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Social vs. Financial Incentives: The Burning Question In Employee Wellness
 

Social vs. Financial Incentives: The Burning Question In Employee Wellness

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Today 75% of large employers use financial incentives to encourage employee participation in wellness programs. But the jury’s still out on whether to focus rewards on participation or outcomes. And ...

Today 75% of large employers use financial incentives to encourage employee participation in wellness programs. But the jury’s still out on whether to focus rewards on participation or outcomes. And the lively debate continues about whether financial incentives for wellness really work or if social incentives provide the ultimate panacea.

In these slides and their associated free webinar (http://www.shapeup.com/resources) we’ll explore the best research about the effect of social and financial incentives on health, discuss innovative ideas about how best to reward your employees for wellness, hear from several large employers about their incentives experience, and share ShapeUp’s own views on the burning question of social vs. financial incentives. View these slides and watch the webinar to:

* Hear about the latest research on the impact of social and financial incentives on health
* Learn best practices for harnessing the power of social and financial incentives
* Discover how to maximize your current financial incentives investment
* Understand how your peers are currently leveraging incentives to promote employee wellness

Watch the archive of the webinar at http://web.shapeup.com/wellness-social-vs-financial-incentives/.

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    Social vs. Financial Incentives: The Burning Question In Employee Wellness Social vs. Financial Incentives: The Burning Question In Employee Wellness Presentation Transcript

    • Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary.
    • Today’s  Webinar  Hosts Rajiv Kumar, M.D. Founder & Chief Medical Officer rkumar@shapeup.com Shawn LaVana Vice President of Marketing slavana@shapeup.com Elise Meyer Marketing Associate emeyer@shapeup.com Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 2
    • Join the Conversation on Twitter @shapeupdotcom #wellnessincentives Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 3
    • Our  Company’s  Mission Creating a healthier world by leveraging social influence to engage people in healthy activities Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 4
    • Today’s  Agenda• Current State of Wellness Incentives• Employer Perspectives• Financial & Social Incentives Research• ShapeUp’s  Approach  to  Incentives• Key Takeaways• Questions & Answers Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 6
    • The Current State ofEmployee Wellness Incentives Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 7
    • Incentives are popular, but formats differ n=22 n=16 n=13 n=12 100% $1,000+ Results HSA No contribution 80 $500-$700 Prizes $300-$500 60 Discount Participation 40 on Yes premiums $100-$200 20 Cash $1-$100 0 Offer incentives Basis of Average Format of incentive amount incentive (per yr) Average 375 amount Average Annual Incentive = $375 Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 8
    • Mixed results with financial incentives Employee Participation by Program, 2011 50% 46% 45% 40 30 With Incentives 25% 20 19% 16% Without Incentives 14% 10 0 HRA Biometric Disease Participation Screening ManagementSource: 2011 Towers Watson/National Business Group on Health Staying@Work (n=335) Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 9
    • Moving toward penalties and outcomes Employers Using Penalties Employers Using Rewards or Penalties in Their Wellness Programs Based on Health Outcomes 100% 100% 80 80 60 60 No No 40 40 20 20 Yes Yes 0 0 2009 2011 2012E 2011 2012ESource: 2011 Towers Watson/National Business Group on Health Staying@Work (n=335) Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 10
    • Health care reform expands incentivesSection 2705 of the Patient Protection and AffordableCare Act (ACA)• Beginning in 2014, employers may use up to 30% of total health insurance premiums (50% at the discretion of the secretary of health and human services) to provide outcome-based wellness incentives.• Rewards can  “be  in  the  form  of  a  discount  or  rebate  of  a  premium  or   contribution, a waiver of all or part of a cost-sharing mechanism (such as deductibles, copayments, or coinsurance), the absence of a surcharge, or the value of a benefit that would otherwise not be provided  under  the  plan.” Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 11
    • What are social incentives?• Teamwork (social support)• Competition (friendly)• Public recognition (social status)• Peer pressure (accountability)• Social norms (company culture)• Altruism (helping others) Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 12
    • Employer use of social incentives Social Networking • 42 percent of high-performing companies plan to incorporate some element of social networking into their employee health initiatives by 2012. Wellness Competitions • “This  year, for the first time, workplace competitions (individual or team competitions for weight loss, physical activity, or other goals) are among the top five program elements in several regions. This reflects the rapidly growing popularity of such activities, as employers seek new ways to motivate and challenge employees to improve their health, leveraging social psychology and peer motivation.”Sources: Towers Watson 2010 Healthcare Report, Buck Consultants 2010 Global Wellness Survey Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 13
    • Employer Perspectives on Incentives Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 14
    • Erica UllmanWellness Program ManagerLife Technologies Corporation Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 15
    • How We Use Incentives U.S. Medical Engagement Wellness Plans in Health Incentives Improvement Full replacement Qualifying activities Non-tobacco use consumer directed plans for employee and spouse: premium discount (10%) with health savings •  Health  Assessment Health Savings Account account: •  Biometric  Screenings Contributions: 1. HSA Plus Plan  preventive exam ($100) 2. HSA Standard Plan  health coaching ($100)  biometric results ($400) Planning and decision support tools Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 16
    • What  We’ve  Learned 2010 Action Preventive exams Engaging employees who increased are not enrolled in medical plan (18%) Health risk & screening What  Didn’t  Work What Worked values from yr 1 to yr 2 Offering incentives for just have improved or participation; employees remained flat wanted to be rewarded for results & performance The  “I kept going because  I  didn’t  want  to   let my team down”   Factor Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 17
    • Kenneth ForestiHealth & Wellness Consultantkenneth.foresti@excellus.com Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 18
    • How We Use Incentives• Health insurance premium incentive of $520/year is tied to health screenings• Premium incentive is available to all employees of Excellus Health Plan and those of select subsidiaries.• Online wellness incentive program designed to encourage individuals to take a more active role in managing their health and well-being.• Earn up to $500 for an employee of Excellus Health Plan and those of select subsidiaries and up to an additional $500 for employee’s  spouse or domestic partner by participating in the online wellness incentive program. Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 19
    • What  We’ve  Learned Health Screening Participation: HRA/Wellness Profile Participation: Excellus Health Plan Employees and Excellus Health Plan Employees and those those of select subsidiaries of select subsidiaries90% 70%80% 60%70% 50%60%50% 40%40% 30%30% 20%20%10% 10% 0% 0% 2005 2006 2007 2008 2009 2010 2011 2005 2006 2007 2008 2009 2010 2011 Year YearKey: Key:Blue - No or minimal premium incentive Blue - Non-wellness incentive yearsGreen - $520 health insurance premium Green - Wellness incentive years (2008 pilot) incentive Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 20
