While Washington and many states continue to debate health care reform, the rest of us can't afford to wait. Rising health care costs are driving up premiums so fast they could almost double for the average family by 2020, according to a recent estimate by the Commonwealth Fund. Insurers need to make progress on cutting costs—and they can do so by following the lead of what some large businesses already do: motivate people to stay healthy. Certain self-insured companies effectively use both financial incentives and information to guide employees to better manage their own health and reduce their need for health care services.

Some of those companies have managed to cap the yearly increases of their health care costs at 5% to 6%, and a few even hold them to 3% or less, even as nationwide health care inflation runs at 8% to 10% a year. The numbers are impressive, but so is the way they're attained—by aligning the self-interest of patients, providers and health plans.

Bain & Co. analyzed more than 125 medical management programs developed by insurers and self-insured companies across the U.S. and some noteworthy patterns emerged. The most effective employers offer incentives for healthy living and motivate chronically ill patients to stick with recommended therapies to keep their diseases in check. PepsiCo employees who smoke pay a penalty of $600 a year (the company also offers a smoking-cessation program), while IBM employees who regularly exercise get cash rewards of $150. At Safeway overweight employees who have high blood pressure and lipids and still continue to smoke pay nearly $800 a year more in health premiums than healthier employees.

Read the full article at Forbes.com