Behavioral Economics, Dr Paul Terry

1,551 views

Published on

Watch the recorded webinar archive anytime at: http://healthpromotionlive.com

Published in: Education, Health & Medicine
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,551
On SlideShare
0
From Embeds
0
Number of Embeds
105
Actions
Shares
0
Downloads
32
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Behavioral Economics, Dr Paul Terry

  1. 1. Dec 14, 2010Behavioral Economics:Review concepts, supporting research, andmodifying company policies for the betterPresented by:Paul Terry, Ph.D.CEO, StayWell Health Management © 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 1
  2. 2. Behavioral Economics Thaler, R.H., & Sunstein, C.R. (2009). Nudge: improving decisions about health, wealth, and happiness (2nd ed.). New York: Penguin Group. http://www.danpink.com/drive http://danariely.com/ http://www.alfiekohn.org/books/pbr.htm
  3. 3. Overview and General ConceptsChoice Architect  Responsibility for organizing the context in which people make decisionsLibertarian Paternalism- “Free to Choose” Libertarian  Free to make choices and opt out of undesirable arrangements should they want to do so  Do not want to burden those to want to exercise their freedom Paternalism  Influencing other people’s behavior in order to make their lives longer, healthier, and betterNudge  Any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives  Not mandates (i.e., putting healthier food at eye level rather than banning junk food) © 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 3
  4. 4. Overview and General Concepts- cont.Econs Reject paternalism- claim that human beings do a terrific job of making choices Thinks and makes choices well – Think like Albert Einstein – Store as much memory as IBM’s Big Blue – Exercise the willpower of Mahatma Gandhi Respond primarily to incentivesHumans Humans predictably error. Decision making is not great Research shows that people stick with a default option Humans respond to incentives, but also influenced by nudges © 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 4
  5. 5. Modifying CompanyGroup Discussion Policies for the Better
  6. 6. Mock Company Policies:Nudges, Pushes, or Kicks?The following exercise will allow you to analyze companypolicies using your new choice architecture perspective. Directions:  Everyone will score each policy on a scale of 1 to 10: –A paternalistic nudge will score 1-3 –A well-meaning push will score 4-7 –A mean kick in the butt will score 8-10 Discuss and Share! Once we have scored each policy, we will evaluate each and work together to improve the policies that fall outside of the paternalistic nudge range. Note: The following policies are examples and used for discussion purposes only. © 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 6
  7. 7. Tobacco Cessation-Group DiscussionCompany provides ongoing and generous resources for allsmoking employees who are ready to quit smoking. In additionto providing a smoke free workplace to discourage smokers fromsmoking and to protect our staff from second hand smoke, wealso have established smoke free grounds surrounding ourbuilding/campus. (Research shows that more restrictive policiesresult in higher quit rates and reduced heart disease.) Smokersare asked to smoke in offsite areas.How would you score this policy? A paternalistic nudge will score 1-3 A well-meaning push will score 4-7 A mean kick in the butt will score 8-10© 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 7
  8. 8. Smoking Cessation Research- 2009 Smoking is the leading preventable cause of premature death in the United States.
  9. 9. Incentive Research, Smoking CessationStudy 1: A Randomized, Controlled Trial of Financial Incentives for Smoking Cessation  Randomly assigned 878 employees to two groups – Group one received information about smoking- cessation programs – Group two received information about smoking- cessation programs plus financial incentives – $100 for completion of smoking-cessation program – $250 for cessation of smoking after six months – $400 for abstinence for an additional six months – Confirmed by biochemical test (saliva or urine cotinine test) Source: Volpp, K.G., Troxel, A.B., & Pauly, M.V. A Randomized, Controlled Trial of Financial Incentives for Smoking Cessation. New England Journal of Medicine, 2009; 360(7):699-709. © 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 9
  10. 10. Results and Findings Financial incentives can have major impact on smoking-cessation Smoking-cessation rates among employees who were given both information about cessation programs and financial incentives to quit smoking were significantly higher than those that were given program information but no financial incentives Incentive group participants had higher rates of enrollment in a smoking-cessation program – 15.4% vs. 5.4% Incentive group had higher rates of smoking-cessation program completion – 10.8% vs. 2.5% Incentive group had significantly higher rates of smoking cessation than did the information-only group. – 6 months (20.9% vs. 11.8%) – 9 or 12 months (14.7% vs. 5%) – 15 or 18 months (9.4% vs. 3.6%) Source: Volpp, K.G., Troxel, A.B., & Pauly, M.V. A Randomized, Controlled Trial of Financial Incentives for Smoking Cessation. New England Journal of Medicine, 2009; 360(7):699-709. © 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 10
  11. 11. Weight Loss Research- 2008 Obesity falls just behind smoking as a preventable cause of premature death.
