Penn State University has spiked a controversial plan to charge employees $100 a month if they refused to submit to a battery of health care screenings.
The "noncompliance" fee, set to go into effect Jan. 1, was part of the university's new "Take Care of Your Health" initiative. Employees and spouses covered by the university's health care plan were to complete an online wellness profile, schedule a physical exam and have a biometric screening, which measures lipids, blood glucose, body mass index and other physical attributes.
Those who didn't take those steps by the end of the year would have seen their health care premiums go up by $100 a month, or $1,200 a year. The university system has about 17,500 employees, and 40,000 health plan beneficiaries.
To date, about 10,000 of those employees have already participated in the screenings and surveys. The screenings will still be offered, but they will no longer be mandatory.
"We have decided to suspend the $100-per-month surcharge so that people who are uncomfortable with any aspect of the survey will not feel as if they are being penalized," school president Rodney Erickson said via the university's news service.
"There is still a tremendous financial challenge that we must address in the coming year and beyond, but we also need to acknowledge the concerns of employees and seek their advice on how to overcome these fiscal roadblocks."
The planned premium fee met with some resistance from faculty, who said they were caught off-guard by its implementation and thought the premiums were punitive.
Penn State, meanwhile, said the goal of the screenings was not to punish those who did not take them, but to improve the health -- and look for red flags -- among those who took them. The hope is that forcing employees to get a check-up and look at their own health data might result in lower health care costs. Penn State has budgeted $217 million in 2013-14 health expenses.
The use of such screenings and bifurcated premiums is becoming commonplace among employers, and even Penn State's health plan administrator, Pittsburgh-based Highmark Inc., assesses an extra $100-a-month premium for those who don't take the screenings.
The extra fees -- or, sometimes, premium rebates or gift cards for those who participate in health and wellness screenings -- figure to become even more commonplace next year, when, by way of the 2010 Affordable Care Act, most employers will be allowed to steer up to 30 percent of the total amount of employees' health insurance premiums toward wellness "incentives."
In other words, for a family with a $12,000 health plan, $3,600 of that total could be subject to outcomes-based discounts or fees.
A 2010 Harvard University study suggests, "Medical costs fall about $3.27 for every dollar spent on wellness programs, and absentee day costs fall by about $2.73 for every dollar spent." Highmark's own research suggests that for every $1 spent on wellness programs, $1.65 in health care costs are saved down the line.
But others question the utility of employer screenings. An essay that appeared on the website of Health Affairs, a peer-reviewed health policy journal, suggested, "Biometric screenings [cost] far more money than they can conceivably save, due to both the likelihood of overdiagnosis and the marginal benefit of taking frequent measurements in generally healthy adults."
Wellness screenings are "almost exclusively moneymaking tools for the wellness industry and the managed care industry. They are not health-producing tools," said Vik Khanna, a health consultant who was one of the essay's co-authors.
He pointed to a recent report from the Raleigh-Durham Airport Authority, which attributed a flattening of its health care costs partly to its wellness program -- but the $90,000 drop in health expenses over two years was more than offset by the $140,000 spent on the wellness program annually.
"Wellness doesn't affect spending that quickly," Mr. Khanna said. Such screenings are meant to detect potential heart attacks that may be five or 10 years off, or developing blood pressure or diabetes complications. The true value -- or lack thereof -- of wellness programs may not be known for years, he said.
As for the many studies suggesting that wellness screenings and related programs indeed bend the health care cost curve, some are just bad studies, he said, while others are using data from the last four years -- a time during which all health spending has been depressed by the lagging effects of the recession and an ongoing cost-shift toward employees.
Penn State said it still intends to pursue other modifications to its employee health plan.
"We cannot delay the inevitable. If we don't get on top of this challenge now, each and every year we will compound our problem," said David Gray, senior vice president for finance and business, in a university statement.
"It is unfortunate, but we are facing double-digit increases that amount to millions of dollars and we must address it now."
Bill Toland: firstname.lastname@example.org or 412-263-2625.