Abstract
A recent District Court decision held that the Affordable Care Act (ACA), absent a tax penalty relating to the individual mandate, was unconstitutional. This follows on a Circuit Court decision that the ACA wellness provisions should be nullified. This editorial reviews the similarities and differences between the rulings and asks if a reasonable person would believe that offering financial incentives aimed at supporting a modicum of effort at self-care is rational. One survey of employers and health care consumers indicates 91 percent of those surveyed agree that wellness programs are a perk that helps employees improve health and, interestingly, the same percent agree these programs are sponsored by employers to cut costs. Where some may view the cost containment objectives of employee wellness as dubious, it's a minority view. Still, some minorities should and do carry inordinate sway in public health such as the small percent of those living with chronic conditions who are unwilling to participate in a healthy living program that is associated with their receiving full benefits. Are incentives a worthwhile strategy if they fail to motivate those who would benefit most from health improvement?
In my editorial last month I parsed between the words coercion, incentive, and inducement in an effort to consider why D.C. Circuit Court Judge John Bates nullified the Equal Employment Opportunity Commission’s (EEOC) regulations related to the use of financial incentives in employee wellness programs. 1 Although the EEOC was presumably trying to harmonize their rules with the wellness provisions of the Affordable Care Act (ACA), I argued that focusing on the motivation or burden from financial incentives alone would not yield an adequate definition of voluntariness. In making a case for “organizational contingent” incentives, I suggested an organization’s culture and an individual’s appreciation for the alternatives available for them to earn a reward, or avoid a penalty, were the variables that distinguished an incentive from an inducement. But then, as if employers weren’t already bothered enough about whether and how to act on the Bates ruling, along came the ruling by US District Court Judge Reed O’Connor that held that the ACA, absent a tax penalty relating to the individual mandate, was unconstitutional. 2 Although I resonated with O’Connor’s premise that the individual mandate was an essential component of the ACA, I was failing to understand why removing the tax penalty invalidated the law altogether.
Initially, I attributed my confusion about O’Connor’s decision as simply related to our credentials. I’m a health educator; he’s a lawyer. He must be drawing on some jurisprudence that I wouldn’t presume to have heard about. I was exonerated, however, when within hours of the ruling many legal experts with more confidence, not to mention more relevant credentials than I, were also scratching their heads. In a blunt reaction to O’Connor’s view that a penalty-free mandate amounts to governmental coerciveness, Nicholas Bagley, a University of Michigan Law School Professor, wrote: “To put it bluntly, that makes zero sense. The judge asserted—without any support—that the penalty-free mandate “requires [the plaintiffs] to purchase and maintain certain health-insurance coverage.” But that’s not right. An unenforceable instruction to purchase insurance is not coercive in the slightest.” 3 Again, I’m no lawyer, but as someone with public health sensibilities, I view many laws as warranted merely due to their role in advancing the greatest good for the greatest number.
Some people view social programs of any kind as unwarranted but especially so those that wield a bigger stick than others. If someday I elect to decline my social security benefits, I don’t expect the government will penalize me or my fellow citizens to be critical. But seat belt laws, helmet laws, tobacco, and alcohol age limit laws are all examples where the intent of the law is defensible and constitutional, independent of the penalties associated with breaking those laws. I’m also no actuarial scientist, thank goodness, but insurance works due to the law of large numbers and putting the individual mandate aside should evoke plenty of debate about what other inducements are needed to keep the ACA workable. If not via taxes or financial penalties, what other social reforms will be needed to keep insurance affordable for all? Most public health advocates I know believe a single payer solution is the blindingly obvious solution, albeit one that will likely defy consensus in our lifetimes due to other popular opinions about limiting governmental influence, or, some would say, coercion. Which brings me to the connections between O’Connor’s decision, the Bates decision, and the ongoing debates we will and should be having about the role of incentives in health promotion and achieving unalloyed voluntariness relating to all that we offer and support.
What Do Reasonable People Believe About Taxes?
