Following my last post I have a few more thoughts on segmentation and the impact it has on driving successful health and wellness incentive and communication programs.

In order to be of value, segments must be:

1) Identifiable: distinctly different on measurable variables
2) Substantial: large enough to matter
3) Accessible: reachable through a variety of communication channels
4) Stable: persist over time
5) Responsive: respond to efforts aimed at them
6) Actionable: differences are able to guide communication and reward strategies

In my last post I spoke briefly about the fact that organizations tend to use the health status pyramid or grid (see below) as a starting point for a segmentation strategy.

However, another method of beginning a segmentation strategy could be based on current and potential value of a participant in a specific health and wellness track.

The segmentation strategy sets the framework for whom, how and what the organization wants to communicate and reward. Essentially, segmenting a wellness participant population into more finite segments will enable an organization to better understand 1) how to engage their members, 2) direct the appropriate health management efforts, 3) identify which rewards will have the greatest impact on that population and 4) determine how to make communications more meaningful.

Talk, treat and reward differently. But how do organizations talk, treat and reward differently? The simple answer is the use of segmentation. Segmentation occupies the middle ground between mass marketing and one-to-one marketing methodology. As I have referenced in a previous post prescriptive one-size-fits-all wellness programs are being seriously challenged as organizations continue to struggle with low participation and engagement rates.

As an increasing amount of health data becomes available, employers and health plans are spending more time mining data in an effort to better understand the healthcare issues of their population. However, additional data points beyond health data are being considered in trying to better understand an organization’s unique population. The result: an increasingly narrower set of population segments where wellness interventions and communications are created to better fit the unique needs of those segments.

One of the challenges that organizations continue to face is in determining 1) the most appropriate approach to take, 2) how to begin the segmentation process and 3) what data they need to accurately segment the population.

A common approach has been to utilize the health status pyramid below as a method of segmenting.

While this may be a good place to start, my clients are beginning to acknowledge that the health status pyramid is still too broad to effectively engage their population in optimal health interventions. Additional research and methods of analyzing the data will be necessary to develop more like-to-like segmentation strategies. That additional data may include claims data, activity data, demographics and attitudinal and behavioral data.

Organizations may want to consider some of the following best practices in order to develop effective wellness and disease management segmentation strategies. While these practices seem like common sense, often times they are overlooked and these basic principles often get bypassed in the haste to get to market.

1) Define and measure success: build benchmarks and hurdles up front to drive growth
and ensure the ability to measure program effectiveness.

2) Talk with, treat and reward participants differently. Consider developing a
segmentation strategy based on “value” that leverages participant differences.

3) Differentiate your health interventions and communications by segmented campaigns
to drive participation and engagement.

4) Ignore unprofitable participants. Those that are already catastrophic will continue to
cost substantially more than any wellness program can mitigate. Place investments in
segments that will yield the most value.

Segmentation is becoming a critical success factor in wellness and disease management programs for several reasons. Understanding how participant types are different allows for a more effective health interaction because:

• Segments whose members think differently might be persuaded differently to engage in the use of health services.

• Segments with different needs allow health managers and health plans to address those needs more directly.

• If segments differ in demographics, health status and readiness for change that enables health managers and health plans to target unique messages to them that may have a more sustainable impact on engagement.

Are your organizations using a segmentation strategy in its health and wellness program design?

Chances are the answer ranges from “maybe” to “no clue” According to a recent Hewitt and Associate survey, employees agree on the importance of understanding their personal health risks, but struggle with what the next steps should be. As someone who works in the healthcare field I admittedly find that the results of my Health Risk Assessment (HRA) leave me somewhat dazed and confused. Do you feel the same way?

There appears to be a great opportunity for health coaches and HRA providers to do a better job of taking the HRA data and enabling health coaches to better educate participants on not only what the HRA data means, but what actions a person should take given the data results. Have you experienced a situation where this is working well?

A new report from Trust for America’s Health and Robert Wood Johnson Foundation indicates that obesity rates rose for the second consecutive year in twenty-four (24) states and astoundingly NO states experienced a decrease in their obesity rates.

Here are a few insights to consider:
• More than 25% of adults are obese in 28 states.
• More than 20% of adults are obese in every state except for Colorado.
• In 1980 the national average of obese adults was 15%. Today it is estimated that 66% of American adults are overweight or obese.
• It is estimated that 23 million children are overweight or obese.

