[Senate Hearing 115-637]
[From the U.S. Government Publishing Office]


                                                    S. Hrg. 115-637

                     EXAMINING HOW HEALTHY CHOICES
                      CAN IMPROVE HEALTH OUTCOMES
                            AND REDUCE COSTS

=======================================================================

                                HEARING

                                OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                                   ON

               EXAMINING HOW HEALTHY CHOICES CAN IMPROVE HEALTH 
                       OUTCOMES AND REDUCE COSTS

                               __________

                            OCTOBER 19, 2017

                               __________

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                                Pensions
                                
                                
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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                  LAMAR ALEXANDER, Tennessee, Chairman
                  
                  
                  
 MICHAEL B. ENZI, Wyoming		PATTY MURRAY, Washington
RICHARD BURR, North Carolina		BARBARA A. MIKULSKI, Maryland
JOHNNY ISAKSON, Georgia			BERNARD SANDERS (I), Vermont
RAND PAUL, Kentucky			ROBERT P. CASEY, JR., Pennsylvania
SUSAN COLLINS, Maine			AL FRANKEN, Minnesota
LISA MURKOWSKI, Alaska			MICHAEL F. BENNET, Colorado
SUSAN M. COLLINS, Maine			SHELDON WHITEHOUSE, Rhode Island
BILL CASSIDY, M.D., Louisiana		TAMMY BALDWIN, Wisconsin
TODD YOUNG, Indiana			CHRISTOPHER S. MURPHY, Connecticut
ORRIN G. HATCH, Utah			ELIZABETH WARREN, Massachusetts
PAT ROBERTS, Kansas			TIM KAINE, Virginia
LISA MURKOWSKI, Alaska			MAGGIE HASSAN, New Hampshire
TIM SCOTT, South Carolina                 
                  
                  
               David P. Cleary, Republican Staff Director
         Lindsey Ward Seidman, Republican Deputy Staff Director
                 Evan Schatz, Democratic Staff Director
             John Righter, Democratic Deputy Staff Director
                           
                           
                           C O N T E N T S

                              ----------                              

                               STATEMENTS

                       THURSDAY, OCTOBER 19, 2017

                                                                   Page

                           Committee Members

Alexander, Hon. Lamar, Chairman, Committee on Health, Education, 
  Labor, and Pensions, Opening Statement.........................     1
Murray, Hon. Patty, Ranking Member, a U.S. Senator from the State 
  of Washington, Opening Statement...............................     3
Young, Hon. Todd, a U.S. Senator from the State of Indiana.......    32
Isakson, Hon. Johnny, a U.S. Senator from the State of Georgia...    36
Franken, Hon. Al, a U.S. Senator from the State of Minnesota.....    38
Casey, Hon. Robert P., Jr., a U.S. Senator from the State of 
  Pennsylvania...................................................    40
Cassidy, Hon. Bill, a U.S. Senator from the State of Louisiana...    42
Bennet, Hon. Michael F. a U.S. Senator from the State of Colorado
Warren, Hon. Elizabeth, a U.S. Senator from the State of 
  Massachusetts..................................................    44

                               Witnesses

Statement of Steve Burd, Founder and CEO, Burd Health, Alamo, CA.     5
    Prepared statement...........................................     7
Statement of Michael F. Roizen, M.D., Chief Wellness Officer, 
  Roizen Family Chair, The Wellness Institute of the Cleveland 
  Clinic, Cleveland, OH..........................................     9
    Prepared statement...........................................    12
Statement of David A. Asch, M.D., M.B.A., John Morgan Professor, 
  Perelman School of Medicine and the Wharton School, Executive 
  Director, Center for Health Care Innovation, University of 
  Pennsylvania, Philadelphia, PA.................................    22
    Prepared statement...........................................    24
Statement of Jennifer Mathis, Director of Policy and Legal 
  Advocacy, Judge David L. Bazelon Center for Mental Health Law, 
  Washington, DC.................................................    26
    Prepared statement...........................................    27

 
                     EXAMINING HOW HEALTHY CHOICES
                      CAN IMPROVE HEALTH OUTCOMES
                            AND REDUCE COSTS

                              ----------                              


                       THURSDAY, OCTOBER 19, 2017

                                       U.S. Senate,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:07 a.m. in 
room SD-430, Dirksen Senate Office Building, Hon. Lamar 
Alexander, Chairman of the Committee, presiding.
    Present: Senators Alexander [presiding], Murray, Isakson, 
Young, Cassidy, Casey, Franken, Bennet, Whitehouse, Murphy, 
Warren, Kaine, and Hassan.

                 Opening Statement of Senator Alexander

    The Chairman. The Senate Committee on Health, Education, 
Labor, and Pensions will please come to order.
    We have a vote at 11:45, but that should leave us an 
opportunity to hear from our witnesses and to have a good 
amount of time for questions.
    I told our witnesses that I was delighted to be talking 
about something other than the individual health insurance 
market.
    [Laughter.]
    I am really quite serious about that because we know that 
the larger issues in healthcare are much more than the 6 
percent of the people, every one of whom is important, who have 
to buy their insurance in the individual health insurance 
market.
    We are glad to have this discussion, and it is a subject on 
which both Republicans and Democrats have a lot of interest, 
and we look forward to your advice.
    Today, we are holding a hearing to look at what can be done 
to encourage people to make healthier lifestyle choices to help 
prevent serious illnesses and reduce healthcare costs.
    Senator Murray and I will each have an opening statement, 
and then we will introduce the witnesses. After the witnesses' 
testimony, Senators will each have 5 minutes of questions.
    Let me say, before I begin, that I want to thank Senator 
Murray for her leadership and being a straightforward, tough 
negotiating partner on our efforts to present to the Senate a 
limited, bipartisan bill to stabilize the insurance market 
during 2018 and 2019.
    She and I will go to the Senate floor today at one o'clock 
and make a brief statement, and put the text of the legislation 
in the Congressional Record so Senators can examine it. We will 
also list a significant number of Republican and Democratic co-
sponsors for the legislation.
    The hope is, now that we have put a proposal on the table, 
that the Senate will consider it, that the house will consider 
it, and the President will consider it.
    I talked with the President last night, and he encouraged 
the process, which he asked me to begin, and said he looked 
forward to considering it. I said, ``If you have suggestions 
for improving it, that is certainly your prerogative to do,'' 
and that is what we would expect to happen in the legislative 
process.
    I thank Senator Murray for that, and other Members of the 
Committee, who have been involved in it.
    Over the last 7 years, we have endured this political 
stalemate over the Affordable Care Act, with most of the 
disagreement being over, as I said, a very small part of the 
health insurance market where 6 percent of Americans buy their 
insurance.
    The fact that we have had that stalemate makes this even 
more refreshing to talk about an area of healthcare on which 
most Americans--doctors, employers, Republicans, Democrats--
agree. That consensus is that a healthy lifestyle leads to 
longer and better lives, and reduces the Nation's healthcare 
costs.
    According to the Centers for Medicare and Medicaid 
Services, healthcare spending in the United States has grown 
from consuming 9 percent of the Gross Domestic Product in 1980 
to nearly 18 percent, or $3.2 trillion, in 2015 and a predicted 
20 percent in 2025.
    The Cleveland Clinic, which is represented by one of our 
witnesses today, has said if you achieve at least four of six 
normal measures of good health and two behaviors, you will 
avoid chronic disease about 80 percent of the time.
    The six indicators of good health are familiar: blood 
pressure, cholesterol level, blood sugar, Body Mass Index, 
smoking status, and your ability to fulfill the physical 
requirements of your job.
    The two behaviors are seeing your primary care physician 
regularly and keeping immunizations up to date.
    Again, if you hit four of the six indicators and keep up 
the two behaviors, according to the Cleveland Clinic, you will 
avoid chronic diseases 80 percent of the time.
    This is important because we spend more than 84 percent of 
our healthcare costs, or $2.6 trillion, treating chronic 
diseases. That is something on which almost everyone agrees.
    Let us add that to another obvious fact: about 60 percent 
of Americans get their health insurance on the job. So if we 
really want to focus on improving the quality of healthcare in 
America, why not connect the consensus about wellness to the 
insurance policies that 178 million Americans get from their 
job? That is precisely what the Affordable Care Act sought to 
do in 2010. In fact, it was one of the only parts of the ACA 
that everybody seemed to agree on.
    Today's hearing is about how successful wellness 
initiatives have been, and what we can do to make it easier to 
encourage people to lead healthier lives and reduce healthcare 
costs.
    Many employers have developed wellness programs to 
incentivize people to make healthier choices. These programs 
may reward behaviors such as exercising, eating better, 
quitting smoking, or offer employees a percentage of their 
insurance premiums for doing things like maintaining a healthy 
weight or keeping their cholesterol levels in check.
    These programs have the potential to save employers money, 
and improve the health and well-being of their employees.
    Steve Burd, one of our witnesses, as CEO of Safeway, 
visited with many of us a few years ago, and started a 
successful employee wellness program after he left Safeway, 
which I hope he will talk about. That is one part of it.
    I would also like to hear about what communities and the 
Federal Government are doing to encourage healthy lifestyle 
choices.
    I know that Blue Cross Blue Shield of Tennessee partnered 
with local, state, and private organizations to fund community-
level initiatives across our state, such as Fitness Zones in 
Chattanooga, programs in rural counties to promote healthy 
habits, and an interactive elementary school program to keep 
kids moving.
    An example of encouraging wellness at the Federal level is 
the Medicare Diabetes Prevention Program, an intervention 
program for Medicare recipients diagnosed as pre-diabetic to 
prevent Type 2 diabetes. Medicare spent an estimated $42 
billion more in 2016 on people with diabetes than it would have 
spent if those recipients did not have diabetes.
    There are other ways to encourage healthier behavior, but 
it is hard to think of a better way to make a bigger impact on 
the health of millions of Americans than to connect the 
consensus about wellness to employer-based insurance for 178 
million people.
    I look forward to the hearing.
    Senator Murray.

                  Opening Statement of Senator Murray

    Senator Murray. Well, thank you very much, Chairman 
Alexander.
    Thank you to all of our colleagues and witnesses for 
joining us today.
    We often think of healthcare as something you need when you 
get sick, but we should be thinking a lot more about ways we 
can help prevent families from getting sick in the first place 
and ending up in the doctor's office or the hospital.
    I am really glad that we are having today's hearing on how 
to better promote health and wellness. Because the truth is we 
all have a role to play in supporting families' efforts to make 
healthy choices, whether it is Government, or communities, or 
hospitals, or schools; and certainly, businesses and employers 
who can promote healthy behaviors in partnership with their 
communities.
    I look forward to a robust discussion today around wellness 
and public health efforts that promote physical activity, 
improve access to healthy and affordable food, especially for 
our children, expand on science-based ways to reduce tobacco 
use, and a lot more.
    I will be focused on making sure Congress is providing the 
investments needed to support local, state, and Federal efforts 
to promote public health. That includes grant programs by the 
Centers for Disease Control and Prevention that invest in 
community health centers, as well as the Prevention and Public 
Health Fund, which has made a difference for so many patients 
and families nationwide.
    Given our Nation's high healthcare costs, and the fact that 
so many of those costs can be attributed to chronic diseases, 
it is critical we do more to support public health efforts 
focused on health education and promotion.
    I do want to be clear on the following: while we consider 
wellness programs, we have to do it in a balanced manner and 
make sure that we are protecting workers' civil rights and 
privacy.
    For me, and I know for a lot of my colleagues, the fact 
that employer wellness programs could impose significant 
financial penalties on workers, who do not wish to share 
protected health information, is a very serious concern.
    I want to hear today more about what we need to do to make 
sure we find this right balance for wellness programs that 
protects workers' rights under the Americans with Disabilities 
Act, and HIPAA, and the Genetic Information Non-discrimination 
Act, three laws that were written and passed by this Committee.
    I have to be clear: responsibility for making sure that the 
rights of workers with disabilities, and those who do not wish 
to share genetic information, are protected and respected in 
these programs will rest with the Trump EEOC.
    That is exactly one of the reasons why Democrats pushed so 
hard against his recent nominees to the EEOC, nominees who, I 
really am concerned, do not show they were truly committed to 
protecting those workers from discrimination.
    This is a balance, and we need to work on it, and figure it 
out.
    I really appreciate all of our witnesses who are here to 
help share your information with us, and I look forward to the 
discussion.
    Mr. Chairman, I do have a letter from AARP that I want to 
submit for the record as well.
    The Chairman. Thank you. It will be submitted.
    Thanks, Senator Murray.
    We would ask each witness to please summarize your remarks 
in about 5 minutes. That will give us more time to have 
questions back and forth from Senators.
    The first witness is Steve Burd, Founder and CEO of Burd 
Health. He was CEO of Safeway for 20 years, and many of us met 
him when he roamed the halls during the debate on the 
Affordable Care Act, both the Democratic and Republican halls, 
with a message about wellness.
    Second, we will hear from Dr. Michael Roizen, the Chief 
Wellness Officer and Founding Chair of the Wellness Institute 
at the Cleveland Clinic, a program that I just described in my 
opening remarks.
    Dr. David Asch, is Executive Director of Penn Medicine 
Center at the Health Care Innovation, and John Morgan 
Professor, Perelman School of Medicine and the Wharton School 
at the University of Pennsylvania. He is a Leading Behavioral 
Economist with much research on healthy lifestyle choices.
    Then, Jennifer Mathis is Director of Policy and Legal 
Advocacy at the Judge David L. Bazelon Center for Mental Health 
Law. She supervises the Center's policy work and engages in 
advocacy.
    Why do we not start with you, Mr. Burd?
    Welcome.

