What's a simple easy-to-use-and-update fitness indicator

Say that I’m responsible for giving a financial incentive to people who improve their fitness. The aim being to reduce the health-care bill, I will focus on aerobic, cardiovascular fitness. VO2 max is a good measure, however, it’s costly and not suitable for all people. What I’m looking for is a similar test/inicator that is suitable for all people and that could be operated by anyone to know their position.

Do you want a test that outputs a single number directly, or is it possible to make multiple measurements and feed them into a computer that calculates a result? Can the test require equipment, or should it be doable by the people on their own? How long do you want it to take to make a measurement?

VO2 max is a poor indicator. VO2 max is genetically determined and actual gain is relatively small.
World class competitors are born with a higher level than most people can achieve with training.

A time trial or competition is a far better indicator.

A single number that can be obtained with minimal equipment would be great

I see. You drew my attention to an important aspect: “actual gain”.
Would the time it takes the heart to go back to its resting heart-beat per minute after a moderately-intense exercise be reliable?

You could time how long it takes them to run/walk 5 km. The only equipment you need is a stopwatch.

I realize that’s not what you are looking for, but I don’t see how you can measure aerobic / cardiovascular fitness without stressing the cardiovascular system to some extent and measuring its ability.

Yes, recovery time would be a good indicator, as would resting heart rate. The resting heart rate should be taken at a consistent time, usually after waking up in the morning. While a heart rate monitor would be useful for measuring this, though not absolutely required. Both recovery time and resting heart rate should decrease as fitness increases.

Recovery heart rate is dependent on effort.

Resting heart rate should be determined before training is started. There is the possibility for an individual to have an unusually low or high resting heart rate. Same for maximal heart rate.

Maximal heart rate must be determined with an all out effort. There are formulas but there can be a large error particularly in older athletes.
My predicted max (220-(age)57=163. I can still hit the mid 180s.

Another factor. The person should be tested with the same activity they are training in.

So if a number of people of the same age trained well over a long period of time, they should have an approximate recovery time after they have made the same effort (walking on treadmill goint at 7 km/h for instance)? Or at least we could determine a number based on average to be a minimum standard for a healthy lifestyle.

The problem there is that in a large group, there will be a wide range of starting VO2 max (as I mentioned above) and after training there will still be a wide range of VO2 max, just a bit higher.

Testing them all at the same pace will result in a wide range of effort thus affecting recovery heart rate.
7 km/h could be a very easy effort for one person and nearly all out for another.
You would need to test at a specific effort level. As an example, using a heart rate monitor, you could have them work at 75% of max heart rate for 15 minutes and measure recovery.

Why not use a beep test?

My company has a program that, among other options, can sync with your Fitbit data. Every day you exceed x number of steps, you get points, The points translate to money at the end of the year (not a fortune, maybe 100-150 bucks).

We can also earn points for presenting proof of some preventive care (e.g. mammogram, flu shot, and so on).

Neither of these demonstrates improvement, mind you. They also add points if you’re a smoker and take a cessation program, I think.