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Modifying behavior with financial incentives

Incentives to stay healthy.

 Research has shown that  rewarding people for making good choices increases the chance that they will continue to make good choices. For this reason, more and more employers  are offering financial incentives to employees who take steps to get healthy.  

Dr. Kevin Volpp is the Director of the Center for Health Incentives and Behavioral Economics at University of Pennsylvania.  He says that companies realize that a healthier workforce means lower healthcare costs. 

"There's clearly been a shift in the past few years towards employers increasingly recognizing that the health habits of their employees are one of the top challenges to affordable benefits coverage. Our healthcare system channels nearly all the money towards treating disease once people get sick.  There is a growing sense that we can probably do better than that by selectively focusing on programs that are successful in making people healthier and lowering their risk [for disease]."

Companies most often incentivize healthy outcomes by lowering insurance premiums paid by employees at some time in the future. But immediate rewards are much more effective, Volpp says. "The ideal program really does provide people with much more in the way of ongoing, frequent feedback.  And, rewards that happen in the present, not just in the future." 

Volpp emphasizes that people should make small changes that will not overwhelm or complicate their lives. "If you can substitute drinking zero calorie beverages instead of regular soda, if you drink a lot of soda, that's going to reduce your caloric intake substantially," he says.

He has a similar philosophy when it comes to saving money. Simply setting up an automatic deposit into a savings account that requires little to no maintenance can be a big step towards financial security. "If zero percent was coming out of your paycheck before and now it's 3 percent [or], now it's 5 percent, people tend to stick with that new default," Volpp says.

 

 

 

About the author

Adriene Hill is a senior multimedia reporter for the Marketplace sustainability desk, with a focus on consumer issues and the individual relationship to sustainability and the environment.
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Good story, but this article left out several key provisions. Namely--why don't stories like these highlight some potential 'whopper' incentives ($1,000+/year), or even good sized costs of not complying with certain wellness programs employers have created for their employees? Come on folks--where's the accountability for employees not improving their health? Auto insurers are allowed to discriminate for bad driving behavior, so self-insured employers should be able to assess health risk appropriately as well. This will most likely change under ACA, but at least mention it more in programs like these, hum? Keep up to good work!

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