January 13, 2016
Companies have plenty of incentive to care about the health of their workers: it affects productivity, insurance costs and their bottom line. But what incentives can companies use to make workers improve their own health? A new study from the University of Pennsylvania has found that one common incentive — lowering insurance premiums — doesn't work when it comes to helping workers lose weight.
The study, published in this month's Health Affairs journal, recruited 197 people whose average weight was 227 pounds. Their goal: lose five percent of their body weight. Researchers randomly divided the participants into four groups to test out which incentives from their employer encouraged the most weight loss.
Participants in one group got lower insurance premiums, worth $550 per year, starting as soon as they reached their goal. Another group had the same incentive, but the new premiums didn't go into effect until the next coverage year, as often happens in large companies. A third group got to participate in a daily lottery with a cash prize if they reached their goals, and the final group had no financial incentives.
None of the incentive schemes worked — which came as no surprise to researcher Mitesh Patel, who helped conduct the study for Penn's Center for Health Incentives and Behavioral Economics.
"You're asking people to do work now and get rewarded later," he said.
The premium discounts may have been worth a lot over the course of one year, but divide $550 into 26 biweekly payments and it seems like nothing. Make them wait a year to start getting the money, and there's no incentive to lose weight at all.
"People respond more to immediate rewards than rewards in the future ... we care more about what we get today than what we get next year," Patel explained.
A little less than one in five participants did meet their goal, but it didn't matter whether they had a workplace incentive or not; the differences between the groups were statistically insignificant. So why do some companies continue to use incentives that don't work?
"It's within the structure of the existing premiums, it's easy to communicate, and it's just what they'll be doing for a long time — there's been no evidence to guide the design of the incentives," said Dr. Patel.
Well-designed incentive programs are more important than ever because of the Affordable Care Act, aka Obamacare. The ACA allows companies to spend up to 30 percent of their health insurance premiums on health incentive programs, or even up to 50 percent if those programs are aimed at tobacco users.
That's why Patel's main goal is to find out which programs really work, using the principles of behavioral economics. He suggested a tactic that has been successful in a previous weight-loss experiment: a "regret lottery."
In a regret lottery, participants find out if their names were drawn in the lottery, but they only get the prize if they are on track to reaching their goal. People are motivated because they want to win the money, but also because they want to avoid the horrible scenario of finding out that they would have won the money if only they had stuck to their diet.
"We can try to drive people to anticipate the regret of winning the lottery by not achieving the weight goal," said Patel.
Another issue with the set-up is that participants had to weigh themselves in a private room in the office, which some people might find uncomfortable or inconvenient. Companies could instead allow employees to weigh themselves at home, using scales that wirelessly transmit the data to the office.
"The key thing we're looking at is how we can tailor these programs to the lives of individuals," said Patel.
