Incentives and Motivation
For
Employee Health Management
Utah Conference on Worksite Health Promotion
April 4, 2013
Tim Butler, MS, MCHES, CWC
Health & Wellness Department
SelectHealth/Intermountain Healthcare
On the Art and Science of Motivation
• Science: knowledge gained from experience,
observation, measurement and analysis –run the
experiment, observe, measure, evaluate and refine
• Art: creative application; synthesis, think “outside the
box”
Wellness Incentive Trends
• Employers face a harsh certainty these days. Poor
employee health will continue to derail profitability
unless innovative solutions put the train back on the
track. To continue business as usual--which maintains
a "sick care system" focused on a rapidly growing
burden of chronic health conditions--is
unsustainable.
Ronald R. Loeppke, MD
Successful Preventive Medicine: Culture, Communication and Carrots . By Ronald R. Loeppke, MD. January 1, 2011,
http://www.riskandinsurance.com/story.jsp?storyId=533328390
Wellness Incentive Trends
• “Studies are documenting how organizations with
comprehensive wellness programs achieve remarkably
lower total healthcare costs, with shorter sick leaves,
reductions in long- and short-term disability, and improved
general workforce health.
• Medical costs fall by about $3.27 and absenteeism costs fall
by about $2.73 for every $1.00 spent on comprehensive
workplace wellness and prevention programs, according to
a Harvard meta-analysis study of the literature titled
"Workplace Wellness Programs Can Generate Savings"
published in Health Affairs.”
RONALD R. LOEPPKE, MD
Successful Preventive Medicine: Culture, Communication and Carrots . By Ronald R. Loeppke, MD. January 1, 2011,
http://www.riskandinsurance.com/story.jsp?storyId=533328390
EHM can work!
Questions:
• How to reproduce and optimize the effects?
• How to make the intervention simultaneously
generalizable, effective, efficient and
sustainable?
Wellness Incentive Trends
• “High employee engagement and active participation are
required to achieve the desired health outcomes and costs
savings. Employees not only must be educated about the
benefits of joining the program, they also must be
motivated to improve their health behaviors.
• It is not easy to convince people to put down the cigarettes
or go to the gym instead of the sofa. Appropriately
structured incentives, often referred to as "carrots," play a
starring role in a successful preventive medicine program.”
Ronald R. Loeppke, MD
Successful Preventive Medicine: Culture, Communication and Carrots . By Ronald R. Loeppke, MD. January 1, 2011,
http://www.riskandinsurance.com/story.jsp?storyId=533328390
Wellness Incentive Trends
A wide a variety of incentive strategies have been used to promote
healthy lifestyle choices and discourage unhealthy behaviors.
Incentives can be extrinsic or intrinsic as well as tangible or intangible,
and often include;
• Peer recognition;
• Group competitions;
• Merchandise;
• Time off/vacation days;
• Cash for allocations to a 401(k) or flexible or health savings accounts;
• Reductions in healthcare premiums or
• Some form of penalty; surcharge
Wellness Incentive Trends
Aon Hewitt's April 2013 Health Care Survey:
• 83% of 800 employers surveyed offer incentives for participation in
wellness and health management programs such as health risk
questionnaires, biometric screenings and smoking cessation programs.
• 79% of employers only use rewards — such as premium discounts,
cash or gift cards — to incentivize participation.
• 58% said they plan to impose penalties within the next 3-5 years on
employees who “do not take appropriate actions for improving their
health”
• Just 5% of employers exclusively use health insurance premium
increases and other penalties.
• 16% offer a mix of rewards and penalties.
More employers expected to penalize wellness program nonparticipation: Survey
Mar. 25, 2013, Matt Dunning. http://www.businessinsurance.com/article/20130325/NEWS03/130329894
Wellness Incentive Trends
Targeting specific outcomes
• The percentage of employers tying incentives to specific
health management outcomes also is expected to grow,
according to Aon Hewitt's study.
• ~24% of employers offer incentives for progress toward
or achievement of healthy BP, BMI, blood sugar and
cholesterol.
• More than 66% said they are considering implementing
outcomes-based incentives within the next few years.
