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Of the many methods used to engage employees and reach your company's wellness goals — financial incentives, education, events and more — a new report suggests another way: Behavioral Economics.
The new Harvard Business Review piece is titled “Use Behavioral Economics to Achieve Wellness Goals.” It's written by David A. Asch, MD, professor at the Perelman School of Medicine and the Wharton School at the University of Pennsylvania and executive director of the Center for Health Care Innovation there, and Kevin G. Volpp, MD, professor at the Perelman School of Medicine and the Wharton School at the University of Pennsylvania and director of the Center for Health Incentives and Behavioral Economics there.
What is Behavioral Economics? According the University of Penn Center for Health Incentives and Behavioral Economics: “Behavioral economics is an academic field that uses principles of economics and psychology to examine how individuals make choices in complex contexts–such as personal finances and health–and seeks ways to improve their decisions and behaviors.”
The HBR authors write: “Employers, health insurers, doctors, and health systems increasingly recognize that everyday behaviors are among the most important determinants of health. How we live our lives — whether we smoke, exercise, take our medications, and wear seat belts — substantially determines how long we live and the health we enjoy. Everyone is interested in wellness, yet everyone’s first suggestion for achieving it is education.”
And while they acknowledge education is very important, they argue more is needed. They also feel more than financial incentives are needed to truly drive significant behavioral changes. That's because not all of our decisions are rational: “several decades of research reveal that many of our decisions don’t reflect rational choices, but rather irrational thinking that occurs in predictable ways. Experts in behavioral economics have been able to harness this predictability and lead us to the healthful behaviors we seek.”
What do they mean?
The piece states: “A key lesson from behavioral economics is that the size of an incentive matters far less than how it is framed and messaged, how it travels along existing pathways of social networks, and how it connects to individuals emotionally.”
The authors then provide implementation examples, including giving the reward upfront (say, in an account where they can see it), but then taking away that reward if the success measure isn't met.
They also suggest breaking rewards into smaller chunks and giving them more often, creating games, and leveraging technology.
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