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Rising healthcare costs are a threat to the country through our growing debt, and to companies through their bottom line. One of the most effective ways to bring down costs is to eliminate preventable sources of disease, primarily obesity.According to Cleveland Clinic CEO Dr. Toby Cosgrove, obesity accounts for 10 per cent of all healthcare costs, and that will rise to 20 per cent over the next decade.
It’s going to be increasingly important that businesses get proactive about the epidemic.
The combination of fewer health related absences and lower rates of chronic and preventable disease are a powerful argument. One way companies have attempted to intervene is by offering incentives for employees to go to the gym, eat healthier, or aim for specific health targets.
The real challenge is getting those healthy behaviours to stick. A new experiment, one of the first ever large scale studies on workplace health incentives, from Heather Royer of UC Santa Barbara, Justin Snydor of the University of Wisconsin, and Mark Stehr of Drexel University tests a novel, behaviorally based approach to the problem.
The authors write:
Our experiment was conducted with 1,000 employees at the headquarters of a Fortune 500 company. Randomly‐selected employees were offered a one‐month financial incentive to attend the company’s on site exercise facility ($10 per visit for up to 3 visits each week). After the completion of this incentive period, this incentive group was randomised into two groups – one offered the opportunity to create a self‐funded “commitment contract” and the other not. This commitment contract allowed individuals to pledge that they would continue to use the gym over the 2 months following the original incentive period. Individuals could put as much of their money at stake as they wished. If the employee kept to the commitment, her money was refunded and otherwise it was donated to the United Way.
There are a few important behavioural insights at play here. The first is that efforts at becoming healthier often fail because of a high “startup cost,” the cost of joining a gym and the high level of initial physical discomfort. By helping to pay for memberships or providing a facility, businesses can overcome the first. By offering a financial incentive, they can help overcome the second.
The payments also help overcome the “projection bias;” that is, that people don’t realise that physical discomfort will decrease over time. The payments help them get over that bump so they don’t give up before they really start.
The financial incentives doubled the rate at which employees used the gym. However, the effect in the long term was less, there was only a 16 per cent increase in gym attendance.
That’s what makes the commitment contract so important. The people who need that push to get to the gym may have self-control issues that make it more likely that they’ll drop off, reducing the program’s effectiveness.
The group that had the combination of financial incentives and the optional commitment contract had a 47 per cent holdover rate of greater gym attendance,, even after the incentives expired. There were lasting, sizeable effects a year after the experiment.
The behaviorally effective way for businesses to get employees to the gym is to lower the entry barriers, help them over the initial bump, and offer them the opportunity to keep themselves accountable. All of these are things that could be experimented with and extended over a longer period. Given the effects, it’s definitely worthwhile to try.
Find the full paper here.