                    STATEMENT OF STEVE BURD

    Mr. Burd. All right. Well, thank you. Thank you very much.
    I think the first thing I would like to say is that I very 
much appreciate the opportunity to share my experience in the 
wellness category with the Committee here. I really want to 
applaud your willingness to work in a bipartisan fashion to 
improve the health of Americans and ultimately legislation that 
attaches to that.
    I am going to go quickly through a little bit of background 
of what I have done since I left Safeway in the CEO position 
because it has impacted how I think about the subject.
    Second, I want to talk about why we picked wellness as a 
real important area.
    Third, I am going to cover the elements of the wellness 
program that we introduced at Safeway. I think it is most 
instructive because we have had a 10-year run. We know what the 
statistics look like after some 10 years.
    I am going to speak to the results that we achieved, which 
I think are extraordinary, and I think indicative of what 
others can do.
    Then finally, I want to talk about what I think are the 
five keys to success in a company wellness plan because most 
people have failed at this. I know that Michael and I, and 
maybe others here that will testify, have succeeded. I think 
you will find some common success elements.
    After leaving Safeway, while at Safeway as the Chairman 
indicated, I got very involved in healthcare and discovered 
that it was a fascinating area; a great opportunity to improve 
the health of Americans, opportunity to improve care without 
adding to costs, and frankly, an opportunity to dramatically 
lower costs. I committed to spending the next 10 years of my 
life, and I have now spent four, in this space.
    What I wanted to do was to tell you briefly what my company 
does is we do three things that are unique.
    We are able to lower a company or organization's costs, 
actually 40 to 50 percent, simultaneously lower the employee's 
expense about 6 to 10 percent.
    We are also capable of significantly improving the care 
they receive.
    If they are willing, we can have a dramatic effect on the 
wellness of their population, which has profound effects on the 
productivity of that workforce.
    I picked wellness back in 2008 because we took note that 
about 70 percent of all healthcare costs are driven by 
healthcare behavior. So we thought as a self-insured employer 
with the right to design a plan however we chose, we could 
actually affect behaviors and people would become healthier.
    I want to just put into context for you, because I know you 
will, at some point, want to understand how to reduce costs. 
That, in the short run, there are other ways to reduce costs 
more significantly. The first one I would mention would be 
provider efficiency, then plan discipline, plan design, and 
then wellness.
    In the first 5 years, I have put wellness in the fourth 
place. In the next five to 10 years, I would put it probably 
close to second place or third place. So there is an 
opportunity there.
    On the wellness front, we put together a program at Safeway 
and we made it a voluntary program, which I am not sure 
everybody understood at the time. Eighty Five percent of our 
employees opted-in to this plan, and 70 percent of the spouse's 
opted-in to this plan.
    We rewarded people for achieving certain biometric 
standards with about $600 worth of reward. When we polled 
people, as we did annually, about 78 percent of the 
participants viewed the program as either very good or 
excellent. What we measured was blood pressure, HbA1c, 
cholesterol, tobacco use, and BMI.
    As I said, the results were amazing, and I will give you a 
2-year look after starting the program.
    Of the people that failed the blood pressure standard, 2 
years later, 73 percent of them passed and they maintained that 
over the balance of the program.
    Pre-diabetics, of those that failed initially, 45 percent 
of them passed 2 years later.
    Cholesterol level, 43 percent of those passed 2 years 
later.
    Smokers, I have a number of 35 percent. In fairness, you 
can beat that test and so while we did improve the smoking, 35 
percent is a bit strong.
    Then we took the obesity rate of our population of 28 
percent down to 21 percent. I had a goal to be, if we were a 
state, we would be the lowest obesity state in the United 
States. Senator Bennet, at that time, Colorado held that 
position. When I left in 2013, we matched Colorado at 21 
percent.
    I want to just move, shift quickly, because it says I have 
9 seconds left.
    Why did we succeed?
    First of all, we rewarded on outcomes, not participation. 
The vast majority of programs, they say they are outcome-based. 
They are not. They are participation-based.
    We had to put a meaningful amount of money at stake. We 
viewed that starting point as about $600.
    We needed to provide support tools that would allow people 
to actually change their behavior and enhance their state of 
health.
    We needed to surround it with an ecosystem that constantly 
convinced the employee that we cared about their health. We can 
talk more about that in the Q and A.
    Then, we consciously developed a culture of health and 
fitness. I did this when I was about 57 years of age, and I 
understood that my fitness level down the road was going to 
determine my state of health. Once you become immobile, your 
health begins to decline. So we focused on health and fitness.
    Then last, it needs leadership and I practice this with 
clients today. If you do not have CEO leadership, it just does 
not work.
    I would contend, you cannot pick three of the five. In my 
experience, you have to do all five.
    [The prepared statement of Mr. Burd follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Thank you, Mr. Burd.
    Dr. Roizen, welcome.

                 STATEMENT OF MICHAEL F. ROIZEN

    Dr. Roizen. Thank you.
    Chairman Alexander, Ranking Member Murray, and Members of 
the Committee.
    My name is Dr. Mike Roizen, and I thank you for the 
opportunity to testify today before your Committee.
    Since 2007, I have served as the Chief Wellness Officer at 
the Cleveland Clinic. In this capacity, I lead the Clinic's 
work in preventing illness and helping people live longer, 
healthier lives.
    We give people more time. Keeping people well, and enabling 
them to live their best lives, is not just my professional 
goal, it is my passion, my life's work, and the passion of the 
Cleveland Clinic.
    Thank you for your leadership in holding this important 
hearing. In fact, the title of the hearing encapsulates the 
Cleveland Clinic's story. That is, how healthy choices can 
improve health outcomes and substantially reduce medical costs.
    We are hopeful that sharing the results of our efforts over 
the last 9 years can demonstrate that we, as a Nation, can have 
real impacts on the health of our people while resulting in 
hundreds, literally hundreds of billions of dollars in savings 
for both the private sector and the Federal Government.
    For years, the central healthcare debate in Washington has 
been about what role government should play in providing health 
insurance. If leaders in Washington do not address the 
skyrocketing costs of healthcare caused by the influx of 
chronic disease, it will not matter whether Medicare, Medicaid, 
private insurance, or individuals pay the bills.
    Everyone in this room has seen the CBO estimates. Unless we 
do something to bend the cost curve, we will all be bankrupt 
from this influx of chronic disease that is growing five to 
seven times faster than the population.
    There is, however, something that both the Federal 
Government and private insurers could do right now to 
significantly reduce healthcare costs across the country, a 
step that could save our Nation hundreds of billions over 10 
years and with voluntary participation.
    Nine years ago, the Cleveland Clinic began an ambitious 
experiment to improve the health and wellness of its employees 
and their families.
    The Clinic's Rewards for Healthy Choice program provides 
employees, who voluntarily choose to do so, much like Mr. Burd, 
with compensation for reaching several outcomes, wellness 
outcomes and medical outcomes, that you mentioned, each year.
    The program is born of a few key insights about the causes 
of chronic disease and the drivers of healthcare spending.
    It starts with the fact that 84 percent of all healthcare 
costs are due to chronic disease and 75 percent of chronic 
diseases are driven by six measurable factors: your blood 
pressure; your Body Mass Index; your fasting blood sugar or 
hemoglobin A1c; your LDL cholesterol; whether you smoke or not, 
we measure it by urine cotinine levels; and unmanaged stress.
    These six predictors of chronic disease are controllable in 
well over 90 percent of individuals. The Cleveland Clinic 
Rewards for Healthy Choice program focuses on helping its 
100,000 employees and dependents get and keep these six 
measurements normal; combined with encouraging those two 
additional behaviors: seeing a primary care provider regularly 
and keeping immunizations up to date.
    The Clinic program helps employees get these six normals. 
The way we do it is we pay employees; that is, we incentivize 
employees. We ended up--we started very small--but ended up by 
increasing payments to about the same number as Mr. Burd to 
achieve the six normals and the two behaviors.
    The upshot, since the onset of the program, the Cleveland 
Clinic has saved $254 million in direct medical costs 
increasing yearly. This year we will save over $150 million 
more versus the Milliman Benchmark as more of our employees get 
and stay healthy. Further, their improved health is reflected 
in substantial reductions in unscheduled sick leave.
    The 62 percent of Clinic employees who voluntarily 
participate in the program have seen their healthcare costs and 
premiums decrease now by $600 for individuals to $2,000 
annually for families for hitting these targets.
    Smoking rates have decreased from 15.4 to under 5 percent 
while the state of Ohio is around 23 percent.
    Body Mass Index of employees, for all 100,000 employees 
taken together, is decreasing 0.5 percent per year as opposed 
to the Nation's increasing 0.37 percent per year.
    Blood pressure, LDL cholesterol, and hemoglobin A1c levels 
have improved substantially resulting in over an 11 percent 
decrease in the need for illness care since 2009 rather than 
the expected and projected 20 percent increase due to our aging 
population.
    The Cleveland Clinic model has been replicated with our 
help by nine other large employers, all of whom have seen 
similar impressive results. For example, Lafarge, a national 
construction supply company, is saving over 46 percent of 
expected medical costs as estimated by Aetna. We know that 
other organizations can learn from these examples.
    In short, the Cleveland Clinic Rewards for Healthy Choice 
program is doable, exportable, and scalable across the country.
    The Clinic has been working to educate lawmakers on this 
idea, and Senators Ron Wyden and Rob Portman are collaborating 
to work in the Senate Finance Committee aimed at reducing the 
costs and improving health of Medicare beneficiaries.
    It does not have to stop with federal programs. Private 
sector programs, supported by this Committee, could benefit by 
the work we have pioneered.
    This program has at least three critical virtues. It has 
been tested in multiple settings across different populations 
and patient groups, everything from engineers to blue collar 
workers. It is entirely voluntary, and it enables the Federal 
Government to achieve substantial cost savings without any of 
the programmatic budget cuts and without any initial costs.
    Bending the cost curve through voluntary wellness and 
incentive programs is a commonsense idea that both Democrats 
and Republicans should be able to rally around for both the 
health of our Nation's finances and the health of our people, 
and it increases our competitiveness for jobs.
    Thank you.
    [The prepared statement of Dr. Roizen follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    The Chairman. Thank you, Dr. Roizen.
    Dr. Asch, welcome.

                   STATEMENT OF DAVID A. ASCH

    Dr. Asch. Chairman Alexander, Ranking Member Murray, and 
distinguished Members of the Committee.
    Thank you for the opportunity to speak with you today.
    My name is David Asch, and I am a practicing physician and 
a professor at the University of Pennsylvania. I am here to 
talk about workplace health programs and their role in the 
Nation's health.
    My summary message is this: I believe that employer-
sponsored wellness programs have value to contribute.
    I believe that even though the health and financial 
benefits of these programs are often overstated. I believe that 
even though some of these programs, and the ways they are 
currently designed, risk treating some employees unfairly.
    I am optimistic about these programs going forward because 
we are learning how to design them to be much more effective 
and much more fair.
    Americans spend most of their time outside of the 
healthcare system. Even those with a chronic illness spend only 
a few hours a year in front of a doctor.
    We spend about 5,000 waking hours a year doing everything 
else in our lives. It is during those 5,000 hours when so many 
of the determinants of our health unfold: how we eat, whether 
we exercise, smoke, or take our prescribed medications.
    We can put more and more money into healthcare, but much of 
our health is determined in the 5,000 waking hours outside the 
reach of doctors and hospitals.
    Americans spend many of those waking hours at work and 
employers have a large financial incentive to advance health, 
not just because of our system of employment-based health 
insurance, but also because healthier workers are more 
productive.
    More than three-quarters of large employers now have some 
sort of workplace wellness program targeting risk factors, that 
you have heard about already, that account for much of chronic 
illness. Risk factors like tobacco use, high blood pressure, 
obesity, and the like.
    Unfortunately, it is a lot easier to know what conditions 
to target than it is to know how to do so. Managing these 
conditions requires substantial behavioral change.
    Our Nation has invested considerably in the science of 
medical treatment, as it should, but less in the science of 
behavioral change. Our knowledge of how to break old habits and 
develop healthier ones is rudimentary, but it is getting 
better.
    Behavioral economics is one example of how we are learning 
more about changing behavior. Just last week, Richard Thaler, 
of the University of Chicago, won the Nobel Prize in economics 
for recognizing that we all succumb to irrational tendencies 
that compete with our long term goals.
    Increasingly, behavioral economics has been used to help 
doctors and patients make better decisions. I am proud to say 
that the University of Pennsylvania is a world leader in this 
field.
    One such irrationality is called loss aversion. We are much 
more motivated to avoid $100 loss than we are to achieve $100 
gain. It does not make economic sense, but it is how humans 
tend to think.
    We found this recently when encouraging overweight 
employees at a large firm to increase their fitness. In one 
group, employees were given $1.40 for each day that they walked 
at least 7,000 steps. That is a standard, economic, financial 
incentive.
    For another group, we structured it as a loss, $1.40 a day 
is $42 a month. So in that group, we gave each employee $42 at 
the beginning of the month and we took away $1.40 for every day 
they did not walk 7,000 steps.
    An economist would see those two designs as the same. For 
every day you walk 7,000 steps, you are $1.40 richer.
    It turned out that those who received $1.40 were no more 
likely to walk 7,000 than those who received no incentive at 
all.
    Those who had $1.40 taken away if they did not walk 7,000 
steps were 50 percent more likely to succeed.
    Mathematically and financially, these two approaches are 
the same, but one worked and the other did not.
    Most large companies are using financial incentives to 
encourage healthy behaviors. The vast majority of them do so by 
adjusting the premiums their employees pay for their health 
insurance.
    Although it may seem obvious that charging higher premiums 
for being a smoker or being overweight would encourage people 
to modify their habits, there is little evidence that programs 
designed that way often work. At best, they provide modest 
financial benefits to employers and unclear health benefits to 
employees.
    These programs offer promise, but they also draw criticism.
    I remain, nevertheless, excited about well-designed 
programs that help Americans change the behaviors they want to 
change: help them quit tobacco, help them lose weight, and help 
them better manage their high blood pressure.
    Those changes are much less likely to come from typical 
premium-based financial incentives and much more likely to come 
from approaches that reflect the underlying psychology of how 
people make decisions encouraged by frequent rewards, emotional 
engagement, contests, and social acceptance. Those are the 
ingredients of successful programs and they are missing from 
most of what employers currently do.
    We know so much more about how to design financial and 
other incentives to motivate human behavior far more now than 
even 10 years ago. I have not seen much of this new knowledge 
applied effectively by employers, but there is no reason why it 
cannot be.
    Thank you for inviting me to testify.
    I look forward to your questions.
    [The prepared statement of Dr. Asch follows:]
                  Prepared Statement of David A. Asch
         I believe that employer sponsored wellness programs 
        have value to contribute--even though the health and financial 
        benefits of these programs are frequently overstated, and even 
        though some of these programs--in the ways they are currently 
        designed--risk treating some employees unfairly. I am 
        optimistic about these programs going forward, because we are 
        learning how to design them to be much more effective and much 
        more fair.
         More than three quarters of large employers now have 
        some sort of workplace wellness program to eliminate the use of 
        tobacco, reduce obesity, or manage other risk factors for 
        chronic disease. Most large companies are using financial 
        incentives to encourage healthy behaviors. The vast majority of 
        them do so by adjusting the premiums their employees pay for 
        their health insurance.
         Although it may seem obvious that charging higher 
        premiums for being a smoker or being overweight would encourage 
        people to modify their habits, there is little evidence that 
        programs designed that way actually work. Those that do seem to 
        work provide modest financial benefits to employers and unclear 
        health benefits to employees.
         Managing these conditions requires substantial 
        behavioral change and behavioral change is hard. centsehavioral 
        economics is an example of one way we are learning more about 
        changing behavior, and it offers promise for how to design 
        better programs in the future. The Penn Center for Health 
        Incentives and Behavioral Economics is 1 of 2 NIH-funded 
        Centers on behavioral economics and health and the world's 
        leader in designing programs to improve consumer health 
        behaviors.
         I'm excited about well-designed programs that help 
        Americans change the behaviors they want to change: help them 
        quit tobacco, help them lose weight, help them better manage 
        their high blood pressure. Those changes are much less likely 
        to come from typical premium-based financial incentives and 
        much more likely to come from approaches that reflect the 
        underlying psychology of how people make decisions--encouraged 
        by frequent rewards, emotional engagement, contests, social 
        acceptance. These are the ingredients of successful programs 
        and they are missing from most of what employers currently do.
         We know so much more now about how to design financial 
        and other incentives to motivate human behavior--far more now 
        than even 10 years ago. I haven't yet seen much of this new 
        knowledge applied effectively by employers but there's no 
        reason why it can't be.
                                 ______
                                 
