Social vs. Financial Incentives: The Burning Question In Employee Wellness

Today’s Webinar Hosts

Rajiv Kumar, M.D.
Founder & Chief Medical Officer
rkumar@shapeup.com

Shawn LaVana
Vice President of Marketing
slavana@shapeup.com

Elise Meyer
Marketing Associate
emeyer@shapeup.com

Copyright © 2012 ShapeUp, Inc. Confidential & Proprietary. 2

Join the Conversation on Twitter

@shapeupdotcom

#wellnessincentives


Our Company’s Mission

Creating a healthier world by
leveraging social influence to
engage people in healthy activities


Today’s Agenda

• Current State of Wellness Incentives

• Employer Perspectives

• Financial & Social Incentives Research

• ShapeUp’s Approach to Incentives

• Key Takeaways

• Questions & Answers


The Current State of
Employee Wellness Incentives


Incentives are popular, but formats differ
n=22 n=16 n=13 n=12
100%
$1,000+
Results
HSA
No contribution
80 $500-$700

Prizes
$300-$500
60

Discount
Participation
40 on
Yes premiums
$100-$200

20

Cash
$1-$100

0
Offer incentives Basis of Average Format of
incentive amount incentive
(per yr)

Average
375
amount
Average Annual Incentive = $375

Mixed results with financial incentives
Employee Participation by Program, 2011
50%
46%
45%

40

30

With Incentives
25%

20 19%
16%
Without Incentives

14%

10

0
HRA Biometric Disease
Participation Screening Management

Source: 2011 Towers Watson/National Business Group on Health Staying@Work (n=335)


Moving toward penalties and outcomes
Employers Using Penalties Employers Using Rewards or Penalties
in Their Wellness Programs Based on Health Outcomes

100% 100%

80 80

60 60
No
No

40 40

20 20

Yes
Yes
0 0
2009 2011 2012E 2011 2012E

Source: 2011 Towers Watson/National Business Group on Health Staying@Work (n=335)


Health care reform expands incentives
Section 2705 of the Patient Protection and Affordable
Care Act (ACA)

• Beginning in 2014, employers may use up to 30% of total health
insurance premiums (50% at the discretion of the secretary of health
and human services) to provide outcome-based wellness
incentives.

• Rewards can “be in the form of a discount or rebate of a premium or
contribution, a waiver of all or part of a cost-sharing mechanism (such
as deductibles, copayments, or coinsurance), the absence of a
surcharge, or the value of a benefit that would otherwise not be
provided under the plan.”


What are social incentives?
• Teamwork (social support)

• Competition (friendly)

• Public recognition (social status)

• Peer pressure (accountability)

• Social norms (company culture)

• Altruism (helping others)


Employer use of social incentives
Social Networking
• 42 percent of high-performing companies
plan to incorporate some element of social
networking into their employee health
initiatives by 2012.

Wellness Competitions
• “This year, for the first time, workplace
competitions (individual or team competitions
for weight loss, physical activity, or other
goals) are among the top five program
elements in several regions. This reflects the
rapidly growing popularity of such activities,
as employers seek new ways to motivate and
challenge employees to improve their health,
leveraging social psychology and peer
motivation.”

Sources: Towers Watson 2010 Healthcare Report, Buck Consultants 2010 Global Wellness Survey


Employer Perspectives
on Incentives


Erica Ullman
Wellness Program Manager
Life Technologies Corporation


How We Use Incentives

U.S. Medical Engagement Wellness
Plans in Health Incentives
Improvement

Full replacement Qualifying activities Non-tobacco use
consumer directed plans for employee and spouse: premium discount (10%)
with health savings • Health Assessment Health Savings Account
account: • Biometric Screenings Contributions:
1. HSA Plus Plan  preventive exam ($100)
2. HSA Standard Plan  health coaching ($100)
 biometric results ($400)

Planning and decision support tools


What We’ve Learned

2010 Action
Preventive exams Engaging employees who
increased are not enrolled in
medical plan (18%)
Health risk & screening

What Didn’t Work
What Worked

values from yr 1 to yr 2 Offering incentives for just
have improved or participation; employees
remained flat wanted to be rewarded
for results & performance
The “I kept going
because I didn’t want to
let my team down”
Factor


Kenneth Foresti
Health & Wellness Consultant
kenneth.foresti@excellus.com


• Health insurance premium incentive of $520/year is tied to
health screenings

• Premium incentive is available to all employees of Excellus
Health Plan and those of select subsidiaries.

• Online wellness incentive program designed to encourage
individuals to take a more active role in managing their health
and well-being.

