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Outcome- vs participation-based incentives in wellness programs

Health benefits represent a chunk of state and local governments' budgets.

Health benefits represent a chunk of state and local governments' budgets. In fact, according to the Governing Institute, they totaled $132 billion in 2008, underscoring why many agencies and companies have opted to launch employee incentive initiatives with an eye toward improving health.

Some of these programs are offering public and private employees the opportunity to earn higher healthcare contributions for doing things such as losing weight or lowering their blood pressure or cholesterol, Mark Funkhouser wrote in a post for the institute.

There are alternatives to outcome-based incentives as well. Some governments are instead choosing to utilize participation-based initiatives, i.e. rewarding staff members for participating in certain activities rather than achieving certain numerical goals.

Funkhouser explains that for wellness programs, a participation program may actually be more effective. It promotes lifestyle change rather than achieving a goal that may be hard to maintain.

Overall, wellness programs have been succeeding for companies that measure their ROI, according to research from the International Foundation of Employee Benefit Plans. Eighty-four percent of respondents were achieving healthcare savings.

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