More employers expected to penalize wellness program nonparticipation: Survey
Mar. 25, 2013, Matt Dunning. http://www.businessinsurance.com/article/20130325/NEWS03/130329894
Wellness Incentive Trends
“Employers getting tough” according to the March, 2013 Towers
Watson survey of 583 employers:
• 18% of employers apply premium and/or deductible penalties
against employees for not participating in or completing health
management programs and activities
• 36% plan to implement penalties in 2014.
• 16% of the 583 employers surveyed said they offer outcomes-based
incentives in the form or rewards or penalties
• 47% said they were planning to incorporate such incentive
structures in 2014.
More employers expected to penalize wellness program nonparticipation: Survey
Mar. 25, 2013, Matt Dunning. http://www.businessinsurance.com/article/20130325/NEWS03/130329894
Wellness Incentive Trends
• The good news: extrinsic incentives appear to produce improved
engagement in some wellness programs.
• The bad news: employers are spending more and more to get those
results.
• According to a recent survey of nearly 150 mid- to large-size
companies, the cost of incentives provided by employers increased
a whopping 65 percent between 2009 and 2010, rising from $260
per employee to $430 per employee, on average. The cost of
incentives for dependents rose also, to an average of $420 per
person.
• Where is the point of diminishing returns? Is the high cost of
incentives producing real returns and they sustainable?
Motivational Style Depends on your Assumptions
• We seldom question old management assumption - traditionally
about control and compliance
– People are fundamentally inert/ inactive without external rewards
– Only way to get good performance is reward what you want and
punish what you don’t want (We can manipulate you, birddog
you into personal wellness so we can lower our health care
costs)
• Does manipulation work – You bet just look at the fortunes made
selling people cigarettes and junk food.
What do I have to do to get him to move
the way I want?
“Motivation 2.0” - Hey, it works With Animals
More Incentive More and Better Performance –
Right?
Externalized Locus of Control
Maybe a bit more “stick” would help would
get’em moving.
Indifference, Resistance or Gaming
Do Extrinsic Rewards Work
• Yes - In the short run (especially if you are a rat, pigeon or mule)
• For relatively simple mundane mechanical tasks
• Not good for tasks requiring rudimentary cognitive skill
• They narrow focus. Have been show to be ineffective; can actually
be associated with a decrement of performance
• MIT Study (financed by the Fed Res Bank)
• Rural India Study (Higher incentive led too worse performance)
• Israeli Day care Study – fine for lateness lead to more lateness
What Puts the Motivational Wind in Your Sail?
Maslow's Hierarchy of Needs
http://www.abraham-maslow.com/m_motivation/Hierarchy_of_Needs.asp
Social Learning Theory
http://web20.net23.net/_Media/reciprocal_determinism_med.png
Principles of “Social Learning “Theory
• Learning by observation (or vicarious acquisition) and
modeling.
• Observation of behaviors and their outcomes is a
mode of learning (vs. simply being shaped by the
environment).
• Learning does not require behavior change or
performance (learned tasks may be displayed now,
later, or never).
• Reinforcement has an indirect effect on learning.
• Cognitive processes influence learning.
Redesigning Health Incentives:
Lessons from Behavioral Economics
• “The effectiveness of incentive programs depends
critically on how the incentives are timed, distributed,
and framed, and several factors might make insurance
premium adjustments, the most common implementation
mechanism, less effective dollar for dollar than other
approaches.”
• “Findings of behavioral economics suggest that the
same decision errors that contribute to poor healthrelated behaviors can be used to “supercharge” incentive
programs so that they motivate behavior change more
effectively than simple premium adjustments do.”
Redesigning Employee Health Incentives — Lessons from Behavioral Economics. Volpp, KG, Asch, DA., et al,
NEJM,365;5, Aug 4, 2011
Extrinsic vs. Intrinsic Motivators
Extrinsic Motivation
• Carrots (Rewards)
• Sticks (Punishment)
Vs.
Intrinsic Motivation
Human nature is to be active and engaged. The behavioral science
literature shows that the best way to improve performance and
yield personal satisfaction is through these three factors
• Autonomy
• Mastery
• Purpose
Dan Pink on the surprising science of motivation, http://www.ted.com/talks/dan_pink_on_motivation.html
“Positive Psychology” of Health Behavior Change
•Old Paradigm (The Disease Model)
The reason for change is to lose weight and/or prevent disease.
Fear is used as a motivator.
Fear motivation is seldom sustained.