                   Summary Statement of David A. Asch
    Chairman Alexander, Ranking Member Murray, and distinguished 
Members of the Committee:
    Thank you for the opportunity to speak with you today. My name is 
David Asch. I am a physician, and a professor at the University of 
Pennsylvania.
    I am here to talk about workplace health programs and their role in 
the nation's health. My summary message is this: I believe that 
employer sponsored wellness programs have value to contribute. I 
believe that even though the health and financial benefits of these 
programs are often overstated. I believe that even though some of these 
programs, in the ways they are currently designed, risk treating some 
employees unfairly. I am optimistic about these programs going forward, 
because we are learning how to design them to be much more effective 
and much more fair.
    Americans spend most of their time outside of the health care 
system. Even those with a chronic illness spend only a few hours a year 
with a doctor. We spend 5,000 waking hours each year doing everything 
else in our lives. It is during those 5,000 hours when so many of the 
determinants of our health unfold: how we eat, whether we exercise, 
smoke, or take our prescribed medications. We can put more and more 
money into health care, but much of our health is determined in the 
5,000 waking hours outside the reach of doctors and hospitals.\1\
---------------------------------------------------------------------------
    \1\ Asch DA, Muller RW, Volpp KG. Automated hovering in health 
care: watching over the 5,000 hours. N Engl J Med. 2012;367:1-3.
---------------------------------------------------------------------------
    Americans spend many of those waking hours at work. Employers have 
a large financial incentive to advance health, not just because of our 
system of employment-based health insurance, but also because healthier 
workers are more productive.
    More than three quarters of large employers now have some sort of 
workplace wellness program, targeting risk factors that together 
account for most chronic illness. These include:

         Eliminating the use of tobacco
         Controlling high blood pressure
         Reducing obesity
         Increasing exercise
         Lowering cholesterol
         Managing diabetes

    Unfortunately, it is a lot easier to know what conditions to target 
than to know how to do so. Managing these conditions requires 
substantial behavioral change.
    Our Nation has invested considerably in the science of medical 
treatment, but less in the science of behavioral change. Our knowledge 
of how to break old habits and develop healthier ones is rudimentary, 
but it is getting better.
    Behavioral economics is one example of how we are learning more 
about changing behavior. Last week, Richard Thaler of the University of 
Chicago won the Nobel Prize in economics for recognizing that we all 
succumb to irrational tendencies that compete with our long term goals.
    Increasingly, behavioral economics has been used to help doctors 
and patients make better decisions. I'm proud to say that the 
University of Pennsylvania is a world leader in this field.
    One such irrationality is called loss aversion. We are much more 
motivated to avoid a $100 loss than we are to achieve a $100 gain. It 
doesn't make economic sense, but it is how humans tend to think.
    We found this recently when encouraging overweight employees at a 
large firm to increase their fitness.\2\ In one group, employees were 
given $1.40 for each day they walked at least 7,000 steps. That's a 
standard economic financial incentive. For another group, we structured 
it as a loss. $1.40 a day is $42 a month. So, in that group, we gave 
each employee $42 at the beginning of the month and we took away $1.40 
for every day they didn't walk 7,000 steps. An economist would see 
these two designs as the same: for every day you walk 7,000 steps, you 
are $1.40 richer. It turned out that those who received $1.40 were no 
more likely to walk 7,000 steps than those in a control group that 
received no financial incentive. However, those who had $1.40 taken 
away if they didn't walk at least 7,000 steps were 50 percent more 
likely to succeed. Mathematically and financially, these two approaches 
are the same, but one worked and the other didn't.
---------------------------------------------------------------------------
    \2\ Patel MS, Asch DA, Rosin R, Small DS, Bellamy SL, Heuer J, 
Sproat S, Hyson C, Haff N, Lee SM, Wesby L, Hoffer K, Shuttleworth D, 
Taylor DH, Ulrich V, Zhu J, Yang L, Wang X, Volpp KG. Framing financial 
incentives to increase physical activity among overweight and obese 
adults--a randomized, controlled trial. Ann Intern Med. 2016;164:385-
94.
---------------------------------------------------------------------------
    Most large companies are using financial incentives to encourage 
healthy behaviors. The vast majority of them do so by adjusting the 
premiums their employees pay for their health insurance.
    Although it may seem obvious that charging higher premiums for 
being a smoker or being overweight would encourage people to modify 
their habits, there is little evidence that programs designed that way 
often work.\3\ At best they provide modest financial benefits to 
employers and unclear health benefits to employees.
---------------------------------------------------------------------------
    \3\ Volpp KG, Asch DA, Galvin R, Loewenstein G. Redesigning 
employee health incentives--lessons from behavioral economics. N Engl J 
Med. 2011;365:388-90.
---------------------------------------------------------------------------
    These programs offer promise but they also draw criticism. One 
criticism is that they can be seen as coercive. Programs are more 
likely to be seen as coercive to the extent they put a lot of money at 
risk, whether in the form of rewards or penalties. I think that problem 
is avoidable. Most current employer programs are based on the idea that 
the more money you put at risk, the more effective the incentive. 
That's a mistake based on outdated economic thinking and it can create 
unfairness. We've designed programs that trade on psychological 
principles of behavioral economics that are often much more effective 
than programs putting considerably larger amounts of money at risk. 
Those designs can be more effective, and they can be fairer.
    In general, the key fairness question is this: How much can the 
behaviors we most want to target be modified through incentive programs 
and how much are we just punishing the people with those behaviors?\4\
---------------------------------------------------------------------------
    \4\ Loewenstein G, Volpp KG, Asch DA. Incentives in health: 
Different prescriptions for physicians and patients. JAMA. 
2012;307:1375-6.
---------------------------------------------------------------------------
    To the extent these programs are not effective at changing 
behavior, then all they are doing is cost-shifting. Employees who smoke 
or are obese tend to be the poorest, and they will end up paying the 
highest rates. That kind of cost-shifting just moves around the money, 
and it is regressive.
    I remain excited about well-designed programs that help Americans 
change the behaviors they want to change: help them quit tobacco, help 
them lose weight, help them better manage their high blood pressure. 
Those changes are much less likely to come from typical premium-based 
financial incentives and much more likely to come from approaches that 
reflect the underlying psychology of how people make decisions--
encouraged by frequent rewards, emotional engagement, contests, social 
acceptance. These are the ingredients of successful programs and they 
are missing from most of what employers currently do.\5\
---------------------------------------------------------------------------
    \5\ Asch DA, Rosin R. Engineering social incentives for health. N 
Engl J Med. 
2016;375:2511-3.
---------------------------------------------------------------------------
    We know so much more now about how to design financial and other 
incentives to motivate human behavior--far more now than even 10 years 
ago. I haven't yet seen much of this new knowledge applied effectively 
by employers but there's no reason why it can't be.
    Thank you for inviting me to testify today. I look forward to your 
questions.

    The Chairman. Thank you, Dr. Asch.
    Ms. Mathis, welcome.

