consumer choice, broad access, open competition and price transparency. The reality is that none of these are in place in healthcare today.

The area of price transparency, however, is now on a fast track toward broader market acceptance and increasing consumer usage.

Here are five notable events or trends to note which support the continued expansion of the price transparency in healthcare:

1. Published data. One seminal moment occurred in May of last year, when CMS released data from 3,300 hospitals that listed the average prices they charged Medicare in 2011 for the 100 most common inpatient services. They followed this up a month later with information on pricing for 30 common outpatient procedures.

2. Major article. These data releases followed Steven Brill‘s epic Time Magazine article that appeared in March. “Why Medical Bills are Killing Us” highlights numerous examples of outrageous pricing scenarios and their impact on patients. For healthcare insiders, it wasn’t breaking news, but it did bring significant media coverage to the issue for the general public.

3. Vendor companies well capitalized.
There are at least a couple dozen start-up firms specializing in this area, including Castlight Health, Change Healthcare and ClearCost Health. MedCity News recently reported the amount of investment firm input into the start-ups at over $400 million since 2010.

4. Health plan price tools.
Health insurers have been actively pursuing this area and most offer some sort of price comparison resource to their members. In fact, Catalyst for Payment Reform notes that 98% of health plans do offer an online price comparison resource – yet only 2% of members who have such resources actually use them.

5. Higher deductibles.
Over the past few years, many consumers have become responsible for a larger portion of their medical bills. Kaiser Family Foundation reported that in 2013, 38% of those with employer health coverage had deductibles of $1,000 or more, compared with just 10% in 2010. And the impact of health reform will drive many more insured to higher deductibles.

The Wall Street Journal recently published a front page article on this topic as well, lending further credence to this important trend.

We’re definitely on a path toward broader availability of price information for consumers.

This is a big step forward in the continuing move toward healthcare consumerism in the US market… stay tuned…!

Note: Later this month, I’ll have the privilege of moderating a panel discussion on Price Transparency at the HR Executive Health and Benefits Leadership Conference in Las Vegas. Joining the panel will be Clayton Nicholas of Change Healthcare, Chris Santas of ClearCost Health and Scott Matthews of Castlight Health. Each of their companies has been working to help bring a greater degree of consumerism to healthcare, by helping individuals make smarter healthcare decisions.

This is an important time for this burgeoning healthcare service. Employers and health plans are increasingly promoting the use of price transparency tools and resources. We expect a full house with many great questions and equally insightful responses. The panel is scheduled for Tuesday, March 18 at 1pm.

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Consumer Segmentation: The Right Route to Better Engagement…?

Chances are, you’ve received some kind of “Dear Resident” direct mail solicitation in the past week or two. And, unless it featured a coupon or something of real or perceived value, you probably tossed it into the can.

In a way, that’s how many health and well-being improvement programs are introduced. Limited personalization, broad message, same story for all. They usually fall flat, which is the main reason for today’s all-too-common participation incentives.

Consumer_segmentation_healthcentric_health_well-being_improvementBut now, taking a page from the consumer marketer’s playbook, many employers, health plans and vendors are exploring segmentation as a way to gain richer insights about their populations to deliver more tailored messages and interventions.

Consumer segmentation goes beyond traditional methods of claims-based stratification and risk-identifying algorithms. It incorporates geo-demographic coding, attitudinal and lifestyle factors, buying habits and other inputs.

Various types of personality assessment are also emerging – and this is an area to keep an eye on.

By knowing more about the key characteristics of end users, sponsors are better able to craft the outreach and interactions and better influence health behavior change.

Consumer product marketers have long used strategic segmentation to fine-tune their target audience definition, optimize media selection, and generate differentiating ideas for creative development. This deeper understanding leads to more persuasive and effective advertising and marketing campaigns.

With the implementation of segmentation for health promotion, there’s a higher likelihood of achieving far better one-to-one interactions that will lead to more positive actions.

Here is a thumbnail of some of the major players in consumer segmentation:

- The Futures Company offers their Living Well segmentation. They identify six unique consumer segments, which differ in their health challenges and health engagement, enabling insightful profiles and the opportunity for impactful and targeted communications and programs. These segments can be generated either by secondary data or through self-administered questionnaires.

- Nielsen features PRIZM, probably the oldest established segmentation methodology (1971). They utilize 66 unique segments based on socioeconomic levels, which take into account characteristics such as income, education, occupation and home value, and carry intriguing identifiers such as Blue Blood Estates, Crossroads Villagers and Shotguns & Pickups. These segments are further grouped into 11 Lifestage Groups and 14 Social Groups.

- Experian has Mosaic, a household-based consumer lifestyle segmentation system that classifies all US Households and neighborhoods into 71 unique segments and 19 overarching groups. Mosaic also defines 10 categories of insights around dimensions such as who we are, where we live, how we get by and how we live our lives.

- FICO uses Segmentation Models for custom analytic engagements. They work with customers to understand key metrics and develop measures of customer value. Their approach is to analyze customer-provided data and append FICO inputs to provide insights on each segment.

Each of these firms has something a bit different to offer, and each can provide valuable insights into your specific populations.

As noted above, consumer segmentation can be a powerful strategic tool, but it also needs to be utilized with clear objectives, the ability to deliver relevant communications messaging and tailored interventions to each segment, and the systems in place to measure impact in an accurate and timely manner.

It is commonly believed that the closer we can get to 1:1 marketing, the more effective we are likely to be.

Strategic segmentation of your population can be an important step toward achieving this.

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