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Should we pay people to look after their health?

With the Tony Abbott government expressing concern about the growing health budget and emphasising personal responsibility, perhaps it’s time to consider some creative ways of curbing what Australia spends…

The key to using incentives may be to do so with a high enough frequency to create healthy habits. Health Gauge/Flickr, CC BY-SA

With the Tony Abbott government expressing concern about the growing health budget and emphasising personal responsibility, perhaps it’s time to consider some creative ways of curbing what Australia spends on ill health. One solution is to pay people to either get well or avoid becoming unwell in the first instance.

The United Kingdom is already doing this kind of thing with a current trial of giving mothers from disadvantaged suburbs A$340 worth of food vouchers for breastfeeding newborn babies. And from January 1 this year, employers in the United States can provide increasingly significant rewards to employees for having better health outcomes, as part of the Affordable Care Act.

But should people really be paid to make healthy choices? Shouldn’t they be motivated to improve their health on their own anyway?

Encouraging right decisions

People don’t do what’s in their best interest in the long term for many reasons. When making decisions we tend to take mental short cuts; we allow the desires and distractions of the moment get in the way of pursuing what’s best.

One such “irrationality” is our tendency to focus on the immediate benefits or costs of a situation while undervaluing future consequences. Known as present bias, this is evident every time you hit the snooze button instead of going for a morning jog.

Researchers have found effective incentive programs can offset present bias by providing rewards that make it more attractive to make the healthy choice in the present.

Research conducted in US workplaces, for instance, found people who were given US$750 to quit smoking were three times more successful than those who weren’t given any incentives. Even after the incentive was removed for six months, there was still a quit rate ratio of 2.6 between the incentive and control groups – 9.4% of the incentive group stayed cigarette-free versus only 3.6% of the control group.

A refined approach

Still, while research on using financial incentives to encourage healthy behaviours is promising, it isn’t as straightforward as doling out cash in exchange for good behaviour.

Standard economic theory posits that the higher the reward, the bigger the impact – but this is only one ingredient to success. Behavioural economics shows that when and how you distribute incentives can determine the success of the program.

Here are a few basic principles to consider. First, small rewards can have a big impact on behaviour if they’re provided frequently and soon after the healthy choice is made. We have found this to be true in the context of weight-loss programs, medication adherence, and even to quit the use of drugs such as cocaine.

Games of chance are an effective way of distributing rewards as research has found people tend to focus on the value of the reward rather than their chance of winning the prize. Many people think that a 0.0001 and a 0.0000001 chance of winning a prize are roughly equivalent even though in reality they are vastly different probabilities.

Finally, people are more influenced by the prospect of losses than by gains. Studies show people put much greater weight on losing something than gaining something of a similar value.

In one weight-loss experiment, for instance, participants were asked to place money into a deposit account. If they didn’t achieve their weight goals, the money would be forfeited, but if they were successful, the initial deposit would be doubled and theirs to keep.

Reluctant to lose their deposits, participants in the deposit group lost over three times more weight than the control group, who were simply weighed each month.

Creating good habits

Incentives are particularly effective at changing one-time behaviours, such as encouraging vaccination or attendance at health screenings. But with increasing rates of obesity and other lifestyle-related diseases, we need to focus on how incentives can be used to achieve habit formation and long-term sustained weight loss.

We know financial incentives can increase gym usage and positively impact weight, waist size and pulse rate, but how to sustain gym use after the incentive is removed? The key may be to use incentives to achieve a high frequency of attendance for long enough to create a healthy habit.

We also need to consider how we can leverage social incentives, such as peer support and recognition, together with new technologies to maximise the impact of incentive-based programs.

Innovative solutions, like paying people to encourage the right health choices, may help to reduce both the health and economic impact of Australia’s growing burden of disease.

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35 Comments sorted by

  1. Rey Tiquia
    Rey Tiquia is a Friend of The Conversation.

    Honorary Fellow, School of Historical and Philosophical Studies at University of Melbourne

    Encouraging people to make the right health choices through 'innovative solutions' like giving them material incentives is not as good as providing them with sound spiritual incentives like giving people a good idea of what ' good health' is all about. You can find an example of this spiritual incentive in this link <<http://www.preventativehealth.org.au/internet/preventativehealth/publishing.nsf/Content/submissions-public-cnt-a-1/$File/D12-2008.pdf>>;

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    1. Rey Tiquia
      Rey Tiquia is a Friend of The Conversation.

