Incentives for the health conscious

Taking care of your body should have its own rewards. But a South African health insurance company is adding some new lures, such as discounts on travel, movie tickets and electronics, says the Wall Street Journal.

Just as frequent fliers accumulate miles, South Africans covered by Discovery Health can collect points for doing such healthy things as quitting smoking, exercising or getting an annual Pap smear. The incentives programme, called Vitality, is combined with high-deductible plans in which people have to foot the bill for much of their basic care themselves.

South Africa is one of the few countries whose health insurance system resembles America's and many see Discovery's points system as a model for the United States.

Consider Discovery's success:
 

• Today, about 1.9 million people are covered by Discovery and 70 per cent of eligible members join Vitality points programme.
   
• People, ages 50 to 54, who actively chase wellness points, saw their health spending decrease, even as they aged.
   
• Vitality enrolees generally cost less than non-enrolees and the plans have led to 20 per cent to 40 per cent reductions in what the company terms "discretionary" spending on dieticians, dermatologists and physical therapists.
   
• Claims, relative to premiums, decreased among elite members (members with the most points) and increased among non-elite members, though no definite correlation can be made.
  
  Critics complain Discovery's rewards plan attracts healthy customers, leaving other companies to cover the older and sicker people. Discovery says it has an evenly distributed customer base and does not believe its success is the result of cherry-picking healthy people.
  
  Most of Discovery's rivals in South Africa have tried to copy its programme and similar reward programmes are beginning to pop up in the United States.
  
  Source: Ron Lieber, In South Africa, Insurer Gives Points for Healthy Living, Wall Street Journal, February 21, 2006.
  
  For text: http://online.wsj.com/article/SB114048591562678630.html
  
  For more on Health: http://www.ncpa.org/iss/hea/
  
  FMF Policy Bulletin/ 28 February 2006