Clarian’s pay-per-cigarette health plan turns to ash

by Kristi Park, February 13th, 2008, 5:05 am

If you’ve been reading Bizmology for a while, you might remember a story about the efforts of Indiana health system Clarian Health Partners to reduce its health care costs by docking workers’ paychecks for unhealthy behaviors. If you don’t, here’s a refresher: In June of last year, the organization announced a wellness program designed to encourage its employees to stop smoking, get fit, and lower their cholesterol.

So far, nothing out of the ordinary in the employer-sponsored health care world. The twist with Clarian’s program was that it used sticks rather than carrots to ensure employee compliance. Where other companies might gently encourage participation, or offer incentives like reduced premiums or extra money in their health savings accounts, Clarian opted for the more, ahem, rigorous approach of fining its employees for being smokers, or struggling with weight, or having high cholesterol.

 At the time, I posed several questions about the feasibility of such an approach:

… it remains to be seen how well it will work or what the legal ramifications will be. How will it affect nurse recruitment during a nurse shortage? Is it fair to the company’s lowest earners, who are hurt disproportionately by the fees? And will people unwilling to let the government control their personal choices allow their employer to do so?

Turns out the answer to that last question is a resounding NO. According to a story in the Chicago Tribune, Clarian was forced to scrap the program before it even started because of widespread resentment among its 13,000 workers. It has replaced it with a rewards-based system that offers monetary awards to employees who meet certain health standards.

In explaining the failure of the program, Clarian’s human resources exec Sheriee Ladd placed the blame squarely on the shoulders of the employees: “Some of them quite frankly didn’t get the essence of what we were trying to do,” the Tribune quotes her as saying. Gee, if only they had understood. Now see, to me, it seems like they understood exactly what was being done and just didn’t like it. But maybe that’s just me.

Not that it’s fair to pick on Ms. Ladd or Clarian too much. Clarian’s not the only company experimenting with such punitive programs (the Tribune article admits that the Tribune Company itself penalizes smokers). And Clarian did, at least, figure out pretty quickly that it had an unworkable plan on its hands.

More than anything, the Clarian episode is yet another indicator of a strained health care system that places too much burden on employers to pay for care. Experimentation like the Clarian program is inevitable in such a situation, where companies want to cover their workers but are struggling with the rising cost of doing so. I’m hoping a better solution comes along; and in the meantime, I’m glad at least one employer figured out that punishing people for their health problems isn’t the right way to go.