These statistics are frightening when you consider the fact that obesity is a trigger for many chronic health issues that plague our health system and continue to contribute to the escalating costs of chronic and multi-disease state care. Even more startling is the fact that the report found that many of the promising policies that have emerged to promote physical activity and good nutrition are not being adopted or implemented for a variety of reasons.

While organizations have typically used a disease management approach to try to manage and control weight of their employees and members, there is a company called Tangerine Wellness , has very compelling success stories about their ability to help people lose weight and keep it off. Recognizing that obesity is an issue that leads to many other health issues, Tangerine Wellness has used some basic principles of social networking, competition and long-term incentives to drive some amazing results for people who are overweight. Their success has been steeped in the understanding that losing weight is hard, but keeping it off over a long period of time can be even more difficult. Through the use of intermittent rewards and effective communication that recognizes participants when they hit key milestones, Tangerine has produced ROI numbers upward of 5% and has achieved participation and engagement rates averaging between 60% to 80%.

When considering programs where the health issue is as pervasive and serious as obesity, corporations may want to consider rewarding on outcomes over a 2 to 3 year period rather than soley on participation in a weight management program. Outcomes-based incentive programs do require more focus on HIPAA criteria however, I believe the ROI that companies like Tangerine have been able to deliver more than justify the investment in a robust outcomes-based incentive strategy.

DMAA recently conducted a survey that indicates there is increasing interest in employer-based wellness programs. Some key points that the survey highlighted were:
• Keys to wellness program success include a strong willingness on the part of the participant to change, member engagement and physician engagement.
• Health plans and employers view participant satisfaction with wellness efforts as important measures of success.
• Organizations have an expectation of data integration across multiple health and wellness programs.
• Health Risk Assessments are the most popular wellness initiatives among employers.

Some of the conclusions of the survey fall in line with what I regularly see in the marketplace, but I thought there were two interesting points made in this survey. The first, being the role of the physician in the wellness program. So often, the conversation around wellness programs focuses on the participant, with very little attention given to the critical role that physicians and other types of care providers can and will need to play if we will ever truly achieve a well nation. When focusing their efforts on wellness incentives, employers and health plans alike rarely discuss how to motivate and recognize care providers in driving wellness.

The other interesting finding was around participant satisfaction being used as a measure of success. Most often, my clients use measures such as participation rates, engagement rates, health scores, etc. … to measure program success because those measures help to justify the financial investment necessary to maintain these programs. When you look at companies who have had success with wellness programs such as IBM, Pitney Bowes, Pepsi Co. there seems to be a common thread that has enabled these companies to be so successful and that common thread is that they have all created a culture of wellness that is a business imperative. For these organizations, wellness is part of their business strategy and part of their performance culture – it is a competitive advantage.

I would be interested in hearing your thoughts as to keys to success in wellness programs. Are they in line with the DMAA survey or if they differ, how?

A recent New York Times article discusses the impact economic woes continue to have on individuals increasingly cutting back on prescriptions that they need.

According to IMS , the number of prescriptions dispensed in the first eight months of 2008 was lower than last year, the first downturn in over a decade.

The ramifications could be disastrous to a health system already facing monumental challenges in trying to stem rising costs and keep people healthy. Think about it this way:, if too many chronic condition patients stop taking medicines like cholesterol-lowering statins or anti-hypertensives for too long the result could be catastrophic leading to expensive emergency conditions, such as a strokes or heart- attacks. Catastrophic situations only serve to increase a rapidly escalating healthcare cost base.

Of course, there is a school of thought that America is over-medicated to begin with and that perhaps the prescription cuts are beneficial. In some cases, I might agree with this philosophy, but it seems like a foregone conclusion that individuals with serious conditions such as diabetes, high cholesterol, hypertension, and obesity either stretching out their medicines or not taking them altogether, will result in a truly bad and expensive outcome for that person.

There also was an interesting fact in this article regarding the spend on pharmaceutical products in total in the U.S. Pharmaceuticals only constitutes about 10% of the total healthcare spend in the country. From a financial perspective, I would say that medicines still appear be a more cost-effective way of mitigating higher medical costs, such as hospitals and physicians fees. So the challenge for our healthcare system is finding methods to reinforce that message and help consumers to make the right decisions about using their medicines as a method of preventing more serious acute health issues.

Note to health plans: if you are offering health and productivity incentives for members to use health tools and services … make sure to pay them out or it could really impact your members’ feelings of goodwill and loyalty.

