How to lower healthcare costs with incentivized wellbeing initiatives

The escalating cost of healthcare is a growing concern for many employers, with many struggling to manage ballooning expenses. According to a recent national survey from Mercer, employer-sponsored health plan costs increased by 4.5% in 2024 and are expected to increase by 5.8% in 2025. This financial strain not only impacts bottom lines but also affects employee satisfaction and productivity. 

Employees' health and wellbeing are deeply intertwined with their performance and the overall success of an organization. When employees are unhealthy and dissatisfied, it manifests in heightened stress levels, increased absenteeism, and diminished productivity. This not only escalates healthcare costs due to rising medical claims and chronic health conditions but also disrupts workplace harmony and reduces morale. In contrast, when employees' physical and emotional needs are met, they experience enhanced fulfillment, resilience, and vitality.

Introducing incentivized wellbeing programs can be a transformative solution for both employees and organizations. By encouraging healthy behaviors and rewarding participation in wellbeing initiatives, companies can foster a culture of health and vitality. These programs not only help reduce healthcare costs by promoting preventative care and healthy habits but also enhance employee engagement and morale. When employees are supported in their physical and mental health journeys, they are more likely to be productive, motivated, and committed to their work.  

Implementing an effective wellbeing incentive program, however, requires careful planning and targeted strategies. In this article we will explore practical approaches employers can take to implement these programs successfully, focusing on diverse and engaging wellbeing options, personalizing incentives according to individual health goals, and fostering an organizational culture that prioritizes wellbeing. 

The psychology of extrinsic motivation

Extrinsic motivation refers to behavior driven by external rewards such as recognition, rewards, or other tangible benefits. Unlike intrinsic motivation, which stems from internal satisfaction or personal interest, extrinsic motivation is primarily influenced by the desire to obtain external rewards or avoid negative consequences. In the context of personal and professional wellbeing, extrinsic motivation can play a significant role in shaping attitudes and behaviors.  

The strategic use of extrinsic incentives can substantially impact overall wellbeing by encouraging behaviors that lead to positive health outcomes, improved job satisfaction, and comprehensive personal growth. Financial rewards or other incentives can motivate individuals to adopt healthier lifestyles, such as regular exercise, balanced diets, or adherence to medication regimes, which in turn enhance physical and mental health.

The importance of meaningful wellbeing incentives

Wellbeing incentives play a crucial role in fostering a healthy and motivated workforce. They harness the principles of behavioral psychology to encourage positive habits and sustained engagement. Employees who feel rewarded for their efforts are more likely to participate in programs designed to enhance their wellbeing. This sense of recognition can lead to improved morale, increased productivity, and a greater overall commitment to personal health and professional development.

By offering meaningful rewards, you not only demonstrate that employee health is a priority, but you also create a culture of support and motivation. These incentives can take various forms, but they all share the common goal of making it easier and more appealing for employees to take active steps toward better health.

Below are some effective examples of rewards for participation and completion of wellbeing activities: 

• Financial rewards: Offer cash bonuses or gift cards for completing health screenings, achieving fitness goals, or participating in wellbeing challenges. These tangible acknowledgments not only boost motivation but also demonstrate your commitment to their wellbeing.

• Fitness subscription subsidies: Provide subsidies or discounts on memberships for gyms or fitness classes to promote physical activity.  

• Home fitness stipend: Offer reimbursements or allowances for purchasing home fitness equipment like treadmills, stationary bikes, or weights.  

• Flexible work hours: Allow flexibility in work hours for health appointments or exercise, showing you value employees' health.  

• Health insurance premium discounts: Offer discounts on health insurance premiums for employees who actively engage in wellness programs or meet certain health milestones.  

By thoughtfully integrating various forms of rewards—from financial perks to health-related subsidies—organizations can significantly influence employees' willingness to participate in wellbeing programs. This, in turn, leads to tangible benefits such as reduced healthcare costs, lower absenteeism, and heightened productivity. Most importantly, these incentives help to cultivate a workplace culture where employee health and wellbeing are not just encouraged but prioritized.  

Steps for implementing an incentivized wellbeing program

Implementing an effective wellbeing incentive program requires careful planning and targeted strategies. Here, we explore practical approaches employers can take to implement these programs successfully:

Personalized program recommendations

Personalization is the cornerstone of effective wellbeing programs. Tailoring incentives to meet the personal health goals and preferences of employees can significantly enhance participation and success rates.

Behavioral insights and recommendations

Utilize behavioral insights to provide personalized recommendations, guiding employees on their wellbeing journey. Navigate's Total Health solution is designed to enhance both individual and organizational health by addressing physical, mental, and emotional wellbeing. By utilizing personalized survey data, we tailor wellbeing programs to meet the unique needs of each employee, fostering a more engaged, productive, and thriving workforce.

Health assessments and biometric screenings

Comprehensive health assessments and biometric screenings help to understand employees' current health status and potential risk factors. Through Navigate’s Total Health solution, these assessments form the foundation for crafting an incentivized wellbeing plan that supports overall health and addresses specific needs.

