Boss Wants Me Buff? The Psychology
of Health Incentives


The idea of paying people to stay healthy is not a new one―companies have now been toying with wellness incentives for years. But, as we reported on Monday, a new company called United Preference promises employers a way to track how those payments are spent, and hopefully to prevent them from being used in unhealthy ways. Its platform titled Tailored Spend is a “smart” gift card that can only be used at pre-screened retailers that sell health-promoting products, coupled with analytics that show employers where their incentives are being spent.

Why? Healthy employees probably make a more productive workplace, but the real business case lies in controlling the cost of employee healthcare. The cost to insure the average family has doubled in the past ten years; health benefits have been increasing far faster than wages and inflation for over a decade:

So the idea of paying people for healthy behaviors, in order to avoid costly hospitalizations later down the line, has obvious appeal.

And in certain cases it has worked. Researchers at the University of Pennsylvania led a successful smoking cessation project that issued the following incentives:

The financial incentives were $100 for completion of a smoking-cessation program, $250 for cessation of smoking within 6 months after study enrollment, as confirmed by a biochemical test, and $400 for abstinence for an additional 6 months after the initial cessation.

The financial incentives almost tripled the amount of participants who’d quit smoking for a full year, with improvements sustained even 15-18 months afterward. But smoking is a unique case in which if you’ve quit for a year, your quality of life improves so quickly that you probably won’t go back to your old ways. For things like diet and exercise, it might be easier to relapse into bad habits. In another study on weight loss, they found that financial incentives worked only as long as participants were receiving the incentives―after the incentives stopped, they regained much if not all of what they’d lost.

So what’s at play here? Those two trials were inspired by behavioral economics, which has more to say on the psychology of incentives. Certain studies have shown external incentives to “crowd out” the motivation to do something inherently meaningful and rewarding. One study showed that females’ willingness to donate blood decreased by half when they were offered money in return; interestingly, if they were allowed to donate that payment to charity, their willingness to donate rose back to the original level.

That’s pretty depressing. But there must be ways to motivate health that build on the rewards of good health. Adam Grant, yet another UPenn researcher, has shown that it can actually be more powerful to emphasize the benefits of behavioral changes to others rather than to ourselves. In one, teams posted two different signs promoting handwashing in hospitals: one emphasizing the benefits to patients (“Hand hygiene prevents patients from catching diseases”) and another emphasizing the benefits to the handwashers (“Hand hygiene prevents you from catching diseases”). The one focusing on patients was significantly more effective in promoting handwashing―in fact, the other may not have helped at all (data below):

What if, instead of giving employees rewards for healthy behavior, companies gave rewards to their employees’ spouses? Or, on a more basic level, what if our messaging on health were about less about the selfish reasons for staying healthy and more about the effect of our own health on our loved ones? A recent meta-analysis shows that telling parents to quit smoking for the sake of their children is more effective than simply telling them to quit smoking.

Anyway, it’s clear that the lines among employers, insurers, and healthcare providers are blurring: all are taking a more hands-on approach to health than ever before. Some employers have even refused to hire smokers outright. Perhaps the more people who hold us accountable for our health, the more likely we are to take care of it. I’m both excited and spooked by this trend: while it’s one thing for my friends and family to push me to stay healthy, the idea of my boss doing so is somewhat off-putting. Off-putting and unproven―the founders, Mark and Pamela Hall, don’t cite any clinical evidence that restricting wellness incentives to “healthy” retailers improves health or reduces insurance premiums. You can bring a horse to a yoga mat, but you can’t make it do sun salutations.

And there are cost-effective ways for employers and insurers to promote health without overstepping their traditional bounds. For example, it’s been shown that eliminating copays for certain medications significantly increases individuals’ likelihood of taking them; I imagine the same would apply to a wide range of preventive services, including vaccination. Why not take away the barriers that the system has already created to being healthy, before resorting to workarounds that are at best unproven and at worst, intrusive?

Karan Chhabra is a healthcare researcher who has written extensively on patient decision-making and physician-patient communication. Follow him on Twitter @KRChhabra

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