Make employees succeed by setting achievable goals and reward them simply for staying in the program. Those are the two very basic components of a successful weight management program created by National Jewish Health and put into action by the Public Employees Retirement Association in Colorado.

PERA provides retirement and other benefits to the employees of more than 400 government agencies and public entities in the state of Colorado and covers just over 80,000 retirees. Since retirees pay a portion of health care premiums "we are looking at programs that will make them healthier and therefore have less health care costs for the plan, which leads to lower costs for retirees," says Wendy Tenzyk, insurance director with PERA in Denver.

Just over 1,500 retirees, many of whom had weight-related medical conditions such as type 2 diabetes, coronary heart disease and hypertension, participated in the FitLogix program in 2008.

"We looked at their health claims data from 2007 and pulled out a defined population and followed them through 2008 so we could accurately watch those health claims go down," says Michelle Shockley, national account executive with National Jewish Health.

And go down they did. In 2007, the year prior to the launch of the program, health care costs for the 1,531 participants totaled $28.7 million. For the same period in 2008, the year of the program, health care costs totaled $24.9 million. The total cost of the FitLogix program for those participants was just under $1 million, leading to a return on investment of $2.8 million.

At the heart of the program is the notion that the longer people stay on the program, the more likely it is they'll succeed. After four weeks on the program, participants received a $10 gift card simply for sticking with it.

"You need to reward people. It didn't matter what reward they got. What mattered was that somebody else knew they were doing a good thing and was encouraging them," says Dr. David Tinkelman, medical director with National Jewish Health. "And they don't have to lose one ounce to get that reward. They get the reward just for staying in the program."

Participants were teamed up with coaches from National Jewish's call center, who encouraged the retirees, helped them set goals and answered any questions or concerns. Calls were clustered at the beginning of the program to keep people engaged.

"Whether they're hitting their activity goals or weight loss goals, we don't really care early on," says Shockley. "We know if we keep them on the program for 12 months, they'll lose weight. So we incent them to stay on the program, not to hit their weight loss goals or activity goals."

Big Brother?

Participants were set up with FitLinx monitoring devices - an Acti-Ped that tracked activity levels and an Acti-Scale that tracked weight loss. The third device, the Acti-Link, is an antenna that plugged into participants' computers and downloaded information from the pedometer and scale.

While the monitoring component has shades of Big Brother, data were reported to PERA only in aggregate. And in the experience of National Jewish, self-reported weight loss isn't necessarily accurate. "When we report back to a corporate client, we can tell them exactly how many pounds their population has lost," says Shockley. "It's not self-reported because what we found was self-reported weight loss is, many times, not accurate."

Participants can also log on to a Web site to track their weight loss and daily physical activity levels. The information is also conveyed to the participant's coach, increasing participants' accountability.

"When they enter the program, we find out how many minutes they walk or do any kind of activity and we give them a goal they can succeed on," says Tinkelman. "Whatever their estimate is, we raise it by one minute or maybe two. That's all. So a week later, we've made them succeed and feel good about themselves and feel good about their participation in the program. We don't even introduce food and calories until later."

Over the course of the program, participants are given 52 healthy steps - one per week for 12 months. The 52 steps were written by the psychology department at National Jewish and are designed to create behavior changes over the course of the year. At the end of each step, participants are asked to do something such as read a food label or do an activity with their family.

"You're not going to change someone's behavior in a month," says Shockley. "You really need a year to start to change the approach people take in regards to their weight."

Calorie balance

"There's only one single basic concept we want people to learn and that is calorie balance, which means if you bring in more calories than you burn, you're going to gain weight," says Tinkelman. "If you burn more calories than you take in, you're going to lose weight. We work on very simple things so that at the end of the year, they'll read labels, they'll know when they have to exercise more and they'll know how many calories they burn if they walk, run, rake leaves, dance or do whatever activity they enjoy doing."

PERA was so pleased with the program's results that they are offering it again. Interest was much higher at the organization's open enrollment in October than it was the first year the program was offered.

In addition, the organization has decided to add a second year to the program so participants can continue to stay motivated.

"As we went through our renewal this year with our plan, the experience over the past year was good," says Tenzyk, adding that while PERA is not yet able to fully break down and identify what drove that good experience, "I would certainly expect that a part of it was this program."

In a study released in December 2009, Thomson Reuters Healthcare Analytics confirmed one thing we all know about health care costs: fraud, paperwork, unnecessary care and other forms of waste combine to drain a mindboggling amount of money from the U.S. health care system.

The Thomson study pegs the total at around $700 billion a year - or about one-third of the total U.S. health care spend.

"America's health care system is indeed hemorrhaging billions of dollars," says Robert Kelley, vice president of healthcare analytics at Thomson Reuters.

The good news, however, "is that by attacking waste we can reduce health care costs without adversely affecting the quality of care or access to care," Kelley believes.

He cites inefficient communication, which at $25 billion to $50 billion accounts for up to 6% of medical overspending, as one example. "It is waste when caregivers duplicate tests because results recorded in a patient's record with one provider are not available to another, or when medical staff provides inappropriate treatment because relevant history of previous treatment cannot be accessed," Kelley asserts.

Another example: The average U.S. hospital spends a quarter of its budget on billing and administration, according to the report. Some other items include:* Unnecessary care, including overuse of antibiotics and lab tests to protect against malpractice exposure: between $250 billion and $325 billion a year, or up to 40% of the total.

>> Fraud, including fraudulent Medicare claims and kickbacks for referrals for unnecessary services: between $125 billion and $175 billion a year, as much as 19% of the total.

>> Administrative inefficiency and redundant paperwork: between $100 billion and $150 billion, as much as 17%.

>> Provider errors: between $75 billion and $100 billion, as much as 12%.

>> Preventable conditions like diabetes: between $25 billion and $50 billion, as much as 6%.