  12. 12. Exercise-Group DiscussionPhysical activity is strongly encouraged for all companyemployees, regardless of department or pay type. Managersare required to provide their verbal approval of exercise duringthe work day at staff meetings, or via team email messages. Forsalaried employees, exercise time is at their own discretion,provided it does not interfere with their work function and/orpriority commitments such as meetings and projects, not toexceed 1 hour per day. For hourly employees, the combinationof two 15 minute breaks, and the gift of another 15 minutes,allows for a total of 45 minutes of physical activity in the workdaywithout sacrificing paid time.How would you score this policy? A paternalistic nudge will score 1-3 A well-meaning push will score 4-7 A mean kick in the butt will score 8-10© 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 12
  13. 13. Incentive Research, Weight LossStudy 2: Financial Incentive-Based Approaches for Weight Loss, a Randomized Trial  57 healthy participants aged 30-70 years with a BMI of 30-40 were randomized to 3 weight loss plans: – Group one- Monthly weigh-ins – Group two- A lottery incentive program – Group three- Deposit contract that allowed for participant matching, with a weight loss goal of 1 lb per week for 16 weeks.  Outcome measurement- Weight loss after 16 weeks Source: Volpp, K.G., John, L.K., & Troxel, A.B. Financial Incentive Based Approaches for Weight Loss: A Randomized Trial. Journal of the American Medical Association, 2008; 300(22):2631-2637 © 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 13
  14. 14. Results and Findings The use of economic incentives produced significant weight loss during the 16 weeks of intervention. The longer-term use of incentives should be evaluated Incentive groups lost significantly more weight than the control group Compared with the control group – Lottery group lost an average of 13.1 pounds – Deposit contract lost an average of 14.0 pounds Half those in both incentive groups met the 16-lb target weight loss (47.4%), whereas 10.5% met the goal in the control group Net weight loss at the end of 7 months follow-up was larger in the incentive group (not statistically significant) – Control- 4.4 pounds – Lottery- 9.2 pounds – Deposit Contract- 6.2 pounds Incentive participants weighed significantly less at 7 months whereas the controls did not Source: Volpp, K.G., John, L.K., & Troxel, A.B. Financial Incentive Based Approaches for Weight Loss: A Randomized Trial. Journal of the American Medical Association, 2008; 300(22):2631-2637 © 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 14
  15. 15. Nutrition-Group DiscussionSoda, high fat, and high sugar products with little to noNutritional Value (NV), as determined by a panel of dietitiansand nutrition experts, offered in the lunch room will be sold attwice the value that it currently retails for. However, foodproducts offering unquestionable NV (e.g. water along with lowfat, low sugar, high fiber, and protein) will be sold at a wholesaleprice.Additionally, high NV foods at company events will be offered forfree, while low NV foods will need to be purchased at somevalue (TBD).How would you score this policy? A paternalistic nudge will score 1-3 A well-meaning push will score 4-7 A mean kick in the butt will score 8-10© 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 15
  16. 16. Impact on Population-Best Practices Level Engagement & Risk Research Reduction
  17. 17. StayWell Best Practices ResearchStudy Methods  Study sample included 22 companies from the StayWell book of business – 767,640 eligible employees, spouses, and retirees  52% of companies were first year clients  Rated on 9 best practice components identified by literature and industry experts using standard reports, internal documents and structured interviews with staff  Calculated total weighted score and split companies into two groups: standard practice vs. best practice  Compared engagement rates, prevalence of best practices and health risk impact Source: Terry PE, Seaverson EL, Grossmeier J, Anderson DR. J Occup Environ Med, 2008;50:633-641© 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 17
  18. 18. StayWell Best Practices ResearchBest Practice Elements  Comprehensive program design  Integrated incentives  Integrated, comprehensive communication plan  Strong senior management support  Dedicated onsite staff  Multiple program modalities (telephone, mail, online)  Population-based awareness building activities  Biometric health screenings  Vendor integration© 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 18
  19. 19. Best Practices Research Engagement Rates 100% 85% 84% 85% 80% 68% 67% 60% 47% 48% 40% 34% 20% 0% Health Coaching Coaching Coaching Assessment Eligibility Participation Completion Participation Standard Practice Best PracticeSource: Terry et al, 2008 © 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 19
  20. 20. Best Practices Research Use of Best Practices% Implementing Practice Source: Terry et al, 2008 © 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 20
  21. 21. Best Practices Research Population-Level Health Risk Change 3.50 3.46 3.45Number of Health Risks -2.0% 3.43 3.39 3.40 3.35 -4.7% 3.30 3.25 3.27 1-year 3.20 Baseline Health Assessment Follow-up Health Assessment Standard Practice Best Practice Source: Terry et al, 2008 © 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 21
  22. 22. Best Practices Research Intervention-Level Health Risk Change 4.25 4.09Number of Health Risks 4.00 -6.5% 3.83 3.75 3.63 -7.0% 3.50 3.37 1-year 3.25 Baseline Health Assessment Follow-up Health Assessment Standard Practice Best Practice Source: Terry et al, 2008 © 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 22