                  STATEMENT OF JENNIFER MATHIS

    Ms. Mathis. Thank you.
    Chairman Alexander, Ranking Member Murray, and Members of 
the Committee.
    I appreciate the opportunity to testify about this 
important issue. My name is Jennifer Mathis and Chairman 
Alexander noted my position at the Bazelon Center for Mental 
Health Law.
    I am here also as a representative of the Consortium for 
Citizens with Disabilities, or CCD, a coalition of over 100 
national disability organizations that work together to promote 
public policy, ensuring the self-determination, independence, 
empowerment, integration, and inclusion of adults and children 
with disabilities in all aspects of society.
    I appreciate the breadth of the topic for this hearing. 
Obviously, there are many different ways that we can promote 
healthy choices that improve health outcomes and reduce costs, 
and many different stakeholders who can do so.
    The primary concern that animates this hearing seems to be 
the role of employer-based wellness programs. I also think it 
is important to mention the role of state service systems. 
Particularly those for people with disabilities and older 
adults in planning and administering service systems in a way 
that expands opportunities for independence, choice, and 
autonomy; enabling people to exert more control and participate 
actively in their own healthcare, direct their own lives, and 
work.
    We have seen from numerous studies over many years that 
realigning service systems to offer people with disabilities 
the chance to live, work, and receive services in their own 
communities leads to improved health outcomes and also lowers 
cost.
    I am happy to answer any questions about that, but I will 
focus the rest of my comments on workplace wellness programs.
    CCD has supported the development of wellness programs as a 
tool to improve life and health outcomes. Those programs can, 
and must, operate in a way that respects longstanding and 
important workplace protections, such as those provided by the 
Americans with Disabilities Act, or ADA, and the Genetic 
Information Nondiscrimination Act, or GINA, especially 
workplace privacy protections. People with disabilities need 
these protections.
    The employment rate of people with disabilities is much 
lower than that of any other group tracked by the Bureau of 
Labor Statistics. They are employed at less than half of the 
rates of people without disabilities.
    Study after study that has examined why the employment rate 
of people with disabilities is so low cites attitudinal 
barriers as one of the chief reasons. Perceptions that people 
with disabilities are incapable continue to be pervasive 
including in our workplaces.
    It was precisely for that reason that when Congress passed 
the ADA, one of our most important civil rights laws for people 
with disabilities, it created strict protections to enable 
employees to keep their health and disability-related 
information confidential in the workplace.
    Employees could be subjected to medical exams or inquiries 
only if they were job-related, or if they were voluntary 
inquiries that were part of an employee health program. GINA 
provided similar protections for employees' genetic information 
including their spouse's health information.
    Removing or weakening those hard-won protections would make 
many people with disabilities vulnerable in their workplaces 
and expose them to the risks that Congress meant to avoid.
    Last year, the EEOC significantly rolled back the 
protection that it had enforced for many years to ensure that 
employers could not penalize employees for declining to provide 
their health information as part of a wellness program.
    The agency, instead, permitted steep financial penalties 
for employees who choose to keep their health information 
private and more steep penalties if their spouses chose to keep 
their health information private, making this choice far from a 
voluntary one for many people.
    A Federal judge has now ruled that the agency violated the 
law and failed to provide a reasoned justification for this 
change in position.
    The agency now has an opportunity to revisit its 
regulations and do the right thing to afford people the rights 
guaranteed by the ADA and GINA.
    We believe it is not difficult for the EEOC to ensure that 
wellness programs serve to promote the healthy choices and 
healthy outcomes while respecting important civil rights of 
people with disabilities.
    The agency set out a path for doing this in its 2010 
regulations implementing GINA, clarifying that financial 
incentives can be used, but not for questions asking for 
genetic information. The same rule should apply to questions 
about seeking health information of an employee or a spouse.
    The lead study on wellness programs conducted for the 
Department of Labor highlighted many strategies other than 
incentives that have made wellness programs more effective.
    Good wellness programs can be designed without eroding the 
civil rights of people with disabilities and we will all be 
better served if that happens.
    Thank you.
    [The prepared statement of Ms. Mathis follows:]
                 Prepared Statement of Jennifer Mathis
    Thank you for inviting me to testify concerning this important 
issue. My name is Jennifer Mathis. I serve as Director of Policy and 
Legal Advocacy at the Bazelon Center for Mental Health Law, a national 
non-profit organization that works to promote equal opportunities for 
individuals with mental disabilities in all aspects of life through 
litigation, policy advocacy and public education. I am here also on 
behalf of the Consortium for Citizens with Disabilities (CCD), the 
largest coalition of national organizations working together to 
advocate for Federal public policy that ensures the self-determination, 
independence, empowerment, integration and inclusion of children and 
adults with disabilities in all aspects of society.
    Since the Committee's topic is broad, I will address employer-
sponsored wellness programs as well as describing some ways in which 
broader health service delivery systems can and have promoted healthy 
choices that result in better health outcomes and reduced costs.
    Workplace Wellness Programs May Hold Potential to Improve Health 
Outcome and Reduce Costs, but Must Not Erode Critical Workplace 
Protections for People with Disabilities
    Employer-sponsored wellness programs have become increasingly 
prevalent as employers look for ways to reduce employee health care 
costs. According to the Kaiser Family Foundation, 90 percent of large 
companies that offer health benefits offer some type of wellness 
program.\1\ These programs may include health risk assessments and 
biometric screenings, as well as classes or other activities to help 
employees stop smoking, lose weight, or adopt healthier lifestyles or 
to manage chronic diseases such as diabetes.
---------------------------------------------------------------------------
    \1\ Karen Pollitz & Matthew Rae, Henry J. Kaiser Family Foundation, 
Changing Rules for Workplace Wellness programs: Implications for 
Sensitive Health Conditions, at 2 (April 2017), http://files.kff.org/
attachment/Issue-Brief-Changing-Rules-for-Workplace-Wellness-Programs.
---------------------------------------------------------------------------
    While CCD believes that employer-based wellness programs have 
potential to promote individuals' health and well-being, we believe it 
is critical that such programs be administered in a way that does not 
undermine the workplace protections that Congress provided to employees 
with disabilities and their spouses in the Americans with Disabilities 
Act (ADA) and the Genetic Information Non-discrimination Act (GINA). 
These laws--both enacted with overwhelming bipartisan support--were 
adopted in response to a long history of workplace discrimination based 
on disability and on genetic information. They are important tools to 
help ensure fair workplaces for people with disabilities. In 
particular, they provide workplace privacy protections that enable 
people with disabilities to keep their health information private if it 
is not related to their ability to do their job, and to keep their 
spouses' health information private.
    People with disabilities need these protections. The employment 
rate of people with disabilities has remained far lower than that of 
any other group tracked by the Bureau of Labor Statistics. Among 
working age adults, the employment rate of people with disabilities is 
less than half of that for people without disabilities.\2\ This 
Committee has reported about the importance of efforts to improve this 
situation. In addition, the need to increase employment of people with 
disabilities has been a concern and a priority for Federal agencies 
including the Department of Labor, the Department of Justice, the 
Department of Health and Human Services, the Equal Employment 
Opportunity Commission, and others. Against this backdrop, it is 
particularly important to ensure that employer-based wellness programs 
are implemented in ways that promote healthy behaviors without eroding 
longstanding and critical workplace protections for people with 
disabilities.
---------------------------------------------------------------------------
    \2\ U.S. Department of Labor, Bureau of Labor Statistics, Persons 
with a Disability: Labor Force Characteristics Summary (June 21, 2017) 
(among persons age 16 to 64, the employment-population ratio in 2016 
for people with disabilities was 27.7 percent, in contrast to 72.8 
percent for people without disabilities), https://www.bls.gov/
news.release/disabl.nr0.htm.
---------------------------------------------------------------------------
    While the research over the last several years has consistently 
shown that the early assessments of workplace wellness programs' 
effectiveness in improving health outcomes and achieving cost savings 
appear to have been overblown,\3\ the primary concern of the disability 
community has been the need for fair treatment by these programs. 
Whatever their utility, these programs should not punish people for 
having disabilities or pressure people to disclose sensitive health or 
disability information unrelated to their ability to do their jobs. The 
Affordable Care Act (ACA) and its implementing regulations provide some 
protection against wellness program incentives that punish people for 
having disabilities; where a program offers financial incentives to 
participants who meet a health standard or engage in an activity, the 
ACA requires that the program allow a person to meet a reasonable 
alternative standard if the person's medical condition makes it 
``unreasonably difficult'' or ``medically inadvisable'' to meet that 
health standard or engage in the activity.\4\
---------------------------------------------------------------------------
    \3\ See, e.g., Soeren Mattke et al., RAND Health, Workplace 
Wellness Programs Study: Final Report (2013), https://www.dol.gov/ebsa/
pdf/workplacewellnessstudyfinal.pdf; Soeren Mattke et al., RAND 
Corporation, Workplace Wellness Programs Services Offered, 
Participation, and Incentives (2014), https://www.dol.gov/sites/
default/files/ebsa/researchers/analysis/health-and-welfare/
WellnessStudyFinal.pdf; Jill R. Horwitz et al., Wellness Incentives In 
the Workplace: Cost Savings Through Cost Shifting to Unhealthy Workers, 
32 Health Affairs 468 (2013); Adrianno McIntyre et al., The Dubious 
Empirical and Legal Foundations of Wellness Programs, 27 Health Matrix 
59 (2017).
    \4\ U.S.C.  300gg-4(j)(3); 26 C.F.R.  54.9802-1,  (f)(3)(iv), 
(f)(4)(iv). The ADA also requires that reasonable accommodations be 
provided, absent undue hardship, to enable employees with disabilities 
to earn whatever financial incentive an employer offers in a wellness 
program. The reasonable accommodation requirement will often be 
satisfied by the provision of a reasonable alternative or waiver of the 
standard or activity. 29 C.F.R. Part 1630 Appx.,  1630.14(d)(3): 
Limitations on Incentives.
---------------------------------------------------------------------------
    Concerns remain, however, about the use of wellness program 
incentives that are used to pressure employees to give up their rights 
to keep their own health information and their spouse's health 
information private.
The ADA Requires Workplace Wellness Program Medical Inquiries and Exams 
        to be Voluntary
    The Americans with Disabilities Act (ADA) prohibits employers from 
subjecting employees to medical inquiries or exams that are not job-
related and consistent with business necessity, unless they are 
``voluntary medical examinations, including voluntary medical 
histories, which are part of an employee health program available to 
employees at that work site.''\5\
---------------------------------------------------------------------------
    \5\ 42 U.S.C.  12112(d)(4)(A), (d)(4)(B). See also EEOC 
Enforcement Guidance on Disability-Related Inquiries and Medical 
Examinations of Employees Under the Americans with Disabilities Act 
(July 27, 2000) at Question 22, http://www.eeoc.gov/policy/docs/
guidance-inquiries.html (``EEOC Guidance'').
---------------------------------------------------------------------------
    The ADA's medical inquiries provisions are part of a detailed 
scheme that Congress enacted to limit employer access to medical 
information from employees and applicants. Such limits are a core 
protection of the ADA. Due to the prevalence of negative attitudes 
about people with disabilities--including assumptions that they are not 
capable--Congress recognized that the best way to prevent 
discrimination was to ensure that employers simply did not have this 
information unless it was related to someone's job performance. See S. 
Rep. 101-116, at 39-40 (1989) (``An inquiry or medical examination that 
is not job-related serves no legitimate employer purpose, but simply 
serves to stigmatize the person with a disability. . . . As was 
abundantly clear before the Committee, being identified as disabled 
often carries both blatant and subtle stigma. An employer's legitimate 
needs will be met by allowing the medical inquiries and examinations 
which are job-related.'').
    As the EEOC noted in its guidance concerning disability-related 
inquiries of employees:
    Historically, many employers asked applicants and employees to 
provide information concerning their physical and/or mental condition. 
This information often was used to exclude and otherwise discriminate 
against individuals with disabilities--particularly non visible 
disabilities, such as diabetes, epilepsy, heart disease, cancer, and 
mental illness--despite their ability to perform the job. The ADA's 
provisions concerning disability-related inquiries and medical 
examinations reflect Congress's intent to protect the rights of 
applicants and employees to be assessed on merit alone, while 
protecting the rights of employers to ensure that individuals in the 
workplace can efficiently perform the essential functions of their 
jobs.\6\
---------------------------------------------------------------------------
    \6\ EEOC Guidance, General Principles.
---------------------------------------------------------------------------
    For many years, the EEOC defined ``voluntary'' wellness program 
medical inquiries and examinations to mean that an employer may neither 
require participation nor penalize employees who do not participate.\7\ 
In 2016, however, the agency abandoned that interpretation and issued 
regulations providing that such inquiries and examinations are 
``voluntary'' if the wellness program incentives for answering or 
participating do not exceed 30 percent of the cost of employee-only 
health insurance premiums. Such incentives would penalize employees who 
chose to exercise their privacy rights with penalties that could in 
many cases amount to thousands of dollars. At their maximum, these 
penalties would approximately double the amount that employees would 
have to pay for their health insurance. A Federal judge has since 
concluded that the agency failed to provide any reasoned justification 
for or evidence supporting its new position.\8\
---------------------------------------------------------------------------
    \7\ EEOC Guidance, Question 22. While the guidance speaks of 
``voluntary wellness programs'' rather than ``voluntary medical 
inquiries'' or ``voluntary medical examinations,'' it construes the 
ADA's text relating to ``voluntary medical examinations, including 
voluntary medical histories'' that are part of an employee health 
program. It is clear that the guidance refers to penalties for 
answering questions or undergoing medical exams.
    \8\31AAARP v. EEOC, Case No. 1:16-cv-02113-JDB, Memorandum Opinion 
(D.D.C. Aug. 22, 2017).
---------------------------------------------------------------------------
GINA Requires that Workplace Wellness Program Medical Inquiries of 
        Employees' Spouses be Voluntary
    GINA provides similar protections barring employers from 
requesting, requiring or purchasing employees' genetic information, 
including medical information of their spouses, with a similar 
exception for workplace wellness program requests that are voluntary. 
The EEOC's implementing regulations define voluntary to mean that an 
employer may neither require employees to provide genetic information 
nor penalize employees who decline to provide it.\9\ When the EEOC 
changed its rules concerning the ADA's application to wellness 
programs, it also changed its rules concerning GINA's application, 
defining voluntary requests for the health information of an employee's 
spouse to allow financial incentives of up to 30 percent of the cost of 
employee-only health insurance premiums.\10\ These incentives would be 
in addition to any incentives for disclosure of the employee's health 
information, with the potential to create astronomical increases in the 
cost of health insurance for families. The same Federal court that 
concluded that the agency failed to provide a reasoned justification or 
evidence supporting its new interpretation of ``voluntary'' under the 
ADA reached a similar conclusion about the agency's new interpretation 
of ``voluntary'' under GINA. The court remanded both rules to the 
agency, which must now revise its rules or provide appropriate support 
for them.
---------------------------------------------------------------------------
    \9\ 29 C.F.R.  1635.8(b)(2).
    \10\ C.F.R.  1635.8(b)(2)(iii).
---------------------------------------------------------------------------
    The EEOC now has an opportunity to revamp its regulations to ensure 
that employer efforts to promote employee wellness proceed without 
damaging the employment prospects of people with disabilities.
Penalizing the Exercise of Health Privacy Rights Damages the Employment 
        Prospects of Workers with Disabilities
    Such a ``wellness-or-else'' approach places significant pressures 
on many employees with disabilities to make unwanted disclosures of 
their health information, potentially putting their jobs at risk. Even 
though employers are not supposed to receive individually identifiable 
health information when a wellness program is run by a third party 
vendor, that protection offers little comfort to employees in employer-
run programs, and to employees in small workplaces where it is not 
difficult to connect knowledge that someone has a particular disability 
with the employee in question. Furthermore, data breaches of sensitive 
information are not uncommon. Given the widespread attitudinal barriers 
that continue to hold people with disabilities back from securing, 
maintaining, and advancing in employment, extracting steep financial 
penalties for employees who exercise their right to keep health 
information confidential damages the employment prospects of people 
with disabilities.
Other Avenues to Improve Wellness Programs
    We should be encouraging other means of improving wellness 
programs' effectiveness rather than encouraging steep financial 
penalties to try to force people to participate in wellness programs, 
including turning over sensitive health information. Notably, the 
principal author of the Federal Government-sponsored RAND study--the 
lead study on wellness program effectiveness--stated:

        Why do employees, and in particular those at high risk, choose 
        not to participate? We do not yet have the evidence or insight 
        to understand and convincingly answer that question. When we 
        do, we will be able to design attractive and accessible 
        programs. In the meantime, we should not penalize vulnerable 
        employees who are reluctant to join marginally effective 
        programs.\11\
---------------------------------------------------------------------------
    \11\ Soeren Mattke, When It Comes To the Value of Wellness, Ask 
About Fairness Not Just About Effectiveness, Health Affairs Blog (Mar. 
18, 2015), http://healthaffairs.org/blog/2015/03/18/when-it-comes-to-
the-value-of-wellness-ask-about-fairness-not-just-about-effectiveness/.

