Employers opportunity 3/3 – The use of incentives

Understanding why people don’t seek better health.

This is part 3 of 3 entries in which we raise questions and look at solutions for every day health mysteries such as why we choose to eat a chocolate bar, not get up early to exercise, not go to the Doctors and generally make poor decisions when it comes to our health. We all do it, some of us more than others, but why?

The first article in this series introduced the health care wedge, which identifies why some of us do not seek external health advice because we are use to not paying for our health. The second article looked at Present Bias, which is why we choose unhealthy behaviours that reward us now, but do not in the long term.

The use of incentives in Wellness programs

Organisations and external providers have been using financial incentives to reward employees for engaging in health & wellness activities for a little while now. Utilising behavioural economic research we know individuals do not behave rationally, even when they are offered rewards for participation to achieve certain health goals. Employees are influenced by a complex interaction of health persuaders and this article will unpack the incentive based model to improve outcomes of health & wellness programs.

Most individuals fail in their weight loss attempts

The majority of those who do loose weight, return back to their original self within 3-5 years. Financial incentives may offer a solution to this, clearly detailing the reward system for participants to sign up, achieve goals and keep the weight off for long periods of time. This also goes some way to address present bias, immediately rewarding an individual for choosing a healthy behavior. But life is not that easy…

 

There are many different incentive methods, and we will look at 3 popular models. Each organisation has different reasons for undertaking their own method based on the outcomes desired, demograph of participants and budget of the program. Safe & Healthy will look at financial rewards for signing up to a program, for staying in a program, and also achieving certain health goals.

Program 1: Sign up fee

A simple incentive model where participants in the program are offered an incentive based on their attendance to the program. This can be an immediate reward, can be paid at the end of the program, or can be based on a lottery system for all participants.

Eg: All participants in the program go into the draw to win X

Program 2: Bond System

A deposit contract model that also incorporates a behavioural economic theory called Loss aversion. Particiapnts pay a monthly fee of $9.95 for the program, at the end of the program, if they stick with it, all monies are returned and a bonus of $100 is given to the participant.

Loss aversion plays on the fact that humans do not like loosing money. Funny enough right, but we actually hate loosing money more than we like winning money so this deposit contract will hopefully lure participants to stay in the program for longer periods of time and achieve better results.

Program 3: Goal orientated

Participants sign up to a program for free, and set some health goals. Participants are rewarded regularly for achieving milestones along their journey to improve health.

Eg: Participant X is 120kg and has a goal weight of 100kg. Each quarter weight is measured onsite and the participant receives a bonus paid as a % of weight loss each.

 

Which incentive model is the best for me?

First question is, whats your budget?

  1. is usually the cheapest
  2. usually costs a little more
  3. you can build a unique blend of incentives to match a budget

What do you want to achieve?

  1. delivers Education & Awareness about conditions very well such as Get Back to Life campaigns and quit Smoking programs
  2. is great for broad adoption programs such as Sleep & Fatigue management
  3. is used to deliver targeted programs to high risk individuals such as Mental Health and Type II Diabetes

Who will manage the Program?

  1. Usually used when managed onsite with program leader
  2. & 3. Are delivered by Safe & Healthy

There are many considerations and there is usually no out of the box programs that actually deliver measurable results that last. Recently we delivered a Get Back to life campaign to a company in Sydney. We had a moderate budget, we wanted to select a few smokers onsite to deliver a targeted campaign and use this to educate other employees onsite. Click the link to find out more, this is a really powerful campaign.

Safe & Healthy