      Honorary Fellow, School of Historical and Philosophical Studies at University of Melbourne

      In reply to Rey Tiquia

      It seems that the material that I am referring to has been taken out of that website. Hence I am placing it here:
      TASKFORCESUBMISSION: submission
      NAME: Rey Tiquia
      POSITION:
      Scholar / Practitioner of Traditional Chinese Medicine
      ORGANISATION:
      Alliance of Chinese Medicine Associations of Australia
      SUBMISSION1 ‘ Treating Disease By Preventing Illness’ ̃ ̃ ̃ -The Yellow Emperor

      The establishment of the Preventative Health Task Force to tackle chronic diseases brought about by obesity, excessive…

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  2. Sandor von Kontz

    farmer

    Mahybe minister Nash instead of scrapping the food health rating website should have promised to pay every user $1

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    1. Jane Middlemist

      citizen

      In reply to Sandor von Kontz

      Yes, not original but true I think: 'prevention is better than cure"
      and, one might add, a whole lot cheaper.
      More fun as well.

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    2. Robert Tony Brklje
      Robert Tony Brklje is a Friend of The Conversation.

      retired

      In reply to Sandor von Kontz

      Yes, it seems personal responsibility stops at the corporate door where profits are concerned. Perhaps Tony Abbott should consider the idea that corporate executives take personal responsibility for, the ingredients they put in their foods, how those foods are prepared and the marketing associated with those foods. It seems that the LNP idea of personal responsibility is, screw you customers let them eat junk falsely labelled as quality food and ensure your responsibility to your investors bank account and as for the cost, well, the taxpayer will foot that bill, har, har, har.
      It seems as long as you are generating a profit you don't have to take any responsibility for your products because that is the fault of those idiots sucked into buying as a result of false advertising. Makes my blood boil to think of that idiotic smirking face as he makes stupid pronouncements like that.

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    3. Jan Burgess

      Retired

      In reply to Robert Tony Brklje

      Whilst I like your idea of CEOs taking personal responsibility and agree that most, if not all, do not do so, I totally disagree with your assertion that only one side of politics encourages this.

      NO political party has made any meaningful effort to rein in the corporate behemoth.

      Also, caveat emptor is a valid saying. While you seem keen for the corporations to take some responsibility, the same should be required of consumers.

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    4. Jane Middlemist

      citizen

      In reply to David Arthur

      And at the open gates, not even a single sentry standing guard against exploiters and robbers …

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    5. David Arthur

      resistance gnome

      In reply to Jan Burgess

      "While you seem keen for the corporations to take some responsibility, the same should be required of consumers."

      In other words, should consumers be obliged to distrust food companies? I thought we funded Department of Health to conduct the research for us, and to make the results publicly available.

      Corporations know perfectly well the health impacts of every ingredient they put into their products - they have the resources to pay qualified staff to research this - whereas consumers, for the most part, must actively take time out of possibly busy schedules to research every such ingredient.

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    6. Robert Tony Brklje
      Robert Tony Brklje is a Friend of The Conversation.

      retired

      In reply to Jan Burgess

      Caveat emptor is a Roman saying, from a time when there were privatised fire brigades and when they would arrived at your home when it was on fire, they would offer to buy it at a steep discount, if you accepted their say $1 in $10 price, they put out the fire, if you did not they just let it burn.
      Now come on, seriously a couple of thousand years on don't you think we should have evolved beyond caveat emptor, hmmm.

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    7. Robert Tony Brklje
      Robert Tony Brklje is a Friend of The Conversation.

      retired

      In reply to Robert Tony Brklje

      PS
      I forgot to mention, yes, I am a member of the Green Party and being the only truly genuine conservative party in Australia not only seeking to conserve the environment but also conserve resources, conserve workers, conserve families and conserve the promoted Australian lifestyle not just the marketing of the Australian lifestyle.
      They have most certainly made every effort to reign in corporations, to reign in false advertising and to reign out corporate cash from Australian politics. Also promoted a universal access digital network to give all Australians equal access instead of Rupert Murdoch network and only serious money buys real access and most Australians are specifically excluded.

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    8. Sue Ieraci

      Public hospital clinician

      In reply to Jane Middlemist

      Prevention is certainly better than cure, but it;s a myth that better preventative medicine reduces the acute care spend - it does the opposite.

      The problem is this: unmet need.