    The RAND study, which included almost 600,000 employees at seven 
employers, found that well designed wellness programs succeed in 
promoting employee participation without the use of incentives. The 
study notes that comprehensive programs with genuine corporate and 
manager engagement in wellness, and commitment to monitoring and 
evaluating programs, tend to succeed. By contrast, limited programs, 
such as those that only use health risk assessments to glean 
information about employees' health, tend not to inspire participation 
without the use of incentive and tend not to reduce costs or improve 
health.\12\
---------------------------------------------------------------------------
    \12\ Mattke 2013, supra note 3.
---------------------------------------------------------------------------
    The RAND study offered important guidance about factors that have 
demonstrated success in wellness programs. Those include, for example: 
clear communication about the goals of the particular wellness 
interventions being used, ensuring that the program's activities are 
convenient and easily accessible for all employees and consistent with 
their schedules, ensuring that the program's activities are aligned 
with employee preferences, soliciting ongoing feedback from employees, 
continuous evaluation of the program, strong support from leadership, 
and making full use of existing resources and relationships.
    These strategies, rather than eviscerating important workplace 
privacy protections, should be the focus of wellness program 
development.
    State Service Delivery Systems for People with Disabilities Can 
Expand Opportunities for Healthy Choices that Improve Health Outcomes 
and Reduce Costs
    The Committee's examination of the impact of healthy choices on 
health outcomes and costs implicates many more areas than employer-
based wellness programs, which play a relatively small role in this 
sphere. For example, state service systems have a critical role to play 
in enabling healthy choices that improve outcomes and reduce costs. The 
investments that states choose to make, and the manner in which they 
administer service delivery systems, have a significant impact on the 
available choices for people with disabilities to improve their health, 
and have significant potential to reduce health care costs.
    A key example of state strategies to promote healthy choices is the 
strategy of reallocating disability service system resources to 
decrease reliance on costly institutional services and expand home and 
community-based services, consistent with the ADA's ``integration 
mandate''. Expanding availability of key community-based services that 
enable people with significant disabilities to live in their own homes, 
participate in their communities, secure and maintain employment, and 
maintain health and well-being not only improves health outcomes but 
also significantly reduces costs.
    This Committee has held a number of bipartisan hearings in recent 
years to explore the progress of states in implementing the ADA's 
integration mandate. While those hearings demonstrated that we continue 
to have a long way to go in realigning service systems to promote 
independence and choice, they also underscored the importance of the 
shift toward community integration. The implementation of the 
integration mandate that has occurred in some states has demonstrated 
the improved health outcomes, improved life outcomes, and reduced costs 
realized through expanding community services and reallocating public 
service system dollars from costly institutional care to support people 
instead in their own homes and communities.
    Below are examples of two states that achieved significant service 
system transformations as a result of their efforts to implement the 
integration mandate.
    Delaware, through a settlement agreement entered with the U.S. 
Department of Justice, expanded core community services for people who 
received psychiatric inpatient care or emergency room care through 
public programs, who were homeless, or had a history of arrests or 
incarcerations. The development of this community capacity resulted in 
a decrease in the average census of the state psychiatric hospital by 
more than 55 percent--from 136 in Fiscal Year 2010 to 76 in 2016.\13\
---------------------------------------------------------------------------
    \13\ Tenth Report of the Court Monitor on Progress Toward 
Compliance with the Agreement: U.S. v. State of Delaware, U.S. District 
Court for the District of Delaware, Civil Action No: 11-591-LPS (Sept. 
19, 2016), https://www.ada.gov/olmstead/documents/de_10th_report.pdf.
---------------------------------------------------------------------------
    In 2015, Delaware regularly diverted over 70 percent of individuals 
in crisis from acute psychiatric beds into less expensive community 
crisis services.\14\ Delaware also achieved a significant expansion in 
the number of people with serious mental illness receiving employment 
supports and working, quadrupling the percentage of individuals in the 
target population who were employed.\15\ Many thousands of individuals 
with serious mental illness have received needed community services and 
avoided institutionalization because of the service expansions and 
policy changes undertaken.
---------------------------------------------------------------------------
    \14\ Id.
    \15\ Id.
---------------------------------------------------------------------------
    In New Jersey, an agreement between the state and the state 
protection and advocacy system, Disability Rights New Jersey, was 
reached in 2009 to develop community services for hundreds of people 
who remained institutionalized in state psychiatric hospitals even 
though they had been determined to no longer need hospital care, due to 
the lack of community alternatives--as well as hundreds more who were 
at risk of admission to state psychiatric hospitals. New Jersey 
committed to provide these individuals with the services they need to 
live independent, integrated lives in the community.
    The state developed 1436 new supported housing units for 
individuals waiting to be discharged from the state hospitals and for 
those at risk of admission to these facilities. It successfully 
discharged 294 of the 297 individuals who had been awaiting discharge 
for more than 1 year. In addition, New Jersey significantly reduced the 
length of time for which individuals remained hospitalized due to the 
lack of community services, ensuring more prompt discharges.
    As a result of the increased access to supported housing and other 
services, New Jersey reduced admissions to psychiatric hospitals by one 
third between 2006 and 2010, a rate that has remained steady over 
subsequent years. In 2016, admissions had declined 36 percent from 2006 
and the average daily census within state hospitals declined by 33.7 
percent. The average daily census of the state psychiatric hospitals 
also shrunk by 34 percent, from 2,122 in 2006 to 1,406 in 2016.\16\
---------------------------------------------------------------------------
    \16\ New Jersey Dep't of Human Services, Division of Mental Health 
& Addiction Services, Home to Recovery 2, 2017-2020, A Vision for the 
Next Three Years (Jan. 2017),at 12, 13, http://www.nj.gov/
humanservices/dmhas/initiatives/olmstead/Home%20to%20Recovery%202%20Pla 
%20-%20January %202017.pdf.
---------------------------------------------------------------------------
    In addition, the number of individuals remaining in state 
psychiatric hospitals due to the lack of community options has shrunk 
by more than two-thirds since 2006. In 2006, these individuals 
comprised nearly half of all state hospital residents, whereas in 2016, 
they comprised only 22 percent of state hospital residents.\17\ The 
reduction in hospital beds has enabled the state to achieve a very 
significant expansion of community services. Over roughly the same 
period, the number of individuals served in the community has grown by 
almost 60,000 people.\18\ Supported housing is now the most common 
setting for individuals discharged from New Jersey's state psychiatric 
hospitals who need a place to live upon discharge.
---------------------------------------------------------------------------
    \17\ Id.
    \18\ New Jersey Dep't of Human Services, Division of Mental Health 
& Addiction Services, Realignment of the NJ Mental Health System 
(powerpoint, July 1, 2015).
---------------------------------------------------------------------------
    Such system realignment efforts have also been undertaken to afford 
individuals in nursing homes, institutions for individuals with 
intellectual and developmental disabilities, and board and care homes 
to live more independently in their own homes and communities. This 
type of systems change allowing people to exercise greater control over 
their own lives, and in many instances, to secure and maintain 
employment, is an important aspect of enabling people to make healthy 
choices, improve health outcomes, and reduce costs. Any examination of 
efforts to advance healthy choices should include the role of state 
service systems in addition to the role of employers in doing so.

    The Chairman. Thank you, Ms. Mathis.
    We will now have a round of 5 minute questions. We will 
start with Senator Young.

                       Statement of Senator Young

    Senator Young. Thank you, Mr. Chairman.
    I am very excited about this hearing because I know a 
number of our witnesses have discussed in their testimonies 
behavioral economics and behavioral decisionmaking.
    I think it is really important that we, as policymakers, 
incorporate how people really behave, not according to an 
economist per se or according to other policy experts, but 
based on observed behaviors. Oftentimes, we behave in ways that 
we do not intend to. It leads us to results that we do not want 
to end up in.
    Dr. Asch, I will start with you, with your expertise in 
this area. You have indicated behavioral economics is being 
used to help doctors and patients make better decisions, and 
you see an opportunity for employers to help Americans change 
their behaviors in ways they want; from tobacco mitigation, to 
losing weight, to managing blood pressure.
    You indicate those changes are much less likely to come 
from typical premium-based financial incentives and much more 
likely to come from approaches that reflect the underlying 
psychology of how people make decisions encouraged by frequent 
rewards, emotional engagement, contests, social acceptance, and 
so forth.
    Then you said in your verbal testimony, you have not seen 
much of this new knowledge applied effectively by employers, 
but there is no reason why it cannot be.
    My question for you, sir, what might employers learn from 
behavioral economists, just in summary fashion?
    Dr. Asch. Well, thank you, Senator.
    I will start by saying that there is a misunderstanding 
often about behavioral economics and health. Many people 
believe that if you use financial incentives to change 
behavior, you are engaged in behavioral economics.
    I would say no. That is just economics. It becomes 
behavioral economics when you use an understanding of our 
little psychological foibles and pitfalls to sort of 
supercharge the incentives and make them more potent so that 
you do not have to use incentives that are so large.
    There are a variety of approaches that come from behavioral 
economics that can be applied in the employment setting and 
elsewhere.
    I mentioned one, which is capitalizing on the notion that 
losses loom larger than gains might be a new way to structure 
financial incentives in the employment setting in ways that 
might make it more potent and more palatable, and easier for 
all employees to participate in programs to advance their 
health.
    The delivery of incentives more frequently, for example, or 
using contests, or certain kinds of social norming where it is 
acceptable to show people on leader boards, and contests, and 
get people engaged in fun toward their health.
    All of these are possibilities.
    Senator Young. Thank you very much.
    You really need to study these different phenomena 
individually, I think, to have a sense of the growing body of 
work that is behavioral economics. So we need to increase 
awareness and the education of many employers about some of 
these tics we have and that seems to be part of the answer.
    In fact, Richard Thaler, who just won the Nobel Prize for 
his groundbreaking work in this area, indicated that we, as 
policymakers, ought to have on a regular basis, not just 
lawyers and economists at the table as we are drafting 
legislation, but we ought to have a behavioral scientist as 
well.
    In the U.K., they have the Behavioral Insights Team. The 
United States, our previous Administration, had a similar sort 
of team that did a number of experiments to figure out how 
policies would actually impact individuals' health, and 
wellness, and a number of other things.
    Some of the ideas that I think we might incorporate into 
the Government context, and tell me if any of these ``pop'' for 
you, if you think they make sense.
    We need to continue to have a unit or units embedded within 
Government that do a lot of these experiments.
    We need to have a clearinghouse of best practices that 
others, employers included, might draw on. This does not have 
to be governmental, but it could certainly be.
    We, on Capitol Hill, might actually consider, aside from 
having a Congressional Budget Office, we might have an entity 
or at least some presence within the CBO of individuals who 
understand how people would actually respond to given 
proposals.
    Do any, or all of those, make sense to you?
    Dr. Asch. Well, thank you for your remarks.
    I think they all make sense to me and one of the lessons 
that, I guess, I have repeatedly learned is that seemingly 
subtle differences in design can make a huge difference in how 
effective a program can be, and how it is perceived, and that 
we ultimately care about the impact of these programs.
    So, I am very much in favor of a greater use of these 
programs, but in addition, greater study of these programs 
because, I think, we need an investment in the science. That 
will help all of us get better at delivering these activities 
not just in healthcare, but in other parts of society.
    Senator Young. Makes a lot of sense.
    I am out of time. Thank you.
    The Chairman. Thank you, Senator Young.
    Senator Murray.
    Senator Murray. Thank you.
    Dr. Roizen, I want to start with you.
    We have heard a lot today about workplace wellness 
programs. As I mentioned, I think it is critically important we 
think about how the investments we make in our communities can 
also play a critical role in making the healthy choice the easy 
choice for our families in this country.
    In my home State of Washington, we have seen a lot of these 
really critical efforts in our schools, for example. We are 
investing in physical education, and healthy food, and beverage 
preparation.
    In our cities and towns, we are working to make the 
environment more accessible to all users: bicycles, 
pedestrians, people of all ages and abilities.
    Our healthcare providers are making it easier to quit 
smoking and taking steps to better support breastfeeding, for 
example.
    Our communities of color are taking strides to ensure 
strong culturally competent programs to promote the health of 
people in my state.
    I wanted to ask you. Do you agree, Ms. Mathis mentioned it, 
in addition to these workplace-based programs, community-based 
efforts where health and wellness are also important?
    Dr. Roizen. The answer is I absolutely agree.
    Your state and your schools are taking a leadership role 
that the rest of the Nation would love to follow and hopefully 
will be able to.
    What I mean by that is when you get kids to be healthy and, 
in fact, influence their parents to be healthy, when you get 
food manufacturers to make foods for large distribution to your 
schools that are healthy, you really get to change the health 
of a whole generation.
    We totally applaud that. We work with that. In fact, I go 
and we have a network of what we call inner and outer ring 
schools around Cleveland. It is very hard to get appropriate 
products for the school lunches, et cetera, and breakfast.
    Your state is taking a lead in that and we thank you.
    Senator Murray. Well, thank you.
    Ms. Mathis, I wanted to ask you. As you well know, a 
Federal District Court recently held that the EEO Commission 
failed to support its rules on wellness programs.
    Those rules said that an employee's decision not to 
participate in a wellness program was voluntary so long as the 
employee did not have to pay a penalty greater than 30 percent 
of the cost of health insurance; in other words, thousands of 
dollars.
    That high of a penalty is a problem for the millions of 
employees and their spouses who do not wish to risk disclosure 
of genetic information or the existence of a disability by 
participating in wellness programs that do collect, of course, 
sensitive health information.
    It is a person's right. It is a right under the ADA. It is 
a right under the Genetic Information Nondiscrimination Act, 
and under HIPAA. Those are, as I said, three laws this 
Committee wrote and I am proud of.
    As you may well know, this Committee met yesterday and 
cleared for the full Senate the Trump Administration's nominees 
to now lead the EEOC. Among other things, those nominees will 
now be responsible for rewriting those wellness rules.
    I wanted to ask you, how should the EEOC set criteria for 
when participation in a wellness program is not voluntary? What 
advice would you give those five Members of the EEOC?
    Ms. Mathis. I think the most important thing for the EEOC 
to remember is that their job is to apply the ADA, and not to 
rewrite it. To try to conform it to another law that also 
applies at the same time, but did not overturn or modify the 
ADA.
    There are many circumstances where two laws apply at the 
same time and one requires additional things beyond what the 
other requires. We have a lot of experience with applying 
multiple laws to the same set of circumstances.
    They already have a framework that they had used for 16 
years under the ADA. They used the same framework to analyze 
what is a voluntary question under GINA in their 2010 
regulations, implementing a parallel provision of GINA allowing 
requests for an employee's genetic information as part of a 
voluntary wellness program.
    I would just point out that that GINA regulation was done 
after the Affordable Care Act. They considered the two laws--
and the fact that the Affordable Care Act had been passed with 
its provisions about wellness programs--and considered those 
consistent.
    That framework was logical. It used the ordinary meaning of 
``voluntary,'' that you cannot require a person to answer or 
penalize a person for not answering a question.
    That is consistent with the dictionary definition of 
``voluntary,'' which is, ``Not impelled by outside influence or 
unconstrained by interference, or without valuable 
consideration.'' Having steep financial incentives, I think, is 
actually the dictionary definition of what is ``not 
voluntary.''
    Having the same kind of framework, the same path that they 
charted for the 2010 GINA regulations to apply also to the ADA, 
which is how they interpreted the ADA before 2016 for many, 
many years to allow wellness programs to have incentives, but 
just not to incentivize or to have significant incentives for 
people turning over health information that is not job-related.
    That, I think, would allow wellness programs to proceed, 
and develop, and use incentives in other ways, and use many 
other strategies to engage people without eroding the civil 
rights of people with disabilities.
    Senator Murray. Thank you very much.
    The Chairman. Thank you, Senator Murray.
    Senator Isakson.

