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The right incentive can get the right results. With health care costs continuing to soar, insurers and employers alike are upping the ante to get their members and employees on the road to better health.

According to the 2011/2012 Staying@Work survey by Towers Watson, the use of financial rewards in health management programs increased by 50 percent between 2009 and 2011. Such rewards are given to employees who engage in healthy behaviors. This year, four in five companies plan to offer some type of financial reward to individuals who participate in their health management programs.

In addition, the use of penalties more than doubled from 2009 to 2011, with the percentage of companies using such tactics rising from 8 percent to 19 percent. Such penalties are dished out to employees who engage in unhealthy behaviors such as smoking. The use of penalties is expected to roughly double again in 2012, with more than one-third of survey respondents planning to have penalties in place, according to the survey.

Health insurers are trying to make it fun to be heallthyWhile just 12 percent of survey respondents said they currently reward (or penalize) based on specific health outcomes (such as target BMI or cholesterol levels), an additional 16 percent are planning this achievement-based approach for 2012.

Would you like a prize with that treadmill?

Employers and insurance companies are getting creative when it comes to finding ways to incentivize people to get and stay healthy.

For example, every Tuesday and Thursday, the office of Sun Broadcast Group, a national radio syndication and sales company in Boca Raton, Fla., closes from 1-2 p.m. so the 12 members of the staff can workout in the building’s gym, a few floors above their offices. CEO Jason Bailey hires a private trainer to work with the employees. .

Sun employees receive points for healthy moves like losing weight and quitting smoking. Those points can be cashed in for vacation days and other perks. Since starting the program in the past year, there’s been a noticeable drop in sick days and an uptick in productivity.

Farmers & Merchants Bank (F&M) kicked off 2012 by passing out pedometers to every employee and organizing walking groups to get people moving. It also hosted two health fairs to help people understand where they’re starting and to set goals for the year. F&M has a number of initiatives to keep people motivated, such as:

  • A recipe contest that requires teams to submit healthy meals under 2,000 calories.
  • A summer scavenger hunt that includes activities like yoga, eating a vegetarian dish and visiting a museum.
  • Educational seminars about fitness and healthy eating.
  • Fitness competitions.

To make it interesting, F&M’s prizes include things like an iPad, culinary sets, healthy lunches for winning teams and gift cards to healthy grocery stores.

The MemorialCare Health System, a nonprofit network of several hospitals in California, sponsors the Good Life program, which features nutritious on-site food options, walking challenges, exercise classes, walking trails, gyms, weight reduction programs, smoke-free campuses and more. Other innovations include “walking meetings” and installing Wii sports stations to encourage activity during breaks.

Employees receive a $150 incentive for participating in two Good Life activities and completing or updating responses to the confidential online health risk assessment and biometric screening. In the last year, employees walked 350,000 miles in walking challenges and lost a combined total of 4,000 pounds, says Tammie Brailsford, a nurse who is also MemorialCare Health System executive vice president and COO.

Some companies are sponsoring their own versions of “Biggest Loser” by holding weight-loss competitions with prizes such as $500 in cash.

Insurance companies get into gaming

Health insurer Cigna’s DailyFeats program helps people reach their goals through small steps. It’s free on and can be accessed via an iPhone. Members earn points for “feats” like eating fruits and vegetables that work toward a goal, like losing weight. Points are redeemed for rewards such as savings on national brands or donations to nonprofits.

In insurer Humana’s HumanaVitality program, medical plan members start by undergoing a health assessment so they get a sense of where they need to make lifestyle changes. They receive a “Vitality Age,” which helps them see how lifestyle impacts health.

From there, a personalized program is created, with goals and activities to help members achieve optimal health. Members set goals, such as exercising daily or doing annual preventive screenings. When those goals are completed, participants earn Vitality bucks that can be cashed in for rewards like movie tickets, music downloads, hotel packages, food processors and more.