My health plan recently launched a health and wellness program with a great amount of enthusiasm and fanfare. To go along with what looks like some wonderful health services, the plan was also offering some intriguing and exciting wellness incentives and rewards for participating, staying engaged throughout the year and providing feedback on their program.

Sounds great doesn’t it? The first order of business was to take a Health Risk Assessment and earn a $100 gift card. Given that I am very focused on proactive healthcare and preventative maintenance (because of what I do for a living), I immediately called the 800 number and energetically informed them that I wanted to enroll in the new Health & Productivity program. This is what I heard, “I am sorry, but you are not eligible for this program. In fact you aren’t in our database as even being a member of our plan.”

I ask, “How could that be? I have my member card with my member ID and I just received a packet with all of the wellness program information.” I was then told that they would have to escalate this for further investigation … that investigation took 14 days. Ten calls later and many chats with “managers” of my health plan it was indeed confirmed that I was a member and eligible for the health and wellness program, however, there was one day left for me to take the Health Risk Assessment and receive my $100 gift card promotion.

I immediately took the Health Risk Assessment and awaited my gift card in the mail, dreaming of the things that I could do with that gift card – a nice 90 minute stress relieving massage … aahh. I waited and waited for weeks and then months. Finally, I called my health plan again and inquired about the status of my gift card only to be told that even though I had completed the HRA, the information was not received until the morning after the promotion ended and therefore I didn’t qualify for the gift card.

The long and short outcome of this story: I will never participate in my health plan’s wellness program again Instead I will stay healthy my own way, and if I have a choice to change health plans, you can bet that I am going to do it in a heartbeat.

This is an interesting article regarding how hospitals may benefit under President-elect Obama’s health reform plan. would be interested in hearing your perspective on this topic.

Hewitt Associates recently published a survey on what to expect in healthcare in 2009 and the news is not pretty. With average raises hovering somewhere between 0-2%, the average healthcare premium is expected to increase 8.9% - well above inflation and salary increases. Yet, employees will continue to see more of the cost burden shifted to them in their benefits this year. I am no mathematician but it doesn’t take much to clearly see that this isn’t sustainable for employers and employees alike.

Health plans and employers must find ways to reduce these costs and employees have to become an active part of the solution. In a recent post, (link to the Employers Role in Health) I discussed the fact that only 12% of employees felt that employers had a role in educating and encouraging them to be healthy. That number must increase if we are to collectively stem the skyrocketing costs of care. Obviously the entire system contributes to these cost escalations, but employers and health plans can act as the catalyst for reshaping their organizations by making the right investments in wellness programs that become part of the organizational culture.

Once again, the key challenge for organizations is driving participation and engagement in these programs in order to encourage healthier habits and decision making. Health Risk Assessments are no longer good enough. While incentive and reward programs are focused right now in trying to drive initial participation and engagement, I wonder if organizations should start getting bolder with their incentive and reward strategy by offering meaningful rewards for health outcomes as opposed to participation. Have we reached a point where organizations need to push the envelope in thinking more about what is driving these costs up – inappropriate utilization and poor health outcomes and engage individuals in proving that they can indeed be healthy and recognize them for such an accomplishment?

Marc Siegel wrote an interesting op-ed piece in USA Today regarding the effects the economy is having on overall health and wellbeing. The general point he was making is that the stress levels and anxiety people are feeling right now are beginning to take a toll as individuals lose sleep, eat poorly, fall into depression and increase anxiety levels over job concerns, 401(K) values and general financial health … all of these activities also impact the general health and well being of an individual.

Given the amount of concern over the economy and the general state of morale at most corporations, I am surprised that more organizations are not focusing wellness efforts on stress management and mental health. The USA Today piece offers some relatively simple suggestions for dealing with stress: “The best advice is often the simplest: Eat healthy food, sleep right and avoid obsessing on the doom and gloom. Do yoga, meditate or exercise regularly to combat the growing stress.” It is difficult to imagine that individuals can focus on these measures given what is going on around them. These are extraordinarily challenging times but even under normal conditions, stress is a major contributor to health issues.

Organizations have an opportunity to focus their health efforts on stress management campaigns as a means of helping employees through these tough times. Since stress is a catalyst to many poor health habits, now is an ideal time to focus wellness efforts on managing stress and improving overall mental health. This is an area that has been long neglected in wellness programs, perhaps due to the asymptomatic nature of stress.

I would be interested in hearing your thoughts on USA Today’s piece and what your organization is doing to focus on stress management.