      There is no objective level of ''enough'' health care - the better lives we live, and the longer we live, the greater our expectations, and the greater our risk-aversion.

      Having people living longer, healthier lives does not mean that we will no longer need to treat heart disease or do hip replacements - it means…

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    9. Jane Middlemist

      citizen

      In reply to Sue Ieraci

      Perhaps we will need to look closely at the types of acute care offered in advanced old age. As you rightly point out, we die anyway at some point so the justification for heart surgery, cancer treatments and expensive medical interventions of all sorts could be replaced for the very old with less costly options such as "keeping the patient comfortable", pain relief, and so on.
      It obviously makes no (economic) sense to spend enormous amounts on surgery etc if the person is going to die very soon…

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    10. Jane Middlemist

      citizen

      In reply to Sue Ieraci

      P.S. Another idea I've been wondering about, Sue, is this: were more resources devoted to preventive strategies and if, as a consequence, less were spent on interventions during a person's first two thirds of life, the "savings' could be invested and then spent on medical care in the last few years of life?
      Also, it might be necessary for those people to have insurance specifically for end-of-life care. Actuaries could work out the costs and benefits.
      Of course, we should still endeavour to educate, encourage, bribe, persuade, people so that they take practical steps to avoid illness (in partnership with their health professional).
      I am in favour of empowering people - as far as possible - to take responsibility for their own health and wellbeing as a 'quality of life' investment not just the economic aspect of health, bearing in mind the effect illness has on those close to the patient - partners, children, and so on.

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    11. Sue Ieraci

      Public hospital clinician

      In reply to Jane Middlemist

      ''if, as a consequence, less were spent on interventions during a person's first two thirds of life, the "savings' could be invested and then spent on medical care in the last few years of life? ''

      Great idea - if only we knew, in advance, what the trajectory of each person's life would be. How could we possibly know when the first two thirds of their life would be?

      And what if someone did ''all the right things" (didn't smoke, wasn't morbidly obese, ate well) but still got breast cancer, or gall stones, or even diabetes, in relatively early life? Should they forego treatment because not every condition is preventable?

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  3. Fiona McLeod

    Citizen

    Really interesting article. The crux of it is how to sustain better health behaviour. When I read that only 10% of the incentive group stayed off cigarettes, as opposed to only 4% of the control group, I thought that 10% is not a great success rate in the scheme of things. But maybe if you do a cost benefit analysis of those 10% of people not using the health system vs the incentive payments then it is worth it. That would be interesting to know.

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  4. Ryan Farquharson

    Research Officer

    "Finally, people are more influenced by the prospect of losses than by gains. Studies show people put much greater weight on losing something than gaining something of a similar value."

    Hmm, I wonder whether the threat of losing access to Medicare or private health insurance rebates would work? Seems like a win win to me. Shape up, live a better life and be less of a burden on the health budget. Don't shape up and you don't end up costing the health budget anyway.

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    1. Jane Middlemist

      citizen

      In reply to Ryan Farquharson

      Ryan, threats might work as you say: interesting idea. Another idea I've read about is "wellness clinics" where one visits the GP at regular intervals before one is sick. The GP is paid for these visits, giving advice, doing tests etc with the aim of "keeping people well" - which is more than just preventing illness.

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    2. Sue Ieraci

      Public hospital clinician

      In reply to Ryan Farquharson

      So, if someone is unable to give up smoking, and gets emphysema, but can't afford to self-fund health care, do we just let them die?

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    3. Sue Ieraci

      Public hospital clinician

      In reply to Jane Middlemist

      Jane Middlemist - GPs already do all this. Preventative measures, including immunisation, blood pressure checks, weighing and blood sugar checks are part of family medicine. One needs an ongoing relationship with a regular GP or group practice to benefit from them - not random visits.

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  5. LP Hock

    Retired

    Health cost is past expenditure revisited by Government and the tax payers. The simple observation is the Bell curve study of population incurring the public health costs. The chronically ill population, with not a large proportion in numbers, will take the huge chunk with mid portion of geriatrics taking another chunk. The incentive to promote proactive healthy lives is not governmental but a social development of healthy cultures. And that should start at infant level. It is not the failure of…

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    1. Elizabeth Bathory

      9-5 project drone.

      In reply to LP Hock

      You may not consider yourself a burden now, LP, but just wait until your body starts shutting down due to the inevitability of old age. In line with your logic that it is not the responsibility of "the strongest countries to help alleviate the poorest, sickest countries out of their own travesty", what attitude should young professionals like myself have toward 'geriatrics' like you who are overloading the health system that my taxes fund?