    • Cindi SolomonEmployee Wellness Operations Managercindi.solomon@nationwidechildrens.org Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 21
    • How We Use Incentives• Medical insurance premium discount • $20/pay; $520/year • Annual health risk assessment during benefits open enrollment. Discount applied first six months of the year • Employees  actively  participate  in  ShapeUp’s  physical  activity   challenges. Discount applied second six months of the year• Program enrollment incentives• Program participation and completion incentives• Payroll  deduction  “promissory  note” Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 22
    • What  We’ve  Learned• Communication is key• Must have buy-in and collaboration with other departments • Benefits • Payroll • Marketing• Employees  should  have  some  “skin”  in  the  program• Enrollment incentives are useful for boosting enrollment numbers; not so great for sustained engagement or program completion• Depending on the value of the incentive employees may view the program as mandatory Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 23
    • Bryce WilliamsDirector, Wellvolutionbryce.williams@blueshieldca.com Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 24
    • Aligned Incentives 2011 Discount: Tier 1 (<$34K) $240 Tier 2 ($34-54K) $396 Tier 3 (>$54K) $720 2012 Discount: Tier 1 (<$34K) $504 Tier 2 ($34-54K) $804 Tier 3 (>$54K) $1,200 Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 25
    • Shape Up Shield 1400 1200 1000Participants social wellness is: 800  “sticky” - significant alumni retention 600  “viral” – strong newbie 400 adoption  “popular” – one 200 program = 40% of BSC employees 0 SUS1 SUS2 SUS3 SUS4 Alumni Newbies Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 26
    • Employers seek three wellness goals1. One-time actions Health assessment, biometric screening completion2. Ongoing actions Regular exercise, healthy eating, ongoing engagement3. Outcomes Reaching and sustaining milestones or biometric results Weight (e.g. BMI threshold, blood Loss pressure) Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 27
    • Financial Incentives: The Research Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 28
    • Financial incentives produce weight lossFinancial Incentive–Based Approaches forWeight Loss• Objective: Do behavioral economic theories work for weight loss?• Design: 57 overweight participants aged 30-70, randomized to 3 weight loss plans: monthly weigh-ins, lottery incentive, deposit contract, with goal of 1 lb a week for 16 weeks• Results: Control group (3.9 lb), lottery group (13.1 lb), deposit contract (14 lb). Incentive participants weighed significantly less at 7 months (9.2 lb), controls did not.• Conclusion: Financial incentives produced significant weight loss over 16 weeks that was not fully sustained. Longer-term evaluation of incentives is needed. Kevin G. Volpp, MD, PhD et al, JAMA. 2008;300(22):2631-2637. Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 29
    • Even small incentive amounts can workTesting the Effect of Different Levels ofFinancial Incentives on Weight Loss AmongOverweight Employees• Objective: Test ability of modest financial incentives to encourage weight loss in overweight employees• Methods: Randomized, measurements at baseline, 3, and 6 months and two levels of incentives ($7 and $14 per percentage point of weight lost)• Results: At 3 months, participants with no financial incentive lost 2 lbs, $7 group lost 3 lbs, and $14 group lost 4.7 lbs. Between baseline and 6 months, when financial gains were equalized, weight losses were similar across groups.• Conclusion: Modest financial incentives can be effective in motivating overweight employees to lose weight, but results may not be sustainable.Finkelstein, Eric A. PhD et al, Journal of Occupational and Environmental Medicine, September 2007 Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 30
    • Lessons from behavioral economics• How people perceive immediate vs. delayed rewards• Mental accounting and benefit of not bundling rewards• Structuring incentives as rewards vs. penalties Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 31
    • Summary of financial incentives research• Financial incentives work well for one-time actions• They can produce short-term outcomes (e.g. weight loss)• Even relatively small amounts can work• Long-term sustainability is unproven• Behavioral economics offers key lessons: • Immediate vs. delayed benefits • Mental accounting • Rewards vs. penalties Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 32
    • Social Incentives: The Research Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 33
    • Social incentives for weight loss (1984)Weight Loss Competitions at the Work Site:Impact on Weight, Morale and Cost-Effectiveness• Objective: Test competition as an incentive for weight loss• Methods: Three team-based weight loss competitions were held in workplaces; one was inter-company, the other two were intra-company.• Results: Attrition was less than 1%, weight loss averaged 12.1 lbs. Participants reported positive changes in morale and employee/management relations, and both considered the competition important to the success of the program. The cost-effectiveness ratio ($2.93 per 1% reduction in percentage overweight) was the best at the time.• Conclusion: Teamwork and competition are effective motivators for weight loss and lead to other positive outcomes in a workplace setting.K D Brownell et al, American Journal of Public Health, Vol. 74, Issue 11 1283-1285, 1984 Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 34
    • Social incentives for weight loss (2009)A Statewide Intervention Reduces BMI inAdults: Shape Up Rhode Island Results• Objective: Evaluate weight loss outcomes• Methods: Measure weight loss achieved among 3,311 participants in Shape Up RI, a 16-week workplace-based exercise and weight loss team competition.• Results: 7 lbs, 30% achieved clinically significant weight loss of 5%, shifted the BMI distribution from mean of 29.4 to 28.2 and reduced the obese population from 39 to 31%. Weight loss maintenance at 10 months was 73%.• Conclusion: Team-based, weight loss competitions can produce weight losses in large numbers of participants and may be sustainable long-term.Rena R. Wing, et al , Obesity (2009) 17 5, 991–995. Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 35