Health coaching

Health coaching serves as a powerful tool for transformation, especially for employees managing high-risk factors such as diabetes, high cholesterol, and hypertension. This one-on-one support is vital in helping individuals confront their unique health challenges with confidence and clarity. Navigate’s certified health coaches provide invaluable guidance, motivation, and practical advice, empowering employees to make informed decisions and stay aligned with their health goals.  

Custom health goals

Setting tailored health goals based on an individual’s readiness to change is crucial, whether it’s improving fitness, managing financial stress, or improving mental health. Navigate leverages data insights to create program recommendations that align with employees' readiness level, making the rewards system impactful and encouraging sustained engagement.  

Navigate’s platform utilizes the power of personalization to capture these critical elements ensuring that every employee receives the support they need. Through Total Health, we empower employers to understand individual behavior patterns allowing for the delivery of targeted program recommendations that are empathetic and supportive.  

Building a supportive community

Creating a thriving workplace culture begins with fostering a supportive community where every individual feels a sense of belonging and encouragement.

• Encourage collaboration: Facilitate meaningful connections among employees through group challenges and team-based activities, fostering a network of motivation and accountability.

• Leadership engagement: Empower leaders to actively engage in wellbeing initiatives, modeling healthy behaviors and endorsing the importance of wellbeing.

• Wellbeing champions: Identify and empower wellbeing champions to lead initiatives and inspire their colleagues. These ambassadors drive greater participation and enthusiasm for wellbeing programs.

Measure and celebrate progress

At Navigate, we understand the profound impact of recognizing and celebrating progress on the journey to wellbeing. Celebrating achievements not only reinforces positive behaviors but also fosters a culture of appreciation and collective success. By measuring progress and celebrating milestones, we can ensure continued engagement and sustained motivation across your organization.

Track meaningful metrics

To truly understand the impact of your wellness program, it's essential to track metrics that reflect both individual and organizational progress. Navigate’s sophisticated analytics tools provide comprehensive insights into various aspects of wellbeing, from physical health improvements to mental wellness and engagement levels. These metrics help you gauge the effectiveness of your initiatives and make informed decisions about future strategies.

Personal milestones

Every step forward in the wellness journey is worthy of recognition. Navigate empowers employees to track their personal health and wellness milestones, offering congratulatory messages and rewards for achievements such as hitting fitness goals, managing stress better, or improving dietary habits. This recognition reinforces a sense of accomplishment and encourages continued commitment to personal wellbeing.

Recognition and rewards

Navigate offers a variety of recognition and reward options that cater to diverse interests and preferences. Whether through public acknowledgment, personalized rewards, or incentives that promote further wellness activities, recognizing progress in a meaningful way is integral to maintaining momentum and enthusiasm.

Continuous improvement

At Navigate, we believe that continuous improvement is the cornerstone of a thriving wellbeing strategy. Our dedicated account management team partners closely with our partners to ensure that wellness programs are not only effective but also continuously evolving. By regularly assessing the outcomes of your wellness initiatives and incorporating feedback from participants, we help you identify both successes and areas for growth. 

Case study: how wellbeing incentives reduced healthcare costs for a critical access hospital

Healthcare providers are often so focused on the wellbeing of their patients that they can sometimes overlook their own health needs. This oversight can result in significant healthcare costs for the providers themselves. Such was the case for a small critical access hospital facing a daunting challenge: healthcare claims were projected to rise by 140% in the upcoming year. The hospital had been providing biometric screenings but lacked additional resources to help reduce health risks among its participants. Facing increasing deductibles and out-of-pocket maximums, the hospital sought assistance to make a strategic change and partnered with Navigate.

Working closely with the client, we assessed their needs and introduced an incentivized wellbeing program to address these issues by providing tailored support across several health categories. The program included biometric screening results coaching, chronic condition management, nutrition, stress management, weight management, sleep improvement, and physical activity.

This incentivized program combined biometric screenings with post-screening consultations and clinical intervention coaching. It aimed to inspire medical professionals to make lasting health improvements.  

This case study exemplifies the transformative power of a comprehensive and incentivized wellbeing program. By strategically addressing the health needs of its employees, the critical access hospital not only reduced its healthcare costs significantly but also fostered a healthier, more engaged workforce.  

Final thoughts on the power of incentivized wellbeing 

Incentivized wellbeing programs offer a powerful solution—one that not only promotes healthier lifestyles but also drives significant cost savings. By encouraging and rewarding positive health behaviors through personalized incentives, these programs effectively engage employees in their own wellbeing journeys. This proactive engagement leads to healthier choices, reducing the incidence of lifestyle-related diseases and the need for costly medical interventions. 

When employees are motivated to participate in wellbeing initiatives, it fosters early detection and prevention of health issues, which translates to fewer medical claims and lower healthcare expenses. This ripple effect is transformative, decreasing absenteeism and enhancing productivity, while supporting a culture of resilience and vitality. At Navigate, we believe that incentivized wellbeing is a strategic investment in your workforce. An investment that pays dividends through reduced healthcare costs and a healthier, more thriving organization. 

Ready to lower your organization’s healthcare costs? Book a demo today to see how Navigate can help.