Incentives and Motivation For Employee Health Management

1. 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

2. 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”

3. 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

4. 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

5. EHM can work! • Questions: • How to reproduce and optimize the effects? • How to make the intervention simultaneously generalizable, effective, efficient and sustainable?

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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?

12. 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.

13. What do I have to do to get him to move the way I want?

14. “Motivation 2.0” - Hey, it works With Animals

15. More Incentive More and Better Performance – Right?

16. Externalized Locus of Control

17. Maybe a bit more “stick” would help would get’em moving.

18. Indifference, Resistance or Gaming

19. 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

20. What Puts the Motivational Wind in Your Sail?

21. Maslow's Hierarchy of Needs http://www.abraham-maslow.com/m_motivation/Hierarchy_of_Needs.asp

22. Social Learning Theory http://web20.net23.net/_Media/reciprocal_determinism_med.png

23. 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.

24. 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 health-related 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

25. 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

26. “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, self-respect, 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).

27. 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.

28. 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

29. 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.

30. 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.

31. “Nudges” That Increase Engagement • Personalized Messaging • Educational Messaging • Easy-to-Follow Directives • Interactive Tools • Ongoing Response Tracking, Problem Solving and Message Refinement • Outcomes Measurement • Proven Results • Cost Savings

32. Winning Formula:Teamwork, Camaraderie, Purpose, Self Mastery, Community

33. Sources • 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 PrashantSrivastava. ttp://www.healthcarereformmagazine.com/article/how-a-simple-nudge-could-increase-employee-wellness-engagement-and-reduce-wellness-program-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/personal-finance/articles/2012/04/09/why-seeking-more-money-hurts-happiness

34. Sources • 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