Incentives and Healthcare


For incentives to be effective they need to be closely tied to the desired behavior and not the results of the behavior.
It is funny sometimes how two different events end up having a connection. My wife and I were driving and listening to the radio when a story about weight loss programs played. One of the comments made was that although programs such as WeightWatchers work health insurance does not pay for them. My wife made the comment that health insurance would be better off if they did pay for them because healthy people, people who weigh less, are much cheaper to care for in the long run. I agreed with her. We then went on to have a discussion of incentives and healthcare. Today I caught a webinar on just such a topic. Paul Hebert of I-2-I Incentive Intelligence presented along with Nate Byrnes from Virgin HealthMiles on Key Considerations for Creating Effective Incentives Plans. Paul presented on what makes incentives effective. He made several key points:

  1. Incentives are just tools
  2. Humans engage in “temporal discounting”, which means that the value of something is diminished today the further in the future it is awarded
  3. Incentives should be focused on behaviors that produce desired results and not the results themselves.

Nate Byrnes of Virgin HealthMiles provided examples of how his company has helped companies design healthcare incentive plans to focus on the things Paul described. He made it clear that close association of incentives with the behaviors you want to change, such as getting people to walk more or eat healthier, does a better job of getting people to change than just having some contest where people are rewarded for losing the most weight at the end of the year.
Reinforcement theory
The principles they talk about are well known in psychology. They are well known in weight loss programs. If you have ever tried to change a behavior, such as poor eating habits, you know that rewards tied closely in time are more effective than those that are not. Paul used the example that eating a hamburger today is more rewarding that the flat belly in six months. It is oh so true.
Beyond health programs the principles of incentives talked about have applicability to all types of incentive programs whether it is sales, productivity or safety. More rewards, give more frequently and in closer temporal proximity to the desired behaviors which produce the results you want will work better than programs that are months or a year in length. You can take that to the bank!
As a free plug for Paul you can catch a webinar of his on October 3rd at 1 pm. Here is the link. He is worth the listen.

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