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    2. Elizabeth Bathory

      9-5 project drone.

      In reply to Elizabeth Bathory

      Edit: the world has changed since it was feasible for a single breadwinner to provide financially for an entire family and still have time to pursue leisure, purchase a house of one's own, and still be able to afford healthy food. The financial pressure on society's most vulnerable is such that people, out of necessity, have to sacrifice their health in order to afford the essentials like housing and education, given that full-time stable employment is so few and far between these days.

      Your comment…

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    3. Elizabeth Bathory

      9-5 project drone.

      In reply to Lynne Black

      I am always open to constructive feedback, Lynne - please indicate where I have been impolite?

      If it is where I suggest that LP is not qualified to comment on something he knows little about, I have supported my assertion with a specific reference within the publication that I also linked within my response.

      Have I missed something else?

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    4. Lynne Black

      Latte Sipper

      In reply to Elizabeth Bathory

      Maybe awareness comes with age.
      All those "geriatrics" you wish to pull the taxation plug on - who do you think were paying taxes all their lives to support you when you were still in nappies?
      Maybe you don't intend to grow old? Good luck with that.

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    5. Elizabeth Bathory

      9-5 project drone.

      In reply to Lynne Black

      I used the term 'geriatrics' in parentheses in verbatim reference to LP's own usage of the term.

      My explications of healthcare usage by older people was to refute LP's assertion that the "chronically ill" people with an "inability to change their lifestyle contribute the [sic] dilemma".

      If you read my comment about pulling the taxation plug in full, you will note that it is directed at a specific group of older people who lament public funding of the healthcare of people who they consider to be 'unworthy', and who should have 'taken responsibility' for their own health before they 'decided' to become unwell.

      If you believe in personal responsibility for one group, the logic should hold for all. There's nothing impolite about that.

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    6. Anna Young

      Project Manager

      In reply to Lynne Black

      We were all once young, the lucky ones will also grow old. However, it is noteworthy that:
      1) childhood is less costly on balance than old age;
      2) the cohort that is now entering the peak stage of their socially supported expenditure has changed the landscape to their benefit many times along the way and will again in this stage of life;
      3) the generation following is much smaller, but will likely be asked bear the substantial cost of the unhealthiest, yet longest living generation thus far.

      The need to support prevention, rather than just take a completely laissez-faire approach is pretty self-evident.

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    7. Jan Burgess

      Retired

      In reply to Elizabeth Bathory

      @Elizabeth

      Rather than having a go at us, you might find it more productive to lobby government to change the law on euthanasia.

      Most of us geriatrics, whether we're "selfish and self-righteous" or not, would much rather pull the plug ourselves when/if we become a burden - but we're not allowed to. Fix that, and your taxes can be used on your own generation.

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    8. Jane Middlemist

      citizen

      In reply to Anna Young

      I agree Anna, and I think healthy habits, (care of teeth as well, often left out of health - debates), need to start as early as possible.
      Very old people often need more 'health care' in their last few years than in all the preceding years.
      However, it's my belief that those who live a health promoting life as long as they can, will be less likely to have heart problems, fractured hips etc in their old age than those who have had risky habits most of their lives and approach old age already in a fragile condition.

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  6. Anne Powles

    Retired Psychologist

    Whilst some incentives regarding obvious health dangers, such as smoking, may be helpful as may be general community messages about lifestyle choices, to reward or penalize individuals may send messages that we have more control over our individual health than we do and thus make people feel guilty when they are ill. Having a sick family member with a BRACA 1 gene and a fit, healthy 41 year old neighbour with a good lifestyle in hospital after a heart attack, I would hate either of them to feel it was their fault.

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  7. Iain Cummings

    Civil Engineer

    Interesting article & I accept the human behaviour issues. I accept helping people who need help. I do not agree with the concept that government should always being responsible for people and giving handouts to encourage good behaviour. Whatever happened to people being responsible for their own actions?

    If the government is going to start using financial incentives to encourage good health then how about they start with STOPPING the incentives for poor health. Car usage is heavily subsidised…

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  8. David Carwardine

    Checking at A818

    Eyes on the balls, in our perfect there is no carrot without stick. Carrot first as we are so nice and then. In this perfect World how many carrots before. remember what they can do to you they can do to me and unfortunately for what they can do to me they can force upon you.

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