Top 10 Reasons Your Health Incentive
Program Will Fail
Russell Benaroya
Co-Founder and CEO, EveryMove
russell@everymove.com
(206) 779-1359
October 20th 2013
INTRODUCTION
Rewards and incentives in health care is a hot topic today. Health rewards are a very
powerful means for inducing desired behaviors, and many studies have reinforced
the value of a healthy workforce on the top line and bottom line for corporations. It
is no longer a question of why employers should implement rewards programs for
their workers – the question today is how. Most employers have not yet figured out
how to do it right.
If you’ve been to Las Vegas, then you know how those casinos make you feel when
they give you a card that earns you free perks (ironically, more perks when you
continue losing). The notion of being incentivized in a way to influence behavior is
everywhere. Fly more, get status. Buy groceries, get gas. Spend money on your credit
card, get points. One thing these all have in common is that the intended behavior is
actually pretty easy (spend money, eat, gamble) but not necessarily good for you.
The challenge with rewards programs in health care is that the desired behavior is
actually harder to achieve (work out more, eat better, sleep more), and the incentives
to change just aren’t there.
Employers are at critical junction where health-driven rewards and incentives need
to be implemented, but programs risk becoming a black hole of dollars wasted.
Unfortunately, employers are leaning on some of the most basic reward techniques
in the book, which often results in an employee taking action for the money and a
missed opportunity to build a different kind of relationship with their most critical
resource: their people. It is not enough to “check the box” on offering a health
rewards program because most are probably failing.
TOP 10 REASONS WHY YOUR INCENTIVE PROGRAM WILL FAIL
1. Your rewards program doesn’t build loyalty.
Frequent, unexpected and delightful rewards make us feel “special” and “self
important.” Money is low on the list of reward value. Think about power,
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status, and recognition – we all seek more of this too. Making consumers
feel “special” while making smart healthy decisions will be critical.
2. Your reward is not correlated with the action you want.
We tend to significantly discount the value of a future reward vs. a smaller
reward that we might get today. Meaning $100 at the end of the quarter
might be just as powerful as $10 per month. Most health rewards are too
distant from the actual act of achievement that employees don’t assign the
level of value that you think they should.
3. Your rewards are too predictable.
If I know exactly what I need to do to get a reward, then I will do the
minimum required to achieve it. If that means just completing an HRA, I will
do so in five minutes. The concept of do this/get that rewards encourage the
shortest distance to get the reward because people are more focused on the
“that” than the “this”. Now/that rewards are much more powerful. Now that
you have achieved level “X” we are going to delight you with unexpected
reward “Y.”
4. The effort to change behavior is simply not worth the money
you are spending.
Dan Arielly, author ofPredictably Irrational, acknowledges that money might
be the most efficient reward, but it forces people to calculate in economic
terms whether the behavior change is worth it – and in health care it’s
usually not. Instead of $100 in a gift card, substitute it with something that is
hard to calculate (nice wine, a home team soccer jersey, dinner with spouse).
5. Your rewards don’t motivate.
Daniel Pink, author of Drive, asserts that motivation is the combination of
mastery, autonomy and purpose. If you want to motivate desired behavior,
is your rewards program triggering mastery, autonomy or purpose?
Consider rewards that get out of the financial realm and get into the social
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realm by creating rewards that employees will feel connected to and
remember the “why” when it comes to driving new behaviors.
6. Your rewards program actually encourages dishonesty.
As the quarter draws to a close for many companies, employees will often
rush to manually enter their health data to make sure that they “check the
box” on the requirement for the quarter. First, people tend to overestimate
greatly their self-reported activity. Second, the only behavior change it drove
was likely unintended. Smart rewards programs should link to verifiable
data sources and the technology (via smartphones and devices) is available
today to make that possible.
7. Rewards are not sustained.
According to Andrew Sykes, a well-respected wellness actuary, the reward
must be delivered on a sustained basis to promote the behavior long term.
Reward programs that give a 1x/year premium reduction or a 1x/year
incentive for completing a form will not drive any sustained behavior
change.
8. Your rewards signal that employees are lazy.
We have a skewed impression that employees are inherently lazy and need
money to motivate. The reality is that the minute you don’t have a financial
exchange, people tend to work harder. People are lazier when the money is
not aligned with motivation. Sure, for mechanical tasks without a lot of
thought, money can work. For desired actions that require some creative,
complex and cognitive skills, money crushes creativity. Healthy lifestyles can
be achieved in many different ways but traditional rewards tend to narrow
the possible actions.
9. Compared to other reward programs in people’s lives,
employer health rewards programs aren’t that fun.
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But they can be fun. Most administered rewards programs start with the
employer in mind, not the employee. Most lack the social benefit of rewards
(e.g. the ability to amplify the success) and achievers aren’t celebrated.
Consider strategies that will promote “around the water cooler” discussion
and inspire action in a way that is engaging, fun and social.
10. Your rewards are prescriptive.
Rewards that are tied to behaviors that are prescribed are too controlling.
For example, launching a “walking challenge” for people that hate walking
for fitness is a complete waste. Let people use their own creativity to find
ways to achieve better health that embeds into the fabric of how they live
their life.
Very few companies have cracked the code on health-related rewards and
incentives, because most assume that money will drive the intended behavior
change. Unfortunately, financial incentives not tied to motivating engagement will be
dollars wasted. That said, we cannot ignore the power of rewards all around us
today. What we can do is spend the time to make sure that a health rewards
program creates motivation beyond just the money. Progressive, innovative
companies will crack this code in 2014.
ABOUT THE AUTHOR
Russell Benaroya is the Co-Founder and CEO of EveryMove, a health rewards
program that allows consumers to turn their active lifestyles into rewards from their
health plan, employer and brands. Prior to EveryMove, Russell built a successful and
profitable healthcare business (REM Medical) that was sold in 2009. Prior to
healthcare entrepreneurship, Russell was Director of Corporate Development at
GoTo.com (Overture) and before that a private equity investor and investment
banker in New York. In 2009, Russell was recognized as one of the top “40 Under
40” by the Puget Sound Business Journal. To learn more about EveryMove
visit www.everymove.org or email Russell at russell@everymove.com.
EveryMove, Inc. | 411 Fairview Ave. North, Suite 200 Seattle, WA 98109