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Putting Behavioral Economics to Work


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WWCMA Meeting November 15, 2011: Putting Behavioral Economics to Work with Health and Wellness

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Putting Behavioral Economics to Work

  1. 1. Putting Behavioral Economics to Work with Health and Wellness Worksite Wellness Council of Massachusetts | November 15, 2011
  2. 3. The Problem <ul><li>Homo Economicus </li></ul><ul><li>(How we’ve viewed people) </li></ul><ul><ul><li>Rational </li></ul></ul><ul><ul><li>Maximize value for self </li></ul></ul><ul><ul><li>Well informed </li></ul></ul><ul><li>Likelihood of events based on objective probabilities and facts </li></ul><ul><li>Homo Sapiens </li></ul><ul><li>(How people really behave) </li></ul><ul><ul><li>Boundedly rational </li></ul></ul><ul><ul><li>Use decision “short-cuts” </li></ul></ul><ul><ul><li>Make decisions using available information </li></ul></ul><ul><ul><li>Likelihood of events based on context, emotion, recent events </li></ul></ul>Benefit designs, communication, and delivery are based on assumptions about peoples’ behaviors that are proving not to be accurate
  3. 4. We Use Mental Shortcuts $ ______ $ ______ A cup of coffee and a newspaper together cost $3.50. The coffee costs $1.00 more than the newspaper. How much does the newspaper cost?
  4. 5. Do NYC Cab Drivers Maximize Their Outcomes?* * Camerer et al., Labor Supply of New York City Cab Drivers: One Day at a Time. Quarterly Journal of Economics , 1997.
  5. 6. Six Behavioral Tendencies That You Can Harness or Overcome
  6. 7. Inertia : A Bias for the Status Quo
  7. 8. Organ Donation Source: Johnson & Goldstein. Do Defaults Save Lives? Science , November 2003. Effective consent percentage Explicit consent (opt-in) Presumed consent (opt-out) Plan Design: Leveraging Defaults to Overcome Inertia
  8. 9. Overcoming Inertia with Ease: On-Site Flu Shots
  9. 11. Temporal Discounting : The Tyranny of the Present vs. the Promise of the Future
  10. 12. You Might Need to Lose Weight, But Why Do You Want to Start Now?
  11. 16. New Contest at My Gym for the Holidays! <ul><li>No Gain for the Holidays </li></ul><ul><li>Having a problem keeping off the pounds during the holiday season? Then we have the contest for you. </li></ul><ul><li>If you don’t gain a single pound from Nov. 21 st until Jan. 2nd, </li></ul><ul><li>YOU WIN ONE FREE MONTH OF MEMBERSHIP! </li></ul><ul><li>You must weigh-in every Monday.* </li></ul><ul><li>* All contestants actual weights will be kept confidential. </li></ul>
  12. 17. Loss Aversion : Losing Hurts Worse Than Winning Feels Good
  13. 18. Framing Messages: Using Loss Aversion to Promote Wellness
  14. 19. Framing Messages: Using Loss Aversion to Promote Wellness
  15. 21. Framing Messages: Using Loss Aversion to Promote Wellness
  16. 22. Plan Design: Using Loss Aversion to Save Money Targeted employees with maintenance medications Prescription home delivery (Large retailer) Two retail courtesy fills allowed (a financial loss) By third fill employees must... Active decision required Switch to home delivery Stay at retail Call PBM to switch Pay drug’s full cost at retail
  17. 23. Social Norms : What’s Everyone Else Doing?
  18. 24. Social Norms: Smoking Is Addictive, but Quitting Is Contagious* *Christakis & Fowler. The Collective Dynamics of Smoking in a Large Social Network. The New England Journal of Medicine , 2008 . “ What people need to understand is that because our lives are connected, our health is connected.” — Nicholas Christakis, M.D, Ph.D.
  19. 25. Using Social Norms: Health & Wellness Events
  20. 27. Using Leadership and Champions to Create Social Norms
  21. 28. Using Social Norms: On-Site Screenings
  22. 30. Choices : Liberation or Paralysis?
  23. 33. Availability : Hearing the Wake-Up Call
  24. 34. A New Customer Reality for Wellness Messaging? A Possible Focus of Health Engagement Over the Course of One Year Emphasize health engagement the other 50 weeks AE pre-AE post-AE Get flu shot; why it’s particularly important for diabetics Diabetes c. Take an HRQ; special sidebar on diabetes Diabetes d. Diabetes a. Reduce the focus on annual enrollment Diabetes b.
  25. 35. Opt-in Text Messaging <ul><ul><li>Reminders </li></ul></ul><ul><ul><li>Calls to action </li></ul></ul><ul><ul><li>Behavioral campaigns </li></ul></ul>
  26. 36. A Way to Enhance Behavior Change Efforts educate motivate facilitate Make It Easy Make It Relevant