                      Statement of Senator Isakson

    Senator Isakson. Thank you, Senator Alexander.
    Mr. Burd, if I remember correctly, the Safeway program had 
financial incentives for participants, by participation by 
employees.
    Is that right?
    Mr. Burd. I am sorry. Could you repeat the question?
    Senator Isakson. Did the Safeway program have financial 
incentives for the employees for participating in the wellness 
program?
    Mr. Burd. Correct.
    Senator Isakson. What have you found, in your work with 
wellness programs with companies, are the best financial 
incentives to put in place for your wellness program to induce 
more people to participate?
    Mr. Burd. Yes. I think we had extraordinary participation, 
I think, even greater, Michael, than some of the numbers that 
you had. We were 85 percent voluntary for employees, 70 percent 
for spouses.
    I am actually a big fan of both the 1996 HIPAA 
regulations--I thought they were well thought out--and the 
adjustments that were made with the Affordable Care Act. I 
thought those were equally well thought out.
    I do not want the Committee to do is get the impression 
that it is all about incentives. Incentives are, I think, 
necessary, but by themselves, not sufficient.
    In going back to something that David, you had said 
earlier. The ``secret sauce'' at Safeway was creating small 
support groups. We had thousands of groups that came together 
on their own, set goals and objectives, timeframes.
    It might have been exercise goals. It might have been 
weight loss goals. We gave them the tools to accomplish that, 
the tools to attract one another. It really was a driving force 
in this along with CEO leadership.
    I look at Government as being an enabler in this process, 
but I also think there is an opportunity for Government to 
lead.
    I think others have been down here over the years and one 
opportunity to lead is I would love to see the Federal 
Government adopt programs like this for their own employees.
    I actually offered to do this for Secretary Sebelius and 
the 80,000 people at HHS to do it for free. Unfortunately, that 
was about 30 days before she left office, and she was excited 
about that. It is not just about incentives. It is important 
that----
    We employed 10,000 people with disabilities at Safeway out 
185,000 people; 2,000 of them were part of this program. The 
HIPAA regs, when I say they are well thought out, they allow 
for, and frankly require, if the standard that you have set is 
judged to be too difficult that you adopt a different standard, 
and even provide a waiver.
    In our experience--and I would be interested in what you 
have done at the Cleveland Clinic--about 3 to 4 percent would 
reach for and get either a waiver or an alternative standard.
    While we wanted you to get below a 30 BMI, if you had a 45 
BMI and you made 10 percent progress, we gave you the reward. 
At the end of the year when you measured, we gave you a 
reimbursement check and we enjoyed writing those checks. So it 
was all about encouraging wellness.
    If you had co-morbidities, and your physician said, ``Look. 
I would feel better going from 45 to 43.'' We would say, 
``Fine,'' and that is the standard. Then we would change that 
over time, and I am sure the Cleveland Clinic did something 
very similar.
    Senator Isakson. Well, I appreciate the answer because 
being one who has had about every bad habit you could possibly 
have to be a core contributor to your health at one time or 
another, I know that what got me into health programs and 
wellness programs was the desire to change a habit. What kept 
me in them was the reward of that habit changing.
    Mr. Burd. Yes.
    Senator Isakson. I think you said something that is very 
important, and that is if you give the employee or the 
individual the measurements to show improvement and reinforce 
that along the way, you can change what the program is doing to 
induce them to be more healthy to an employee who is more 
healthy.
    Because I know quitting smoking, changing your eating 
habits, exercising regularly, none of those things are easy. 
Everybody likes to talk about them and every New Year's, 
everybody practices them for about 2 days, but then they go 
away because they are hard to do. If you get reinforcement in a 
peer group----
    Mr. Burd. Yes.
    Senator Isakson [continuing]. In a positive way, you can 
really sustain the practice.
    Mr. Burd. If I could just add one more thing, I think that 
I learned this a long time ago in business and it was helpful. 
I had 1,800 stores.
    Rather than just study and hypothesize things, we just did 
it. We did it on scale and then we scaled it up.
    For example, if I wanted to increase the sales of some 
product, I put it in the ad, I would reduce the price, and I 
would put it on an end cap.
    At the end of the day, I did not care which of those three 
contributed most to that. I did all three of them every time I 
wanted to increase the sales by twentyfold. We struck upon 
something over time that worked, and it worked famously, and we 
had no issues with it.
    If you do not know, the health statistics do not go to the 
H.R. department. They do not know what somebody's BMI is. They 
know there is a contribution to premium effect, but they really 
do not know what somebody passed and what somebody failed. We 
did not have any issues in the company and then we ultimately 
begin rolling that out to all the divisions. So our initial 
population was 40,000 Members.
    Senator Isakson. Thank you, Mr. Chairman.
    Let me just conclude with a compliment. Thank you, Dr. 
Roizen, for your reference to what the Finance Committee was 
doing. We have, in fact, now done at the Chronic Care Working 
Group bill has actually passed the Senate Finance Committee, 
and it has passed the Senate, and it s pending now in the 
Energy Committee in the house.
    We are close to getting that 3 year effort done and I 
appreciate your reference to that.
    Dr. Roizen. Let me make another comment. I think a couple 
of things he said deserve reemphasis.
    One is there is an absolute firewall between the health 
plan and the company. They do not know why the premiums are 
where they are, or what is driving, or not driving it.
    Second, for every person, they interact with their primary 
care physician in achieving those goals, those six goals plus 
two behaviors. It is the primary care physician, and they set a 
goal, and set a progress, and it is that relationship and that 
progress that determines their incentive.
    It is a culture change. It is multiple programs that work. 
It is leadership as well. We also have a large buddy system 
that we set up that really does the support system.
    There are a lot of things that I did not get into the nuts 
and bolts, but it is a lot of things that work.
    The Chairman. Thank you, Senator Isakson.
    Senator Franken.

                      Statement of Senator Franken

    Senator Franken. Thank you, Mr. Chairman, and to the 
Ranking Member, for holding this important hearing.
    Before the hearing started, I spoke to all of you about 
housing. These wellness programs that the employer runs are 
very helpful, but what we are trying to do is to help people be 
healthy, and lower the costs of their healthcare in the long 
run.
    Ms. Mathis, you pointed out research that shows a strong 
connection between a person's health and stable housing despite 
the fact that they are actually very often talked about as 
completely separate issues.
    In Minnesota, Hennepin Health, an accountable care 
organization in the Twin Cities, saw the lack of stable housing 
was a major barrier to improving the health of their Members. 
So they decided to develop a program that paired healthcare, 
housing, and social services.
    Just 1 year after participants in the program were placed 
in supportive housing, Hennepin Health saw significant 
reductions in participant hospitalizations, and psychiatric 
care, and imprisonment or going to jail.
    The No. 1 cure for homelessness turns out to be a home. If 
you can wraparound supportive services, it yields amazing 
savings.
    I brought this up to all of you. So Ms. Mathis and all of 
you, could you speak to how a focus on housing, particularly 
when it is paired with social supports, can lower healthcare 
costs and improve health outcomes?
    Ms. Mathis. I think that is absolutely right. That is, I 
think, a recognition that has become increasingly prevalent in 
state mental health service systems.
    Maybe 20, 25 years ago, state mental health directors would 
have said, ``We do not do housing. We are not in the business 
of housing. We do mental health.'' That has changed 
dramatically.
    I think now most state mental health authorities would tell 
you, ``We do housing because housing is a critical part of what 
we do.'' Housing supports, housing subsidies, housing 
assistance, housing locator assistance, all of that because all 
of these things--housing stability, work, all the social 
determinants of health--have been shown to have an enormous 
impact on people's health.
    There have been many studies done. I think some of the 
interesting ones have been studies of people who are homeless 
versus people who are in supportive housing, similar twin 
studies of people in those two situations.
    It costs us as much money to keep people homeless as it 
does to have them stably housed with services.
    Senator Franken. I want to hear from the others as well 
because you all seemed to respond when I brought this up.
    Dr. Asch. Senator Franken, thanks for the question and 
comment.
    I fully agree. There is certainly a movement and a 
knowledge base called Housing First that recognizes the 
critical, central actually, fundamental importance of housing 
for those without it.
    I would probably embed your question in a much larger set 
of issues that reflect the importance of the social 
determinants of health.
    If you are a provider organization, a hospital or a health 
system, and you face patients who are chronically ill, and they 
are readmitted into your hospital multiple times for congestive 
heart failure, or lung disease, or some chronic illness, almost 
always the major determinant, in addition to their serious 
illness that brings them back to the hospital, is some form of 
social circumstance. Sometimes it is inadequate housing. 
Sometimes it is another form of social support.
    At the time when hospitals were incentivized only to 
deliver healthcare, those considerations were, at least from a 
financial perspective, less relevant. Now hospitals and health 
systems are much more aware of their responsibility to be part 
of the solution to the social factors that affect health 
including housing. Some of the most progressive health systems 
are targeting housing directly along with other social 
determinants.
    Those social determinants were always there and now we need 
to think about financial incentives that will allow, at the 
organizational level, the resources that we have in our society 
to address them.
    The Chairman. I want to give the other two witnesses a 
chance to answer Senator Franken's question, but I want to stay 
pretty close to the time because we have votes at 11:45.
    Dr. Roizen. Well, some would say, Senator Franken, you are 
a genius for bringing this up.
    Senator Franken. Thank you, thank you.
    Senator Bennet. Only Senator Franken might say that.
    [Laughter.]
    Dr. Roizen. Because it is really one of the social 
determinants, and the social determinants are really important.
    It is very hard to not have stress if you do not have a 
home. It is very hard to get adequate sleep without housing, 
and those are really key points in getting well, and in staying 
well, and in lowering the costs of medical care.
    Mr. Burd. First of all, I wanted you to know that if he had 
not said you were a genius, I was ready to weigh in on that.
    Senator Franken. I was ready to do it as well.
    [Laughter.]
    Mr. Burd. My wife and I have been involved for several 
years in a philanthropic effort to provide housing to the 
homeless.
    I am also involved in another philanthropic effort with a 
good friend where we take people who had been homeless and had 
the capability to learn a skill. They are taught the skill and 
then we find them a job, and they can succeed at that.
    I think having a home is really important, and that social 
environment that surrounds it is also something that we create.
    Senator Franken. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Franken.
    We will go to Senator Casey.