• Earn up to $500 for an employee of Excellus Health Plan and
those of select subsidiaries and up to an additional $500 for
employee’s spouse or domestic partner by participating in the
online wellness incentive program.


Health Screening Participation: HRA/Wellness Profile Participation:
Excellus Health Plan Employees and Excellus Health Plan Employees and those
those of select subsidiaries of select subsidiaries

90% 70%
80% 60%
70%
50%
60%
50% 40%
40% 30%
30%
20%
20%
10% 10%
0% 0%
2005 2006 2007 2008 2009 2010 2011 2005 2006 2007 2008 2009 2010 2011

Year Year

Key: Key:
Blue - No or minimal premium incentive Blue - Non-wellness incentive years
Green - $520 health insurance premium Green - Wellness incentive years (2008 pilot)
incentive


Cindi Solomon
Employee Wellness Operations Manager
cindi.solomon@nationwidechildrens.org


• Medical insurance premium discount
• $20/pay; $520/year
• Annual health risk assessment during benefits open enrollment.
Discount applied first six months of the year
• Employees actively participate in ShapeUp’s physical activity
challenges. Discount applied second six months of the year

• Program enrollment incentives

• Program participation and completion incentives

• Payroll deduction “promissory note”


• Communication is key
• Must have buy-in and collaboration with other departments
• Benefits
• Payroll
• Marketing

• Employees should have some “skin” in the program
• Enrollment incentives are useful for boosting enrollment
numbers; not so great for sustained engagement or program
completion
• Depending on the value of the incentive employees may view
the program as mandatory


Bryce Williams
Director, Wellvolution
bryce.williams@blueshieldca.com


Aligned Incentives

2011 Discount:

Tier 1 (<$34K) $240
Tier 2 ($34-54K) $396
Tier 3 (>$54K) $720

2012 Discount:
Tier 1 (<$34K) $504
Tier 2 ($34-54K) $804
Tier 3 (>$54K) $1,200


Shape Up Shield

1400

1200

1000
Participants

social wellness is:
800
 “sticky” - significant
alumni retention
600
 “viral” – strong newbie
400 adoption

 “popular” – one
200 program = 40% of BSC
employees
0
SUS1 SUS2 SUS3 SUS4

Alumni Newbies


Employers seek three wellness goals
1. One-time actions
Health assessment, biometric
screening completion

2. Ongoing actions
Regular exercise, healthy
eating, ongoing engagement

3. Outcomes
Reaching and sustaining
milestones or biometric results
Weight
(e.g. BMI threshold, blood Loss
pressure)


Financial Incentives:
The Research


Financial incentives produce weight loss
Financial Incentive–Based Approaches for
Weight Loss

• Objective: Do behavioral economic theories work for
weight loss?

• Design: 57 overweight participants aged 30-70,
randomized to 3 weight loss plans: monthly weigh-ins,
lottery incentive, deposit contract, with goal of 1 lb a week
for 16 weeks

• Results: Control group (3.9 lb), lottery group (13.1 lb),
deposit contract (14 lb). Incentive participants weighed
significantly less at 7 months (9.2 lb), controls did not.

• Conclusion: Financial incentives produced
significant weight loss over 16 weeks that was not fully
sustained. Longer-term evaluation of incentives is needed.

Kevin G. Volpp, MD, PhD et al, JAMA. 2008;300(22):2631-2637.


Even small incentive amounts can work
Testing the Effect of Different Levels of
Financial Incentives on Weight Loss Among
Overweight Employees

• Objective: Test ability of modest financial incentives to
encourage weight loss in overweight employees
• Methods: Randomized, measurements at baseline, 3, and 6
months and two levels of incentives ($7 and $14 per
percentage point of weight lost)
• Results: At 3 months, participants with no financial
incentive lost 2 lbs, $7 group lost 3 lbs, and $14 group lost
4.7 lbs. Between baseline and 6 months, when financial
gains were equalized, weight losses were similar across
groups.
• Conclusion: Modest financial incentives can be effective in
motivating overweight employees to lose weight, but results
may not be sustainable.