  23. 23. 401 K- Group DiscussionAll eligible company employees are automatically enrolled in thecompany 401k program after 6 months of employment. Basedon their age, and the risk profile they complete during benefitenrollment, their money is invested in the appropriateportfolio. Each employee must elect the percentage of theirsalary as part of the benefit enrollment forms; they cannot leaveit blank. There is a calculation tool that allows employees todetermine how much money they want to elect, and thecompany recommends that they elect the minimum required toreceive the company match. Employees are also encouraged tosign up for a 15 minute appointment with the HRdepartment/manager in order to help determine theircontribution amount.How would you score this policy? A paternalistic nudge will score 1-3 A well-meaning push will score 4-7 A mean kick in the butt will score 8-10© 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 23
  24. 24. Engagement Research – 2006
  25. 25. Engagement Research Study 3: Impact of Financial Incentives on Health Assessment (HA) Participation  Companies offering incentives for HA participation  Examined employee HA participation only  Excluded companies requiring spouses to participate in HA or requiring participation in multiple programs (e.g., HA and activity) to get incentive  Final sample: 36 StayWell customersSource: Anderson DR, Grossmeier J, Seaverson ELD, Snyder, D. The Role of Financial Incentives in Driving EmployeeEngagement in Health Management. ACSM’s Health & Fitness Journal, 2008;12(4):18-22. © 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 25
  26. 26. Impact of Incentives on HA Participation 100% 90% 80%HA Participation Rate 70% 60% 50% 40% 30% 20% 10% 0% $0 $100 $200 $300 $400 $500 $600 Estimated Incentive Value Source: Anderson et al, 2008 © 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 26
  27. 27. Impact of Incentive Type on HA Participation 100% 80%HA Participation Rate 60% 40% 20% 0% $0 $100 $200 $300 $400 $500 $600 Estimated Incentive Value Non-Financial Cash Benefits-Integrated Source: Anderson et al, 2008 © 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 27
  28. 28. Engagement ResearchStudy 4: Impact of Communications & Culture on HA Participation  Structured interviews with Account Managers  Communications during program year – Delivery modalities – Types of communications – Perception of quality  Worksite culture – Factors related to cultural support for employee health – Perception of cultural support© 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 28
  29. 29. Culture Score DefinitionManagement Support  Executive & mid-level management supportInfrastructural Support  Demonstrated efforts around health policy, promotion of nutrition and/or physical activity, flexible schedule for wellness activities, company mission statementWellness Team  Member of management actively participates in teamIntegrated Program  Data exchanged between vendors or warm-transfer of participants to additional servicesOnsite Staff  Dedicated onsite staff, including all vendors© 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 29
  30. 30. HA Participation by Communication & Culture 100% Weaker Strong 80% 69%HA Participation Rate 65% 60% 53% 51% 51% 44% 41% 41% 40% 37% 33% 33% 27% 20% 0% Comm. Culture Comm. Culture Comm. Culture Non-Cash Cash Benefits-Integrated Incentives Incentives Incentives (n=4) (n=16) (n=16) Source: Seaverson ELD, Grossmeier J, Miller, TM, Anderson DR. The role of incentive design, communication strategy and worksite culture on health assessment participation (in press). © 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 30
  31. 31. Conclusions Financial incentives can have major impact on HA participation Healthy culture and effective communications are essential to realize potential value of incentives Integration of incentives into health plan design most effective Need more research on independent and combined impact of these and other best practices on program engagement and outcomes© 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 31
  32. 32. Volunteerism Policy- Group DiscussionEmployees are expected to volunteer one week peryear. Supervisors are evaluated on the level of volunteerism intheir departments and are rated per their efforts in corporatecitizenship. Supervisors will remind staff if they are short ontheir expected number of volunteer service hours.How would you score this policy? A paternalistic nudge will score 1-3 A well-meaning push will score 4-7 A mean kick in the butt will score 8-10© 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 32
  33. 33. Green Policies- Group DiscussionAll company employees will receive a reusable dining set containing aplate, silverware, and water bottle for use at work.Interested employees can receive and sign an environmentalcontract/covenant stating: They agree to use these materials the majority of the time for theireveryday work eating needs (not including company events) Will recycle appropriately And agree to rethink the need of single use products around the officeThe individuals that sign the covenant can then earn a credit fromcompany to make a $20 donation at the end of the year to anenvironmental/nature group of their choice (default choice- TBD)How would you score this policy? A paternalistic nudge will score 1-3 A well-meaning push will score 4-7 A mean kick in the butt will score 8-10 © 2010. StayWell, NextSteps and StayWell Online are registered trademarks of The StayWell Company, LLC. All rights reserved. 33

×