Training the Brain To Choose Wisely

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The human brain is wired with biases that often keep people from acting in their best interest. Now, some employers and insurers are testing ways to harness such psychological pitfalls to get people to make healthier choices.

[Behave] Wesley Bedrosian

Many companies have long paid employees to stop smoking or lose weight, but with limited success. So some companies are rewriting the rules for doling out financial incentives. Rather than encouraging good behavior with small or one-time payments, some health and wellness plans have begun enrolling employees in lotteries for a chance to win a bigger reward. Other programs are testing whether workers are more likely to make healthy choices if they've staked some of their own money on the outcome.

And some companies are battling people's natural inertia by repeatedly prompting them to decide whether to enroll in a mail-order prescription service, which saves money and gets some patients to take their medications more regularly. "We wanted to let that inertia work for us," says Bob Ihrie, head of employee benefits for home-improvement chain Lowe's Cos., which worked with pharmacy-benefit manager Express Scripts Inc. to launch the program.

Such approaches stem from the field of behavioral economics, which challenges the conventional economic doctrine that consumers always act as informed, rational decision makers. Instead, behavioral researchers have found, people often exhibit irrational, albeit predictable, biases that lead them not to act in their best interests.

Employers are drawn to such programs because of swelling health-care budgets and the idea that a healthier work force is less costly. Indeed, people's poor decision making is one of the biggest culprits behind major illness. Smoking, obesity and other preventable conditions contribute to 40% of premature deaths. And many people have trouble sticking to a regimen of pills that keep diabetes or high blood pressure in check.

MED3000, a Pittsburgh firm that provides billing and electronic medical-record services to doctors and hospitals, is exploring how to get more of its 1,600 workers to fill out health-risk assessments to be used to help guide them to its various wellness programs. The company is participating in a six-week experiment to test how well workers respond to the chance of a big prize, rather than a straightforward reward. The idea is to make use of people's tendency to overestimate small probabilities.

Most employees at the company are getting a $25 cash reward for filling out the assessment. A group of 200 workers receive an additional $25 grocery card. A third group, of 400 employees, is divided into five-member teams that are enrolled in a weekly lottery. If the team wins, each member gets $100, plus the regular $25 reward, but only if he or she completed the assessment. The winners list is widely emailed each week, making it clear who's won and who missed their chance. If all five members of the winning team filled out the survey, each person gets an additional $25.

Though the study is still under way, about 70% of the lottery group has completed the assessment, researchers say. That compares with 34% of those receiving the basic cash reward, and 43% of those getting an additional grocery card. The study is being led by McKinsey & Co. and researchers at the University of Pennsylvania and Carnegie Mellon University.

The research team plans another study with MED3000 and perhaps other employers of a weight-loss program that plays on the idea that people prefer avoiding losses to making gains. Participants will be asked to put their own funds at stake, up to $3 a day, toward meeting a monthly weight-loss goal.

That study builds on research published in the Journal of the American Medical Association in December that compared how much weight people lost depending on whether they staked small, daily amounts of their own money toward their goal or were enrolled in a lottery. Researchers encouraged the deposits by matching what participants invested. The money would be lost if the monthly weight target wasn't reached. After 16 weeks, the group that put up its own money lost an average 14 pounds (toward a 16-pound goal) and earned $378 each. Members of the lottery group lost 13.1 pounds and earned $272, and a group with no incentives lost just 3.9 pounds each.

Edward Neifeld, a 66-year-old army veteran, joined the study through the Philadelphia Veterans Affairs Medical Center. He says that as an off-and-on dieter for years, he had never cracked 230 pounds. But as he put at least $1 at stake a day, his weight dropped below 190 pounds by the study's end.

[Making us Behave]

"Sometimes I'd put in $3 just to show them I was going to do it," Mr. Neifeld says. Helping him stay on track: He was required to weigh himself daily and submit the result. Now, in lieu of the study, he adds, "I tell my wife every day what I weigh."

The Aetna Foundation, the independent philanthropic arm of insurer Aetna Inc., also is sponsoring a study of whether daily lotteries motivate people to stick to warfarin. The blood-thinning drug can sharply reduce the chance of stroke in high-risk patients if taken correctly, but researchers say as many as 40% of patients don't.

The study, conducted by University of Pennsylvania researchers, involves 100 people. Participants have electronic medical monitors that track whether they've opened the device's pill compartment and taken the medicine. Participants receive a text message overnight telling them if they won a $10 or $100 lottery, or if they would have won had they remembered to take their dose.

Frequent feedback or rewards are critical, "because people tend to grossly overvalue the present when it comes to costs and benefits," says Kevin Volpp, one of the study's leaders and director of the Center for Health Incentives at the University of Pennsylvania School of Medicine and the Wharton School.

If the results are compelling, the insurer hopes to integrate the approach into its health plans, says Lonny Reisman, Aetna's chief medical officer. "The structure and expense of a complex lottery system is challenging," he says. "Maybe this is something for people who are really at high risk."

General Electric Co., pleased with the outcome of a smoking-cessation study among 847 employees, next year expects to offer the program to all U.S. workers. In the study, employees who smoked got as much as $750 spread over a year if they quit. Nearly 15% did after a year, compared with 5% of those who didn't get incentives. The incentives, paid at three intervals, played on the appeal of regular incentives and were aimed at helping smokers overcome procrastination in quitting.

Write to Vanessa Fuhrmans at

Printed in The Wall Street Journal, page D1

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Aetna Inc.(AET)

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