Money over Matter: Can Cash Incentives Keep People Healthy?Posted: October 5, 2012
By: Jordan Lite, First Posted on Scientific American
Research in recent years suggests—and a handful of new businesses are betting—that you might. The Web-based companyStickK.com lets users sign commitment contracts to lose weight, exercise or quitsmoking—and pay up if they default. Members of the Boston-based start-upGym-Pact are charged for every day they pledge to work out but do not.
Financial incentives have made their way into health reform, too. The 2010 Affordable Health Care Act allows employers to offer rewards—or to exact penalties—worth up to 30 percent of health insurance premiums for employees who meet certain health targets, such as quitting smoking or getting their blood pressure below a certain measure.
But scientists are just beginning to tease out the circumstances in which financial incentives work best—and why. Different health behaviors might call for distinct incentive schemes, as might certain populations. And tacking on social or moral incentives could add to the impact of monetary incentives.
Depending on whether the incentives are positive (such as payment for good behavior) or negative (fines for bad behavior), they are thought to play on different psychological processes.
Positive reinforcement schemes provide an immediate reward for a behavior whose benefits would not be obvious for months or years, accelerating the rate at which a person adopts that activity, says Theresa Marteau, director of the Center for the Study of Incentives in Health at King’s College London.
Financial incentives might also work if they are in the form of a lottery, because the small chance of a large reward is emotionally appealing, according to a 2008 studyin JAMA, The Journal of the American Medical Association. On the other hand, pecuniary disincentives might play on loss aversion— the idea that we value losing something twice as much as gaining the same amount, which means we would have to have a chance of winning $20 to make up for the risk of losing $10—a behavioral economic principle that is likely at work, too, the JAMA paper notes.
Positive reinforcement schemes encourage one-time, good behaviors, such as showing up for disease screening or vaccination programs, according to a review Marteau published in 2009 in BMJ (the British Medical Journal). The reason? You only have to do them once, says Kevin Volpp, director of the Center for Health Incentives at the University of Pennsylvania School of Medicine.
Long-term, the picture is unclear. For those looking for more sustained behavioral change, research suggests that financial incentives work best to help people stop smoking and exercise more. They also motivate kids to do well in school. The results, however, are mixed for weight loss.