Insurers Use Rewards To Make Customers Safer, Cheaper

http://news.investors.com/Article/599170/201201271358/unitedhealth-progressive-reward-safer-healthier-customers.htm

Just as credit card companies offer rewards points to encourage more shopping, insurers offer incentives to foster safer habits — for your benefit and theirs.

Call it positive reinforcement via positive reimbursement. UnitedHealth Group (UNH), Progressive (PGR) and Allstate (ALL) are among the companies offering incentives in exchange for certain types of actions and behavior.

"You're getting at the heart of insurance business models, which is risk prediction," said Richard Hutchinson, Progressive's general manager for usage-based insurance.

The idea is that safer or healthier people cost less money, and insurers are choosing to reward good behavior rather than punish bad behavior.

Under UnitedHealth's Personal Rewards program, people with chronic conditions can get discounts on premiums or cash for fulfilling tasks on a personalized health road map.

By getting certain tests and screenings, meeting regularly with doctors, and agreeing to "wellness" coaching, policy holders rack up points that can translate to savings of up $1,200 a year.

For now, the program focuses on taking certain actions vs. producing actual results, such as losing pounds or lowering blood pressure. That's supposed to set people up for success rather than set them up for discouragement.

"You could easily succeed," said Yasmine Winkler, senior VP of product and innovation at UnitedHealthcare. "We're making it as easy as possible."

Cost Trade-Offs

The policy holder's employer pays for the incentives, betting that employees who execute a healthy game plan will have lower health care costs.

Personal Rewards is available to Hertz Global Holdings (HTZ) and Jones Lang LaSalle (JLL) workers as well as UnitedHealth employees.

More than three-quarters of UnitedHealth's participants have earned points, and more than half have received some type of reward. They have also seen an average weight loss of 4.5%.

One worker even discovered he had three blocked arteries and had bypass surgery days later. He credited his Personal Rewards road map, which called for certain screenings, with saving his life.

For most participants, the program saves money, provides something to talk about at the water cooler, and pits spouses against each other in weight-loss contests.

"It's interesting to see what people are motivated by," Winkler said. "It's about coming up with the winning combination."

UnitedHealth is thinking about expanding the types of rewards people can get like gift cards or prizes.

The insurer is also developing mobile apps to incorporate in the program and is working with makers of video game consoles to create health-related games.