•New Paradigm (Positive Psychology)
The reason for change is pleasure, satisfaction, self-efficacy, selfrespect, personal development and a sense of purpose and
meaning (personal clarity on values).
Enjoyment, satisfaction and positive new experience is the
motivator.
Focus on mobilizing personal strengths and resources
It is sustainable and can become positively addictive (habit
forming).
Motivation 3.0
• Tap into people’s innate drive to do things
because they matter to them.
• People will expend great effort and generate
creative solutions to accomplish things they
have decided they want to do.
Incentive Balance
A 2008 cross-sectional study published in JOEM involving 124
employers, 882,275 eligible employees and 344,825 completed
health risk assessments (HRAs), showed that the strongest
predictors of HRA completion rate were:
– 1. Commitment to a culture of health
– 2. Comprehensive communications about the wellness
initiatives
– 3. Incentive value
A Cross-Sectional Analysis of Factors Associated with Employee Participation in Health Risk Assessments. JOEM, 2008
Incentive Balance
• The study showed that the commitment to a culture of health
and good communications about the wellness initiatives were
more powerful influencers to participation rates than the
value of the incentives.
• In fact, to achieve a 50 percent HRA completion rate,
employers with a low level of commitment and
communications needed an average incentive value of
approximately $120, whereas employers with a high level of
commitment and communications only needed approximately
$40.
3 Essential Elements of Sustainable Motivation
Autonomy: Providing people with freedom and flexibility to choose
how, when, and where they complete their work
Mastery: People have a desire to get better at what they do. Assigning
them a FLOW type formula where the work they are doing is matched
to their skill set but challenging enough to allow them to stretch and
grow, will improve intrinsic motivation.
Purpose: 0ur yearning to be part of something larger than ourselves.
People desire work that gives meaning to their lives.
Leaders who can create a culture and a working environment that
incorporate all three of these elements will cultivate a more motivated
workforce.
“Nudges” That Increase Engagement
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Personalized Messaging
Educational Messaging
Easy-to-Follow Directives
Interactive Tools
– Ongoing Response Tracking, Problem Solving and
Message Refinement
– Outcomes Measurement
– Proven Results
– Cost Savings
Winning Formula:
Teamwork, Camaraderie, Purpose, Self Mastery, Community
Sources
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Successful Preventive Medicine: Culture, Communication and Carrots .
By Ronald R. Loeppke, MD. January 1, 2011,
http://www.riskandinsurance.com/story.jsp?storyId=533328390
Predictably Irrational: The Hidden Forces That Shape Our Decisions. By
Dan Ariely.. Harper/HarperCollins Publishers, 2008.
How a Simple “Nudge” Could Increase Employee Wellness
Engagement and Reduce Wellness Program Costs. December 07,
2011, By Prashant Srivastava.
ttp://www.healthcarereformmagazine.com/article/how-a-simple-nudgecould-increase-employee-wellness-engagement-and-reduce-wellnessprogram-costs.html
Why Seeking More Money Hurts Happiness: Personal growth and
helping others are more likely to promote happiness than money and
status. By Philip Moeller, April 9, 2012 . U.S. News and World Report.
http://money.usnews.com/money/personalfinance/articles/2012/04/09/why-seeking-more-money-hurts-happiness
Sources
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Deci, E.E., Ryan, R.M., and Koestner, R. (1999). A Meta-Analytic Review of
Experiments examining the Effects of Extrinsic Rewards on Intrinsic
Motivation, Psychological Bulletin, 125, no. 6.
Kohn, A., (1999). Punished by Rewards: The Trouble with Gold Stars,
Incentive Plans, A’s, Praise, and Other Bribes. Boston: Houghton Mifflin.
Pink, Daniel (2010). Drive: The Surprising Truth About What Motivates Us.
Riverhead Trade.
More Carrot Than Stick: Employers are getting results by rewarding workers
for participating in wellness activities. September 2008, by Joan
Engebretson.
http://www.tcbmag.com/industriestrends/humanresources/104543p2.aspx
Nudge: Improving Decisions About Health, Wealth, and Happiness. By
Richard H. Thaler and Cass R. Sunstein, Yale University Press, 2008.
Redesigning Employee Health Incentives — Lessons from Behavioral
Economics. Volpp, KG, Asch, DA., et al, NEJM,365;5, Aug 4, 2011