Do you think you could stop smoking if you were handsomely rewarded for quitting? Could you abstain from sweets and carbs if you were being paid for each pound you lost? If you were forced to pay a fine when you committed to working out but bailed, would you think twice about being a no-show? The big underlying question is whether monetizing one’s health pays off.
In an ideal world, medical care would not depend on financial rewards. Virtue, as they say, would be its own reward. But sometimes virtue alone is not enough—and a little cash sweetens the deal. Emerging research suggests that strategic health bonuses, or fines, may be an effective way to encourage weight loss, increase exercise and support quitting smoking.
A body of research suggests that financial incentives are a viable form of encouragement. They’ve even made their way into health reform. According to Scientific American, the 2010 Affordable Health Care Act permits employers to brandish rewards—or to exact penalties—worth up to 30 percent of health insurance premiums for employees who meet certain health targets. Targets include quitting smoking or getting their blood pressure below a certain measure.
The upshot? Money, in and of itself, is motivating for most everyone.
As of 2018, eighty-six percent of employers offer financial incentives in their wellness programs, according to a survey from the National Business Group on Health (NBGH) and Fidelity Investments. Employers also increased the size of available incentives from last year, the survey found. Average annual wellness incentives grew from $742 in 2017 to $784 in 2018, both way up from the average of $521 in 2013, indicating that the strategy may help attract participants to these high-value initiatives.
Private companies are also getting in on the health commitment action. For example, the web-based company stick.com, whose mission is to redefine goal setting, lets users sign commitment contracts to lose weight, exercise or quit smoking, along with other personal goals—and pay up if they default. In other words, they utilize the psychological power of loss aversion and accountability to drive behavior change.
But what happens when the money is gone? A growing body of public health research shows that financial incentives work wonders for promoting healthy outcomes like losing weight and quitting tobacco, but most often the effect evaporates soon after the payment periods ends. Here’s a closer look at two of the most pressing -and recalcitrant-lifestyle problems in America, and how financial incentives may help.
How Money Rewards Affect Health Behavior
In a recent study, investigators analyzed 33 randomized controlled trials. The studies included more than 21,600 people in eight countries and looked at whether financial incentives helped people quit smoking. The amount of incentives used in the trials, ranged from between $45 and $1,185. The researchers found that after six months or more, people who received financial rewards were about 50 percent more likely to have quit smoking than those in the control groups.
Money — either getting it or losing it—can make the difference to someone’s weight-loss success. Research out of the Mayo Clinic found that people who had financial incentives tied to their weight loss (they got paid $20 or penalized $20, depending on whether they met their monthly target) lost an average of nine pounds over the course of the study, compared to just two pounds in the group with no monetary perks.
While such research is promising, it’s unclear whether incentives can work long-term and motivate sustained behavior change. The harsh truth is that for most people, when the incentive disappears, the behavior reverts. So it may be most useful to think of incentives as a complement, rather than a substitute, for an action plan.
Incentives may help your commitment to an action plan, but you still need an action plan. Just don’t forget that your action plan is just as important as the incentive. Once an action plan is in place, then by all means figure out what kind of incentives work best for you and how you can use them to stay motivated.