                       Statement of Senator Casey

    Senator Casey. Thanks, Mr. Chairman.
    I want to thank the panel for being here and for your 
testimony on these important issues. I will direct, I think, 
most of my question time to both Dr. Asch and Ms. Mathis.
    I wanted to say first, Dr. Asch, we are grateful you are 
here and grateful for the work you do at Penn. I guess you have 
done work at both the Perelman School of Medicine and at 
Wharton. I also want to thank you for the work you have done at 
the V.A. Medical Center in Philadelphia as well; critically 
important work.
    I was not here for Senator Murray's questions, but I 
believe she asked a question about the penalties and the 
incentives.
    Am I right about that?
    Senator Murray. Yes.
    Senator Casey. I just wanted to make sure.
    I guess my follow-up to that line of questioning would be 
with regard to you, Dr. Asch, that your research indicates the 
penalty incentives may not have had the effect on individual 
behaviors.
    Both you and Dr. Roizen have indicated the importance of 
the many hours, I guess 5,000 hours, of waking activity when we 
are not interacting with the healthcare system.
    Senator Murray indicated that some wellness plans use both 
penalties and rewards that can be as high as thousands of 
dollars a year.
    We have heard that Dr. Roizen's program uses a 30 percent 
penalty, the limit that the EEOC has set when issued the rule 
last year.
    My question is basically this.
    Based upon your research, and other behavioral economic 
research, is it necessary to use such large penalties or 
rewards, and if not, what would you recommend such rewards or 
penalties to be?
    Dr. Asch. Well, thank you for your question, Senator Casey.
    You have identified some critical issues at the interface 
of effectiveness and voluntariness right there.
    A lot of employers are under, what I would consider to be, 
the mistaken impression that the way to make incentives 
effective is to make them larger and larger. That naturally 
leads to very large incentives, putting large amounts of money 
at risk, whether they are in the form of rewards or penalties.
    We have heard, of course, that penalties are more off-
putting than rewards, and actually sort of jacked up the 
concerns about the lack of voluntariness. I think it is 
potentially a mistake to think that way.
    I actually think that that is old, outdated thinking that 
the only way to increase the potency of an incentive is to 
increase the size of an incentive.
    Instead, we know from years of research now in behavioral 
economics that the way we design incentives probably has much 
more of an impact than the amount of an incentive.
    You can imagine, for example, a $500 incentive that might 
be bundled into someone's paycheck. Well, if they are paid once 
a week, that is $10 a week. It looks much smaller then. It is 
put alongside all sorts of other elements in a paycheck. It may 
not even be seen. It is directly deposited.
    You can imagine handing someone two crisp $100 dollar 
bills, a much smaller incentive, and have it be much more 
potent emotionally.
    Another mistake that employers make often, but they do not 
need to make, is setting explicit targets for goals.
    If you believe that your employees should be at a BMI of 
25, which is, let us say, the upper limit of normal and you set 
that as the goal, that is a good way to make people whose BMI 
is 26 lose a few pounds. If your BMI is 40, that is a 
demoralizing goal.
    What we care about is improvement, and pay for improvement 
programs are going to be far more effective for the people who 
we fundamentally need to help the most.
    Both design elements with the structure of incentives, and 
design elements wit the targets for incentives can be improved 
by most employers. I am really optimistic that they can do 
that.
    Senator Casey. Thank you. I have more to pursue there, but 
I want to move to a separate line of questioning.
    Ms. Mathis, I will start with you and I will invite others 
to answer as well.
    The written testimony you have regarding balancing the 
personal rights of individuals, especially those with 
disabilities, while also pursuing the goal or encouraging 
wellness, your references to the privacy protections in the 
Americans with Disabilities Act, and other statutes, are 
critically appreciated, I think, at this time.
    We know that October is National Disability Employment 
Awareness Month. As you have pointed out in your testimony, the 
employment rate for those with disabilities is very low in 
comparison to the general population.
    Those with disabilities have the lowest rate of employment 
of any sector of our population and I am concerned that 
aggressive wellness programs could not only discriminate 
against a person with a disability, but also create a workplace 
climate that does not value people with disabilities.
    Would you like to comment on that further?
    Ms. Mathis. Sure. I should just clarify that I think our 
primary concern about the large financial incentives is around 
those privacy protections.
    Folks have talked about the incentives for outcomes. As Mr. 
Burd mentioned, there are built-in safeguards in the Affordable 
Care Act that, I think, do address that concern. That if you 
cannot meet a particular health outcome because of a 
disability, that you are supposed to get a reasonable 
alternative standard and there are regulations that sort of 
implement that.
    I do not think that, certainly, we have not heard that 
there is a lot of, that that is a major concern anymore. I 
think that was addressed. Our concern is really much more 
around the privacy issues.
    It is true that, I think, there are in many cases, the 
information will not go directly to an employer. Sometimes it 
will if the employer does directly run a wellness program. With 
small employers, obviously, it is not that hard to figure out 
who has what health condition that is identified in aggregate 
data.
    Frankly, I think for many people with disabilities just 
having to turn over your sensitive, private health information, 
wherever it is going to go to, is concerning. It is not the way 
to build an environment of trust and a productive working 
environment.
    People with disabilities have had, in many cases, many 
negative experiences in their lives stemming from the 
disclosure of those disabilities. It is very understandable why 
people react.
    The Chairman. We need to try to stay within the time.
    Ms. Mathis. That is all I have to say.
    Senator Casey. Thanks very much.
    I will do some follow-ups in writing.
    Thank you.
    The Chairman. Well, thank you, Senator Casey.
    Senator Cassidy.

                      Statement of Senator Cassidy

    Senator Cassidy. Dr. Asch, I am internist, as you, and 
although this is a health Committee, which is not Medicaid and 
Medicare, nonetheless I feel as if that which we are doing in 
the employer based setting has a fairly mature science.
    As I think of my patients, whom I used to care for in the 
Louisiana public hospital system, the Medicaid patient or the 
uninsured, it is a bigger problem, if you will, some of these 
wellness issues. If you are in Philadelphia, you probably have 
a practice that is somewhat similar to mine.
    How can we translate some of this, which we have been 
discussing for the workplace, into the Medicaid population, 
which statistically has a higher incidence of chronic disease, 
morbidity, et cetera, than the workplace?
    Dr. Asch. Well, thanks for the question, Senator Cassidy.
    I think in most cases, these activities can translate. I do 
think that employers have a special role and a special trust 
connection with employees that may be not as high as the trust 
relationship people have with their doctor or with their 
hospital, but might be potentially higher than people have with 
their insurance carrier.
    That trust is an important determinant of the success of 
the programs.
    Senator Cassidy. Now, let me ask you. Let me stop you for a 
second.
    Dr. Asch. Yes.
    Senator Cassidy. Because as I think of my Medicaid patient, 
there is a structure associated with an employer relationship 
and that structure allows them to give you 30 minutes off to go 
walk around the track if they have built one there.
    Medicaid patients taking public transportation to their 
clinic appointment are cigarette smoking and there is nothing 
you can do on their Medicaid to incentivize them to stop 
smoking.
    I guess I am not seeing that it is as easily translated--
and, by the way, I am willing to open this up to anybody--
because to me, it actually seems almost an apple and an orange.
    Dr. Asch. Well, so, we have run some programs that were 
employer-based that were designed to reduce the burden of 
tobacco on employees.
    We did two studies, one at General Electric and one at CVS. 
Both were highly successful interventions, published in the 
``New England Journal of Medicine,'' and later adopted by those 
two companies. They reflected largely positive financial 
incentives delivered to workers to help them reduce the burden 
of tobacco.
    There is no reason why programs like that could not also be 
introduced into the Medicaid population. They are incentive-
based. They were successful. We can think of translating some 
of the science and the learning that we have developed from the 
employer setting----
    Senator Cassidy. Now, let me stop you because, again, you 
would be familiar with the structure of Medicaid, which if it 
is managed care, they contract with a provider to provide a 
service at a certain rate. If it is fee for service, you are 
just paying the bills as they come in. Typically, the patient 
is not directly impacted by this.
    The Indiana experiment may be a little bit different, in 
which they prefunded health savings accounts. You could build 
in an award for that. So are you thinking in----
    When you say build in an incentive, and again, I open this 
to anyone, how would you do that for the Medicaid as commonly 
structured under the ACA or any other program?
    Dr. Asch. Well, I am not sure I would know how to do it as 
it is commonly structured, but it does not mean that it could 
not be rethought, and that State Medicaid agencies might think 
about waivers, or the like, that would enable them to engage in 
those kinds of activities in order to achieve their mission.
    I am not sure that they can do exactly what I just 
described under the rules as they are now, but under changed 
rules, they might be able to.
    Senator Cassidy. So the state could apply for a waiver 
asking for the flexibility to incentivize this sort of 
behavior, trying to translate that which you have successfully 
shown works for an employer, but to do it for the Medicaid 
population.
    Dr. Asch. Yes.
    Dr. Roizen. I totally agree with that.
    Senator Cassidy. Would you elaborate or accept just to 
agree?
    Dr. Roizen. Well, I do not want to take too much time, but 
basically it is how do you get both programs that work, 
leadership and incentives, into the Medicaid program? Obviously 
Indiana, and even Ohio, are doing major efforts to do that, and 
seem to be succeeding.
    Senator Cassidy. So the prefunded Health Savings Accounts 
of the Indiana experiment really seem to be quite novel, but 
also quite effective. Folks who put in a little bit of money, 
got a lot more put into their HSA, and that seemed to modify 
behavior.
    Is that what you are thinking of, along those lines, or 
something even more so?
    Dr. Roizen. No, thinking about that along those lines and 
there are other ways of doing that as well, but that works.
    Senator Cassidy. What about things such as obesity? 
Cigarette smoking seems almost more tractable, if you will, 
than obesity, which is more intractable, it seems.
    Dr. Roizen. Well, one of the things is, again, a culture 
program and multiple programs. So if one program does not work 
for everyone, we have, in fact, ten weight management programs 
at the Cleveland Clinic that 62 percent of participants have 
the choice of participating in. Weight Watchers may work for a 
group, and Curves may work for a group, and our own E-Coaching 
program works for a group.
    When you get ten programs together, you can find programs 
that people can adopt, and in buddy systems, and in groups, if 
you will, participate and succeed.
    Senator Cassidy. So this might be a program employed by the 
Medicaid Managed Care program----
    Dr. Roizen. Exactly.
    Senator Cassidy [continuing]. To lower their overall cost 
burden.
    Dr. Roizen. Exactly.
    Senator Cassidy. I thank you.
    I yield back.
    The Chairman. Thank you, Senator Cassidy.
    Senator Bennet.

                      Statement of Senator Bennet

    Senator Bennet. Thank you, Mr. Chairman.
    I would like to start by thanking you and the Ranking 
Member for your work, and your bipartisan effort to fix the 
healthcare system that we have.
    On behalf of the people of Colorado, who have been waiting 
forever, it seems, for a bipartisan effort here, I want to 
express their gratitude to you for the work that you have done. 
My hope is that the Senate, and the house, and the President 
will work together to deal with an issue that confronts us 
right now with respect to the CSR's.
    As you pointed out, Mr. Chairman, this is a cherished 6 
percent of the people that are insured, but it is only 6 
percent of the people that are insured.
    This hearing really is about what we need to get after, 
which is the rising cost of healthcare in this country. I thank 
you for that as well. Whatever any of us can do to help your 
efforts, I hope you will let us know.
    Dr. Roizen, could you describe briefly the bill that you 
mentioned in your testimony that Senator Portman and Senator 
Wyden are working on in the Finance Committee?
    Dr. Roizen. It basically allows Medicare to incentivize and 
to do the same type of thing that we do for our employees: 
offer programs, offer incentives to get there, work with the 
primary care physicians to set the trajectory to improve and to 
get to the goals.
    If you did that, if the Cleveland Clinic dollar number and 
participation number goes to Medicare--and remember, Medicare, 
0.6 percent of Medicare achieves even four of the six behaviors 
and standards--if we did much more of that and got the 62 
percent participation and 44-or-so percent success at getting 
to goal, the Government would save over $500 billion, maybe 
$1.2 trillion.
    One of the things we have learned is putting stress 
management in first, even for the Medicare population, is 
really important at getting change.
    We think this is an enormous opportunity, and Senators 
Portman and Wyden are working on this.
    Senator Bennet. The reason that we are here today in this 
Committee is not about Medicare and Medicaid, but the 178 
million Americans who are privately insured through their 
employer who could also benefit from the kind of incentive 
structures that you and Mr. Burd have put into place.
    Dr. Roizen. Other parts of the program. It is not just 
incentive. It is some leadership. It is some cultural change. 
It is programs that help them. It literally changes the way 
they relate to their primary care physician.
    There has to be some insurance rule changes that this 
Committee could work on to be able to allow the small, non-
self-insured corporation to do this in a way that allows the 
employee to take the benefit as they go from one company to 
another. That allows the company to benefit after they have 
gotten the person healthier.
    There need to be some rule changes, but those are minor and 
there would not be a dollar spent. Not a Federal dollar needs 
to be spent in advance or there is not an ask-for-money from 
the Federal Government at all. It just a rule change.
    Senator Bennet. Mr. Burd, it is nice to see you again. I 
want to thank you for your leadership over many years in this 
area.
    This is going to sound a little bit off base, but I just 
cannot resist because of what your job used to be. The question 
that I have for you is what you learned about what we are 
eating in this country in that job and how that is connected to 
health and how it is changing, if it is changing?
    Mr. Burd. Well, I think increasingly the population is 
becoming more health conscious. I employee a number of 
Millennials these days and they are particularly careful about 
their nutrition.
    When you run a supermarket chain, and you have 45,000 stock 
keeping units, you have all kinds of products in there. I am a 
big believer in free choice, but only if you also suffer 
consequences of that free choice.
    All of us should be able to enjoy a French fry now and 
then, but I think those of us that are really into nutrition 
and fitness understand that if we indulge, we have another half 
hour to spend on the treadmill or walk after dinner.
    One of the things that I wanted to mention about improving 
health, in particular when you work on BMI, I find that the 
Safeway number is extraordinary. The reason we started at 28 
percent BMI is because all of the people, they are on their 
feet all day. We are not doing that here. We could have had a 
stand up meeting and gotten healthier.
    The point is that when people just diet, and I think 
everybody here would agree, it does not work. The reason it 
does not work, if I lose 20 pounds and all I did was diet, for 
every pound I lost, I lost a quarter pound of muscle. Muscle is 
more efficient at burning calories.
    When you finish that diet and you go back to your old 
eating habits or maybe even refined eating habits, you cannot 
eat as much in terms of calories because your burn rate has 
slowed down.
    When I talk about an ecosystem at Safeway that we created, 
we stressed the importance of cardiovascular workouts. We 
stressed strength training. You can, at the age of 60, have the 
burn rate of somebody in their late 20's if you will do 
resistance training.
    I contend it is the secret to weight maintenance. I would 
be shocked if you do not do resistance training.
    Dr. Roizen. I do.
    Mr. Burd. Okay. Thank you.
    Senator Bennet. Thank you.
    The Chairman. Thank you, Mr. Burd, and our next wellness 
hearing will be a stand up hearing. We will see what happens.
    [Laughter.]
    Mr. Burd. Very good. Even if we just stand up once during 
the hearing, it helps.
    The Chairman. That is true.
    Senator Warren.

