Kevin Volpp: Pay people cash to stay healthy

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The key to using incentives to get people to go to the gym frequently is to do it long enough to create a healthy habit.

By Kevin Volpp

With the Tony Abbott Government expressing concern about the growing health budget and emphasising personal responsibility, perhaps it's time to consider some creative ways of curbing what Australia spends on ill health.

One solution is to pay people to either get well or avoid becoming unwell in the first instance.

Britain is already doing this kind of thing with a trial of giving mothers from disadvantaged suburbs A$340 ($365) worth of food vouchers for breastfeeding newborn babies. And from January 1 this year, employers in the United States can provide increasingly significant rewards to employees for having better health outcomes, as part of the Affordable Care Act.

But should people really be paid to make healthy choices? Shouldn't they be motivated to improve their health on their own anyway? People don't do what's in their best interest in the long term for many reasons. When making decisions we tend to take mental shortcuts; we allow the desires and distractions of the moment to get in the way of pursuing what's best.

One such "irrationality" is our tendency to focus on the immediate benefits or costs of a situation while undervaluing future consequences. Known as present bias, this is evident every time you hit the snooze button instead of going for a morning jog.

Researchers have found effective incentive programmes can offset present bias by providing rewards that make it more attractive to make the healthy choice in the present.

Research conducted in US workplaces, for instance, found people who were given US$750 ($890) to quit smoking were three times more successful than those who weren't given any incentives.

Even after the incentive was removed for six months, there was still a quit rate ratio of 2.6 between the incentive and control groups - 9.4 per cent of the incentive group stayed cigarette-free versus only 3.6 per cent of the control group.

Still, while research on using financial incentives to encourage healthy behaviours is promising, it isn't as straightforward as doling out cash in exchange for good behaviour.

Standard economic theory posits that the higher the reward, the bigger the impact - but this is only one ingredient in success. Behavioural economics shows that when and how you distribute incentives can determine the success of the programme.

Here are a few basic principles to consider. First, small rewards can have a big impact on behaviour if they're provided frequently and soon after the healthy choice is made. We've found this to be true in the context of weight-loss programmes, medication adherence, and even quitting use of drugs such as cocaine.

Games of chance are an effective way of distributing rewards as research has found people tend to focus on the value of the reward rather than their chance of winning the prize. Many people think that a 0.0001 and a 0.0000001 chance of winning a prize are roughly equivalent even though in reality they are vastly different probabilities.

Finally, people are more influenced by the prospect of losses than gains. Studies show people put much greater weight on losing something than gaining something of a similar value.

In one weight-loss experiment, for instance, participants were asked to place money into a deposit account. If they didn't achieve their weight goals, the money would be forfeited, but if they were successful, the initial deposit would be doubled and theirs to keep.

Reluctant to lose their deposits, participants in the deposit group lost over three times more weight than the control group, who were simply weighed each month.

Incentives are particularly effective at changing one-time behaviours, such as encouraging vaccination or attendance at health screenings. But with increasing rates of obesity and other lifestyle-related diseases, we need to focus on how incentives can be used to achieve habit formation and long-term sustained weight loss.

We know financial incentives can increase gym usage and positively impact weight, waist size and pulse rate but how to sustain gym use after the incentive is removed? The key may be to use incentives to achieve a high frequency of attendance for long enough to create a healthy habit.

We also need to consider how we can leverage social incentives, such as peer support and recognition, together with new technologies to maximise the impact of incentive-based programmes.

Innovative solutions, like paying people to encourage the right health choices, may help to reduce both the health and economic impact of Australia's growing burden of disease.

Kevin Volpp is professor of medicine, Perelman School of Medicine and Health Care Management, Wharton School at the University of Pennsylvania.

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62 Comments

Therecanbeonlyone

- Auckland Region
02:52 pm Tuesday 11 March 2014
No, it's the 'miracle' of the age we live in, nothing is your responsibility and someone else is to blame for all the misfortune that occurs in your life. Many have been brought up with a 'victim' mentality, they are a victim of all the bad choices they have made.

I find it funny that there are many people who expect the government to monitor and control their lives, but only if it's something they want to do. They also make statements like, the government 'must' provide state housing, but only in the area and be the type of house they want to live in. The government 'must' provide healthcare, but doesn't have the right to tell them how to live their life.

Some people prefer to assign their responsibly to someone else, that way they believe they don't have to worry about the consequences of their actions.

Therecanbeonlyone

- Auckland Region
02:52 pm Tuesday 11 March 2014
It is true that American healthcare is user pays and yet they still have the highest rate of obesity in the world. It is also true that many fast food outlets in America have access ramps so the morbidity obese can still ride their mobility scooters in to get their favourite foods.

The fact that healthcare is user pays and they have the highest rate of obesity are non related issues. While I have no issues with someone 'choosing' to eat lots of high fat, high sugar foods because that is the choice they make. I do have an issue with having to pay for the negative health repercussions of their actions. In America an individual is free to choose how they wish to live their life, but they are also aware that they (and them alone) are also responsible for the negative repercussions (higher insurance, shorter lifespan, etc) of those choices.

Maybe a better way is to make the packaging of all high fat, high sugar foods carry pictures and warning of the aftermath of obesity related diseases (just like we have on packets of cigarettes).

Therecanbeonlyone

- Auckland Region
02:52 pm Tuesday 11 March 2014
I too can see the sense in an incentive programme to reduce obesity and the negative health consequence surrounding it. I know someone who's insurance company paid to have their stomach stabled. They are only 25 and the insurer saw the operation as an investment in their health, and a reduction in possible future health related claims.