Most accept taxes as the inevitable means we have collectively embraced to fund public goods and services. Although some lament taxes as nothing more than sanctioned robbery, most acknowledge the interdependencies between government and the citizenry in maintaining a safe and functional society. Some go further and consider taxation as a means to a fair and compassionate world. Debates about access to health and health care are fueled by just such competing views about the role of government. Nevertheless, it’s hard to refute the powerful affect taxes can have on individual choices about where to live, where to shop, and what people buy or give up buying. Read Tom Farley’s “Saving Gotham” for an inspiring case of how prudent community organizing, shrewd tax policy, and bold governmental leadership has saved millions of lives.
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Still, taxation and individual liberty will always be entangled. One of the first conferences I organized decades ago was entitled “Private Lives/Public Policies” and the keynote speaker was Howard Leichter, the author of the book “Free to be Foolish.”
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Leichter’s book develops the argument that, to curb problems, the United States has been more apt to use regulation in contrast to Great Britain’s preference for voluntary agreement. He also shows that regulation is more effective in producing sustainable societal change. Though I oppose all manner of discrimination, it remains that wellness programs, and public health practices more generally, are far from indiscriminate.
As much as Bagley and I are aligned in our views opposing discrimination, it remains that wellness programs, and public health practices more generally, are far from indiscriminate. Targeting select populations who would benefit the most from interventions is standard work in both prevention and intervention program designs. Tobacco prevention and smoking cessation-related policies, taxes, incentives and, most importantly, educational offerings are, of course, aimed at smokers or those at highest risk of becoming smokers.
Bagley, along with Adrianna McIntyre and colleagues, also shares my recent observations that the EEOC seems to have strayed considerably from their historic aversion to the use of financial penalties.
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Writing about what they called the “dubious legal foundations of employee wellness programs,” McIntyre and colleagues argue that “no reasonable person would view a health assessment as ‘voluntary’ when backed by a draconian penalty.” Indeed, until this latest rule, the EEOC viewed any penalty as problematic. In enforcement guidelines, the agency explained that an assessment was voluntary only “as long as an employer neither requires participation nor penalizes employees who do not participate.” The agency is free, in rulemaking, to adjust its understanding of what qualifies as voluntary. But it is not free to close its eyes to the coercive effect of exorbitant financial penalties.” Might a reasonable person believe that offering financial incentives aimed at supporting a modicum of effort at self-care is rational if not admirable?
Given the costs of high-risk behavior, might a reasonable person believe that offering financial incentives aimed at supporting a modicum of effort at self-care is rational if not admirable? One survey of employers and health-care consumers indicates 91% of those surveyed agree that wellness programs are a perk that helps employees improve health and, interestingly, the same percent agree these programs are sponsored by employers to cut costs. 9 Where some may view the cost containment objectives of employee wellness as dubious, it’s a minority view according to these results. Still, some minorities should and do carry inordinate sway in public health. This same survey showed that 13% of those living with chronic conditions are unwilling to participate in a healthy living program that is associated with their receiving full benefits. Are incentives a worthwhile strategy if they fail to motivate those who would benefit most from health improvement?
Go Ask an Economist
Besides my not being a lawyer or an actuary, I’m no economist either. I can summarize my views on most of my questions above about what’s reasonable in 3 words: I don’t know. Gladly, there are people who make a living clarifying such insufferably values laden conundrums. For this I turned to University of Minnesota economist Dr Steven Huchendorf who has garnered all manner of outstanding teaching awards from the Carlson School of Management. By way of disclosure, Steve and I are friends who go back 40 years to when we were cocaptains of our college men’s gymnastics team. Compared to Steve, no one in the nation could execute more precise pirouettes on the parallel bars then and no one is using more exacting learning methods for teaching supply chain reengineering than Huchendorf does today. Similar to readers of this journal who think ceaselessly about those environmental and behavioral factors that enable health improvement, Huchendorf is tireless in his pursuit of the perfect learning environment. For Huchendorf, incentives are a basic economic principle that matter in what he cares about most: student success.