                      Statement of Senator Warren

    Senator Warren. Thank you, Mr. Chairman.
    I want to see if I can just ask some more questions along 
this line.
    We all know that the Affordable Care Act allows employers 
to offer financial incentives to their employees in order to 
encourage participation in these programs.
    One thing the ACA does not do is eliminate the protections 
already in Federal law for employers, so that they cannot 
discriminate against their employees on the basis of genetic 
information, health status, or disability.
    These protections were put in place by two very important 
pieces of legislation, the Americans with Disabilities Act and 
the Genetic Information Nondiscrimination Act, or GINA.
    This was a bipartisan bill. Senator Ted Kennedy worked with 
a number of folks on this Committee. Last year, Senator Enzi 
and I wrote and passed new legislation strengthening GINA 
protections so that personally identifiable genetic information 
collected through Federal research can never be made public.
    In short, our Nation's nondiscrimination laws say that 
employers can collect sensitive medical information from their 
employees only if providing that information is voluntary. 
Meaning, the employee can decide to say no.
    I just want to start by asking Ms. Mathis.
    What types of personal health information do employers 
typically ask for as part of wellness programs?
    Ms. Mathis. I have seen these health risk assessments ask 
about all manner of health and medical information on a variety 
of levels of detail. I can give you some examples.
    Specific cancer diagnoses such as breast cancer, cervical 
cancer, prostate cancer, weight, height, BMI, whether you are 
being treated for depression or bipolar disorder.
    Specifics about your depression such as how many times you 
felt depressed in the last week, whether you had crying spells 
in the last week, how often you felt like people disliked you, 
how often you feel happy.
    Whether you have been diagnosed with heart disease, stroke, 
high blood pressure, high cholesterol, angina, bronchitis, 
COPD, hepatitis B, obesity, high blood sugar, diabetes, or 
sexually transmitted diseases, to name a few.
    Whether you are pregnant, whether you are trying to become 
pregnant, how old you were when you first became pregnant.
    Those are some of the medical things that they ask about; 
lots of other questions about all sorts of other life habits.
    Senator Warren. So this is some really sensitive 
information, and it is supposed to be voluntary to hand it 
over.
    Ms. Mathis. That is right.
    Senator Warren. So let me ask about that.
    Mr. Burd, when you were the CEO at Safeway, you set up a 
wellness program that you called completely voluntary. At the 
same time that families were charged $1,500 more in healthcare 
premiums if they did not participate in the program.
    In fact, I think you said that you thought the penalty was 
not high enough. You lobbied hard to get the limits relaxed. 
The quote is, ``Legislation needs to raise the Federal legal 
limits on the size of these penalties.'' I know that today you 
run a business that designs these kinds of penalties for other 
companies.
    My question is when it costs an employee $1,500 or maybe 
more a year to get healthcare coverage because they do not want 
to have to share this kind of confidential medical information 
with their boss or because they cannot pass a biometric test, I 
do not understand how that connects, then, with the rules on 
discrimination. It sounds a lot like discrimination.
    Mr. Burd. Well, we have been tested on that numerous times 
and were never accused of discrimination during the 10-year 
life of the program.
    What you are referring to about my desire to raise those 
limitations that were in HIPAA, HIPAA originally in 1996 
allowed a 20 percent premium differential based on behavior. If 
you look at something like smoking, the impact that smoking 
would have----Toby Cosgrove used to say that smoking alone 
would cost about $3,000 more.
    I did not say in my direct testimony, but I will say now 
that in our experience, about two-thirds, on average, two-
thirds of that comes immediately back to the employees as a 
reward for making those standards.
    It is not like they were charged $1,500. The $1,500 one, 
that would be if there was a spouse and an employee. So we 
think that we----I was questioned by the EEOC, I was questioned 
by the Labor Department. At the end of a 45 minute interview, I 
was told that I had properly followed the letter and the spirit 
of the law. We had not been accused of discrimination during 
that time period.
    The person that was interviewing me actually wrote the 
HIPAA regs in 1996, or had a role in that, and said that if I 
ever opened up a Washington, DC office, they would love come to 
work for me.
    Senator Warren. Well, I am glad that is the case, and I am 
now over time. So I want to be respectful of the time here.
    I have to say when you charge differentially, $1,500 or 
sometimes more, and that can happen because people do not want 
to reveal very sensitive, personal medical information. That is 
a penalty.
    Paying a penalty may be legally all right, although as I 
understand it, the courts have now said that the EEOC is going 
to have to go back to the drawing board on the latest iteration 
of what the rules are.
    We have not repealed our laws on discrimination and I just 
want to raise the issue that I think the question about what 
constitutes voluntary on this kind of sensitive information is 
one that we have also got to keep on the table, and maybe do 
some pushing in the other direction as well.
    I apologize for going over, Mr. Chairman.
    Dr. Roizen. May I make a quick comment?
    This information is not revealed with a company. It is 
revealed with the health plan. There is an absolute firewall 
between the health plan and the company. In fact, we fire 
people who break that health plan because we have a tracking 
system. Every other health plan I know has a tracking system. 
If you break that firewall, you get fired.
    Senator Warren. Now, Dr. Roizen, all I want to say is what 
the law says is that the revealing of information has to be 
voluntary.
    Dr. Roizen. It is, but it is voluntary with the health 
plan.
    Senator Warren. Telling people it will cost you $1,500 if 
you do not reveal very sensitive medical information, I think, 
stretches the bounds of what constitutes voluntary.
    Thank you, Mr. Chairman.
    The Chairman. Thanks, Senator Warren.
    Let me pursue that a little bit because my interest in this 
hearing, while there are several possibilities, is to take this 
remarkable consensus we have, and the Cleveland Clinic is 
certainly not the only one to suggest it. The Mayo Clinic says 
the same. Lots of people say it.
    There are relatively few things that we could do that 
dramatically affect, about lifestyle, that dramatically affect 
chronic disease. Chronic disease is 84 percent of our 
healthcare costs and then we are talking about hundreds of 
billions of dollars to make a difference.
    Then you go to the obvious point, and Mr. Burd has pointed 
out, it is not only wellness that you look at when you are 
looking at an employer plan, but insurance is clearly an 
obvious opportunity to take wellness and use employer insurance 
as a method of helping 178 million Americans have an 
opportunity to be healthier and save a lot of money for the 
country at the same time.
    Mr. Burd and Dr. Roizen, how big a problem has it been for 
you in your employer plans to successfully deal with the 
concerns that Ms. Mathis has talked about, and that Senator 
Warren talked about, and that others have asked about? Is that 
a major impediment or do you think you can deal with those and 
treat employees fairly?
    Dr. Roizen. We deal with it. We have 1,000 roughly 
exceptions requested by physicians who say, ``This person, no 
matter what we do with them, cannot get to that normal.'' Those 
are accepted and they get a different plan.
    In fact, in some of the extreme examples, someone just 
counts the amount of water they drink, bottles or glasses of 
water they drink a day to hit the health plan target and get 
the premium reduction.
    The Chairman. So to get a premium reduction, you have the 
opportunity to say, ``I need a different standard.''
    Dr. Roizen. The primary care physician.
    The Chairman. Or, ``I need an exception.''
    Dr. Roizen. That is exactly right.
    The Chairman. That you, therefore, try to provide a fair 
process to meet that objective.
    Ms. Mathis, does that work? I think I heard you say it 
probably did, that you were more concerned about the privacy.
    Ms. Mathis. Right. That is not the primary concern that we 
have. The primary concern is the incentive for disclosure of 
information.
    The Chairman. Right.
    Mr. Burd, what would your comment be on the kinds of 
impediment? Actually, you have talked some about it, but the 
reward or penalty for a healthier lifestyle.
    Mr. Burd. Sure.
    The Chairman. Has that been a problem for you?
    Mr. Burd. I would say it has not been a problem and just 
consider the fact that 85 percent of the people did opt-in.
    One of the reasons why I think we had such a high 
participation rate is I put enormous effort into communicating 
why this was a good idea. I reported my public earnings 
quarterly in a town hall meeting and in a broadcast, and I 
reported on the health of the organization.
    People would catch me individually and ask me some 
questions about it, and when they really understood it, they 
quickly opted-in to the program because to Michael's point, 
there is a firewall there.
    When you have a premium differential, you are just risk-
adjusting the premium for individuals, but then giving them an 
opportunity to change their risk profile. We do that in life 
insurance, and we do that in automobile insurance, and behavior 
really matters.
    What I would like the Committee to really focus on is that 
we have two practitioners here, maybe three, and there are very 
few people, I would say less than 1 percent of the companies in 
this Nation that have turned back obesity, that have improved 
the results on blood pressure, and cholesterol, and smoking.
    These programs--and Michael and I have not had a chance to 
put them out in all of their glory--they work and nothing else 
has. I mean, a 21 percent obesity rate versus a Nation now 
close to 40.
    The Chairman. Thank you, Mr. Burd. We are close to the time 
that we are going to be voting in a few minutes.
    Dr. Asch, I would assume based on your behavioral research 
that if we wanted to incentivize United State Senators to pass 
an appropriation bill on time, that you would subtract from our 
salary instead of giving us a bonus.
    Dr. Asch. Maybe so, but I think you all deserve a raise.
    The Chairman. Well, thank you for that.
    [Laughter.]
    Senator Murray. Take it under advisement.
    The Chairman. Yes, take it under advisement.
    Senator Murray, do you have additional questions?
    Senator Murray. I do not. I know that Senator Franken, I 
think, had an additional question.
    Senator Franken. Yes.
    Senator Murray. Correct.
    I will just say--I know we are getting close to votes and 
we need to go--this has been a really good hearing, and we have 
a lot of work making sure we do this right.
    I think it is critically important and, of course, 
balancing workers' civil rights and privacy. This has been a 
really important hearing and I appreciate everybody being here.
    The Chairman. Thank you, Senator.
    Senator Franken.
    Senator Franken. Thank you, again, both for this hearing.
    It is very refreshing to be talking about keeping people 
healthy, and having a healthcare discussion that is not all 
about structures of insurance, although this has something to 
do with that.
    I do want to talk about the National Diabetes Prevention 
program, which has been very successful. Before that, I just 
want to return one thing on the housing, which is on the opioid 
crisis.
    I had a visit yesterday from Bois Forte, which is a band of 
Ojibwe in Minnesota. In Minnesota, we have just had an 
explosion in opioid use by, especially in Indian country. In 
Indian country, housing is an enormous issue.
    As we go into this opioid, as it is being declared a crisis 
and an emergency, I would really like to see a pilot program 
where people who come back for treatment, especially in Indian 
country, have a place to go.
    I was in Rochester, Minnesota a couple of breaks ago. We 
did an opioid roundtable and a woman whose daughter died, she 
had gotten treatment, got sober, but she went back with her old 
crowd, and she was gone.
    We just need, I believe, to give people the opportunity to 
go to sober living facilities that are good sober living 
facilities. There is probably a distinction to be made here.
    I would love to be able to pilot a program in Minnesota. I 
would love to do it in Minnesota where we actually, this is 
national, as bad as it could be in Minnesota in Indian country 
because there are housing shortages there where people coming 
back from rehab can go into a sober living setting.
    They have secure housing, and that they have people that 
are in their same boat, and in recovery. Instead of a peer 
group, which is the other--a peer group that has a high drug 
use--they are having a peer group of people in their own 
fellowship.
    That is just something I want to bring up.
    Yes.
    Mr. Burd. Senator, just to elaborate on what I said 
earlier, that is exactly what we do in this philanthropic 
effort. In other words, they have to be sober before they come 
in. They get tested while they are in that safe environment.
    Senator Franken. They have to be tested.
    Mr. Burd. They get constantly reinforced. The program 
works. So if there is a way to expand that, I think it has 
great value.
    Senator Franken. Now on the National Diabetes Prevention 
program, this is something that Senator Lugar and I put in the 
ACA. Senator Grassley and Senator Collins have been very 
helpful in getting CMS to do, the Medicare.
    What we learned is that this is a 16-week program and was 
piloted at the YMCA in St. Paul and in Indianapolis. This is by 
NIH and CDC. This is why it was me and Senator Lugar who put it 
in.
    What it turned out that it is 16 weeks of both nutritional 
training and exercise. After 5 years, this is people who have 
high levels of sugar in their blood, glucose, and they were 58 
percent less likely after 5 years to become diabetic, 70 
percent less likely, if they were over sixty, which is why CMS 
is now in the process of implementing this.
    So that any one in Medicare who wants to get the diabetes 
prevention program will be able to take this 16 week program 
and have it paid for by Medicare.
    Can anyone speak to why this has been successful?
    The Chairman. We have about 20 seconds.
    Dr. Roizen. You get behavioral change, which is consistent. 
You also get buddy, it is a group, so you get buddy support. 
You get everything that a wellness program should be and you 
are targeting one of the specific high cost things; hemoglobin 
A1c or diabetes.
    It is a great program.
    Dr. Asch. I agree. I think the diabetes prevention program 
is a great example of the importance of behavioral change.
    The fact that this can be done without medication, without 
financial incentives speaks to a strong program and it has 
outcomes that you have mentioned are incredible, and they are 
persistent.
    This, I think, is an incredibly optimistic light at the end 
of the tunnel there.
    Senator Franken. Thank you.
    The Chairman. Thank you, Senator Franken.
    Thanks to the witnesses for coming. I agree with Senator 
Murray, it has been a terrific hearing. We have learned a lot.
    The hearing record will remain open for 10 days. Members 
may submit additional information within that time, if they 
would like.
    The Chairman. The HELP Committee will meet again at 10 a.m. 
on Thursday, October 26 for a hearing entitled, ``Exploring 
Free Speech on College Campuses.''
    Thank you for being here today.
    The Committee will stand adjourned.
    [Whereupon, at 11:43 a.m., the hearing was adjourned.]

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