But I can't see a practical and cost effective way to implement it. Does someone have weekly 'weigh in's' (like the biggest loser show), and if there is a weight loss from the previous week they get the money?. How long is the duration of the programme (4 wks, 3 months, etc)? How many times can someone 'put on weight' before they are ejected from the programme?

I feel that the costs of this type programme would be the same as the costs of the medical care these people who require.

Therecanbeonlyone

- Auckland Region
02:52 pm Tuesday 11 March 2014
Exactly the point, the advertising budgets of Coke, Cadbury's, Mcd's, Lion, etc are considerably more than the total health spending on prevention. According to a National business review story, Coca-Cola Amatil's trading revenue in New Zealand and Fiji rose by 6.5 percent to $A202.2 million. And I wonder what the percentage increase was for those diagnosed with obesity and diabetes related health issues?

Any programme that tries to reduce obesity and diabetes MUST be funded via a 'fat, alcohol and sugar tax'. It is morally wrong for those companies to profit financially from the sale of those 'obesity and diabetes causing' products, but not have to pay for the negative health repercussions. As you state, "prevention is far cheaper then cure". But it is not the role of the taxpayer to subside the profits of these companies by 'picking up the tab' for obesity and diabetes related healthcare.

And before you ask, no, I don't have an issue with how much tax I pay. But I do have an issue with that tax been spent 'fixing an issue' that is clearly the responsibility of those companies that profit from the cause of the 'issue'.

I Said It

- Henderson
02:51 pm Tuesday 11 March 2014
Really easy to make those statements, but in reality, prevention (do you refer to primary or secondary prevention?) is costly compared to providing essential services to those immediately in need. Its also difficult to track upstream outcomes 20-30 years ahead. There is also needs to be the political will to prioritise scant resources and make the best use of funds.

We could be doing alot more upstream primary prevention, but there is also the aging population in sight. And health doesnt need to compete with the company's you have listed, we should be learning a lot more from them (about their adverstising, product formualation etc ) and bringing them into the discussion.

NZer

- New Zealand
02:51 pm Tuesday 11 March 2014
And sportspeople should then bear the cost of sports injuries.

sandkiwi

- Hawke's Bay
02:51 pm Tuesday 11 March 2014
It becomes our affair when our tax dollars are paying for the medical bills that their crappy choices have caused.

Ken Maynard

- New Zealand
02:51 pm Tuesday 11 March 2014
Dr Volpp: a thought.

In the old days, aggregate longevity was often less than 30 years, most people who lived to be 30 had their teeth worn to the gums through grit & sand in natural diets & perhaps suffered from jaw abscesses as well. A pristine natural diet does not seem as healthy as advertised. The numbers worn out from hard work suggest lots of exercise was not that healthy either.

Processed foods first appeared in the UK about 1800, despite health nuts warning against their evils; UK populations increased for 8 million in 1800 to over 30 million by 1900. In the modern world of processed food world populations have grown to 7 billions & aggregate longevity increased.

These numbers hardly support the contention processed food is bad per se.

Primitive natural diets & physical demands were much tougher & unhealthier than advertised. Processed foods added an easily digestible bulk food supply that was reliable, while a quotient of natural food & reduced physical demands ensured a healthy balance from say 1800 - 1980.

People have again become unhealthy in recent times where diets are 100% processed & exercise non-existent due to the conveniences of modern life.

Therecanbeonlyone

- Auckland Region
02:50 pm Tuesday 11 March 2014
I already smoke, but for the right price I'll exercise less and eat more high fat, high sugar foods.

Therecanbeonlyone

- Auckland Region
02:50 pm Tuesday 11 March 2014
Smokers are heavily taxed to pay for smoking related medical care.

So until a tax is introduced to high fat foods, high sugar drink and alcohol, I think treatment for diabetes, obesity and alcohol related health issues should be 'user pays'. If someone wishes to live their life like that, so be it, but they and they alone should have to pay for the consequences.

Casey

- New Zealand
02:50 pm Tuesday 11 March 2014
Perhaps if this country had full employment and a living wage that supported a family, like it used to, then mums could stay home and keep an eye on their teenagers, to avoid them getting pregnant.

Maybe if the national pastime of the well-off wasn't property investment/speculation, families could afford a home and have a bit more security in their lives and more incentive to put up with each other "til death do us part".

(Giving their children and grandchildren more security.)

Maybe if men were paid more than the DPB, young women would have a financial incentive to stick with the fathers of their children rather than shacking up with every Tom, Dick or Harry who comes along.

RoSayer

- New Zealand
02:50 pm Tuesday 11 March 2014
We basically have that concept. It is called social welfare.

Old fashioned and conservative

-
02:50 pm Tuesday 11 March 2014
If a person has a chronic ailment for which there is a specific treatment it probably makes sense to provide the treatment free for the only inconvenience of having to go to a pharmacy. However the wellness prescriptions are for things like gym memberships and fishing trips, not directly related to any specific ailment and can be expensive compared with prescriptions for common medical ailments. In the past the social stigma of being morbidly obese may have discouraged overeating, but now that the condition has become medicalised there may be a need for some other incentive, for example, an economy class seat to the far corners of the earth if ones weight is kept below 140 kg.

pete42

-
03:45 pm Monday 10 March 2014
...until it becomes time for the state funded healthcare to pay for the costs incurred of their choices.

Unless you are suggesting a return to personally funded healthcare?

Peter Ellwood

- Birkenhead
03:45 pm Monday 10 March 2014
No, afraid not, you'll only get a bit back that you've already paid. Peter Dunne would be doing cartwheels with such a scheme's potential to confuse the crap out of everybody and not achieve anything but he's not revenue minister anymore.
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