An excerpt from Huchendorf’s course syllabus and his use of bold, underlined emphasis aptly captures his all-consuming approach: “Learning tools of the course include activities before the class session, during the class session and after the class session.” And where some professors may view extracurricular activity as a nicety, Huchendorf bakes continuous learning into his course via the use of a points system: “The Undergraduate Supply Chain & Operations Student Organization sponsors events, tours and speakers throughout the year. A typical extra credit opportunity would include attendance at a speaker event—then prepare a page and a half, single-spaced, typewritten paper.” I described the ongoing debates about the use of incentives in health promotion to Huchendorf and then interviewed him about why he uses incentives in his classroom. I’ve often observed how we can garner insights by crossing disciplinary boundaries and Huchendorf’s matter of fact perspective on the learning impact of his point system made me mindful that the effective use of incentives must be grounded in practical empiricism and also steeped in positive intent.
Q: You’ve Adopted a Point System to Induce Students to Complete Learning Activities That in the Past Were Simply Expected as a Part of Course Participation. Why?
Points, and Ultimately Grades, Are Considered Extrinsic Motivators. Do You Think These Short-Term Inducements Lead to Longer term Changes in the Student’s Values, Beliefs, or Behaviors?
My goal is to improve the student learning process. Part of what is taught in my classroom is “Learning to Learn.” Learning Tools are incorporated such as: “Learning Styles Assessments” because not everyone learns the same way; “Learning Cycle Roadmap” that presents information for the Reflector (Why), Theorist (What), Pragmatist (How), Activist (What if); “Readiness Assurance Process” that gets students ready to learn before each class to raise the level of learning during the class; and many more such tools. All of these tools are utilized in my classes to improve student learning. Students are taught to improve their process of learning. My hope is they utilize these tools to improve their learning in not only my course but other courses during their formal education. In addition, my hope is they utilize these tools in their training postgraduate though I don’t have empirical evidence to prove these tools follow them long term.
Is There a Downside to Inducements Like Points? For Example, Do You Have Concerns That You’re Manipulating for Success Rather Than Letting Students Learn From Failure?
Timeframes in courses are too short to allow for students’ learning from failure. By the time they fail, large portions of the course are over and it’s too late to catch up and learn. Learning by retaking a course is a solution that is costly and should be avoided if possible. Think of the points and learning tools as mistake proofing methods aimed at making it easier for the student to do the “right thing” and learn. As a faculty, when I associate points with learning tools it is an attempt to provide a process for students to be successful.
When I Serve as a Health Coach and Ask About Barriers to Change, Time Limitations Are the Number One Concern. Does Your Use of Incentives Relate to Time Management for Students?
Student time allocation decisions span not just points in classes and grades but a variety of activities. Students have to balance study hours for learning, work hours for income, hours devoted to family, friends, hours for partying (which will likely resonate with many students) and, of course, the single highest valued opportunity cost of all—hours of sleep. I would not assume students attempt to maximize their point totals in classes. Rather they attempt to put in the required hours and effort level to achieve the point total and hence the grade they target for a specific course. In some cases, students may not be expending all out efforts toward going for the “A” but may decide to put in just enough hours to get a “B” (and no more hours). I speculate that a key set of skills students build as an undergraduate are time management skills. How to choose between all of the competing uses of their time. I rely on no less of an authority than Gandalf the Wizard in thinking about the importance of time allocation decisions. Frodo: “I wish the ring had never come to me. I wish none of this had happened” Gandalf: “So do all who live to see such times, but that is not for them to decide. All we have to decide is what to do with the time that is given us.” J.R.R. Tolkien
Conclusion
Reflecting on Huchendorf’s passion for excellence in teaching and learning leaves me with a few salient reminders about the best use of incentives. He uses points because he’s found that students learn more when they do more. And Huchendorf has found that doing more and learning more are profoundly interrelated. Forty years ago I marveled at the number of gymnastics training repetitions Steve would subject himself to in order to assure his complex series of P-bar pirouettes would earn him the highest point scores in competition. Huchendorf’s disciplined take on achievement is something he distinctively models by being exactingly clear with his students about what they can do to earn points. That’s because, ever since he was their age, he understood that achieving success and putting in exceptional effort are one and the same.