    • Peer recruitment and social supportBenefits of Recruiting Participants With Friendsand Increasing Social Support for Weight Lossand Maintenance• Objective: Determine the benefits of social support for weight loss and maintenance• Methods: Recruited participants (N = 166) either alone or with 3 friends or family members and then randomly assigned them to a standard behavioral treatment with and without social support strategies.• Results: Participants recruited with friends and given social support had greater weight losses at 4-months (20 lbs) and 10- months (19 lbs) than those recruited alone (15 lbs and 12 lbs). In those recruited alone, 76% completed and 24% maintained weight loss in full through month 10. When recruited with friends and social support, 95% completed and 66% maintained weight loss in full.• Conclusion: Recruitment with friends and social support led to greater weight losses and longer-term sustainability.Rena R. Wing and Robert W. Jeffery, 27 July 1998. Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 36
    • Outcomes spread with social incentivesTeammates and Social Influence AffectWeight Loss Outcomes in a Team-BasedWeight Loss Competition• Objective: Investigated the effects of teammates and social influence on individual weight loss and exercise outcomes• Method: 12-week, team-based wellness competition• Results: Overweight/obese completers lost 4.2% of initial body weight. Weight loss was similar among teammates. Having a greater percentage of teammates in the weight loss division and reporting higher social influence for weight loss were both associated with greater weight loss. Clinically significant (5%) weight loss tended to cluster within teams.• Conclusion: Weight loss and the behaviors that lead to it are likely contagious, and harnessing and maximizing social influence for weight loss enhances outcomes.Tricia Leahey et al, Obesity, Feb 2012. Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 37
    • Summary of social incentives research• Can produce significant health outcomes• Often lead directly to other positive, non-health outcomes• May produce more long-term sustainability than financial incentives• Outcomes via social incentives have been shown to be contagious, spreading from person to person Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 38
    • Linking Social &Financial Incentives Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 39
    • Synergies with social & financial incentivesMonetary Contracts in Weight Control: Effectivenessof Group and Individual Contracts of Varying Size• Objective: Test individual vs. group monetary contracts for weight loss• Methods: 89 overweight males (aged 35-57) assigned randomly to 1 of 6 groups for 15 wk weight loss program with goal of 30 lbs total loss. Each involved a deposit contract. Groups varied in amount of deposit ($30, $150, $300) and type of contract (refunds contingent on either individual or group performance).• Results: Group contracts produced significantly more weight loss (31.1 lbs) than individual contracts (26.8 lbs) and the difference was maintained over 1 year (18.5 lbs vs. 14 lbs). Larger deposits led to larger outcomes, but short-term advantages rapidly disappeared.• Conclusion: Linking financial incentives to social incentives produced the best weight loss and long-term maintenance.Robert W. Jeffery et al, Journal of Consulting and Clinical Psychology, Volume 51, Issue 2, April 1983 Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 40
    • ShapeUp’s  Approach  to   Wellness Incentives Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 41
    • Build the foundation on social incentives 1 Teams and groups 2 Competitions & challenges 3 Peer-to-peer recruitment 4 Facilitate conversations 5 Public expression 6 Peer encouragement 7 Status & comparison Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 42
    • Add financial incentives in three key ways Reward Progress Reward in Real-Time Reward Social Actions Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 43
    • Reward progress to sustain engagement• Give employees ability to earn rewards for making measurable improvements, moving in the right direction• Carries more weight than participation alone, and puts focus on the journey not just the destination• Rewarding progress keeps people engaged and gives all employees a fair chance to play Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 44
    • Maximize impact with real-time rewards• Don’t  make  employees  wait:  reward   them in real-time when they take an action or reach a milestone• Technology has made this logistically possible• Smaller amounts in the present can carry more weight than larger amounts in the future• Increase the impact and effectiveness of your incentives without increasing your budget Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 45
    • Use financial rewards for social actions• Encourage peer-to-peer recruitment (e.g. reward invites)• Promote peer support (e.g. reward captains, peer-to-peer challenges)• Leverage accountability (e.g. team completion rewards) Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 46
    • Final Thoughts Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 47
    • Key  Takeaways  from  Today’s  Webinar Financial incentives work for promoting one-time actions. Short-term financial incentives produce outcomes but are not clearly sustainable. Smaller, real-time, progress-based rewards, de-coupled from larger costs, leverage behavioral economics principles to boost engagement and outcomes. Social incentives produce equivalent outcomes and may offer longer-term sustainability. Financial and social incentives can be synergistic, more powerful together than alone. Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 48
    • Let’s  Continue  the  Conversation About ShapeUp We leverage both social and financial incentives to drive employee behavior change. Our evidence-based platform covers two million people at over 200 employers and health plans. Contact Us Visit www.shapeup.com, email Dr. Kumar at rkumar@shapeup.com, or call our office at (401) 274-1577. Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 49