Finkelstein, Eric A. PhD et al, Journal of Occupational and Environmental Medicine, September 2007


Lessons from behavioral economics

• How people perceive immediate vs. delayed rewards
• Mental accounting and benefit of not bundling rewards
• Structuring incentives as rewards vs. penalties


Summary of financial incentives research
• Financial incentives work well for one-time actions

• They can produce short-term outcomes (e.g. weight loss)

• Even relatively small amounts can work

• Long-term sustainability is unproven

• Behavioral economics offers key lessons:
• Immediate vs. delayed benefits
• Mental accounting
• Rewards vs. penalties


Social Incentives:
The Research


Social incentives for weight loss (1984)
Weight Loss Competitions at the Work Site:
Impact on Weight, Morale and Cost-
Effectiveness

• Objective: Test competition as an incentive for weight loss

• Methods: Three team-based weight loss competitions were
held in workplaces; one was inter-company, the other two
were intra-company.

• Results: Attrition was less than 1%, weight loss averaged
12.1 lbs. Participants reported positive changes in morale and
employee/management relations, and both considered the
competition important to the success of the program. The
cost-effectiveness ratio ($2.93 per 1% reduction in percentage
overweight) was the best at the time.

• Conclusion: Teamwork and competition are effective
motivators for weight loss and lead to other positive outcomes
in a workplace setting.

K D Brownell et al, American Journal of Public Health, Vol. 74, Issue 11 1283-1285, 1984


Social incentives for weight loss (2009)
A Statewide Intervention Reduces BMI in
Adults: Shape Up Rhode Island Results

• Objective: Evaluate weight loss outcomes
• Methods: Measure weight loss achieved among 3,311
participants in Shape Up RI, a 16-week workplace-based
exercise and weight loss team competition.
• Results: 7 lbs, 30% achieved clinically significant weight
loss of 5%, shifted the BMI distribution from mean of 29.4
to 28.2 and reduced the obese population from 39 to 31%.
Weight loss maintenance at 10 months was 73%.
• Conclusion: Team-based, weight loss competitions can
produce weight losses in large numbers of participants
and may be sustainable long-term.

Rena R. Wing, et al , Obesity (2009) 17 5, 991–995.


Peer recruitment and social support
Benefits of Recruiting Participants With Friends
and Increasing Social Support for Weight Loss
and Maintenance

• Objective: Determine the benefits of social support for weight
loss and maintenance
• Methods: Recruited participants (N = 166) either alone or with 3
friends or family members and then randomly assigned them to a
standard behavioral treatment with and without social support
strategies.
• Results: Participants recruited with friends and given social
support had greater weight losses at 4-months (20 lbs) and 10-
months (19 lbs) than those recruited alone (15 lbs and 12 lbs). In
those recruited alone, 76% completed and 24% maintained
weight loss in full through month 10. When recruited with friends
and social support, 95% completed and 66% maintained weight
loss in full.
• Conclusion: Recruitment with friends and social support led to
greater weight losses and longer-term sustainability.

Rena R. Wing and Robert W. Jeffery, 27 July 1998.


Outcomes spread with social incentives
Teammates and Social Influence Affect
Weight Loss Outcomes in a Team-Based
Weight Loss Competition

• Objective: Investigated the effects of teammates and
social influence on individual weight loss and exercise
outcomes
• Method: 12-week, team-based wellness competition
• Results: Overweight/obese completers lost 4.2% of initial
body weight. Weight loss was similar among teammates.
Having a greater percentage of teammates in the weight
loss division and reporting higher social influence for weight
loss were both associated with greater weight loss.
Clinically significant (5%) weight loss tended to cluster
within teams.
• Conclusion: Weight loss and the behaviors that lead to it
are likely contagious, and harnessing and maximizing
social influence for weight loss enhances outcomes.

Tricia Leahey et al, Obesity, Feb 2012.


Summary of social incentives research
• Can produce significant health outcomes

• Often lead directly to other positive, non-health outcomes

• May produce more long-term sustainability than financial
incentives

• Outcomes via social incentives have been shown to be
contagious, spreading from person to person


Linking Social &
Financial Incentives


Synergies with social & financial incentives
Monetary Contracts in Weight Control: Effectiveness
of Group and Individual Contracts of Varying Size

• Objective: Test individual vs. group monetary contracts for
weight loss

• Methods: 89 overweight males (aged 35-57) assigned randomly
to 1 of 6 groups for 15 wk weight loss program with goal of 30
lbs total loss. Each involved a deposit contract. Groups varied in
amount of deposit ($30, $150, $300) and type of contract
(refunds contingent on either individual or group performance).

• Results: Group contracts produced significantly more weight
loss (31.1 lbs) than individual contracts (26.8 lbs) and the
difference was maintained over 1 year (18.5 lbs vs. 14 lbs).
Larger deposits led to larger outcomes, but short-term
advantages rapidly disappeared.

• Conclusion: Linking financial incentives to social incentives
produced the best weight loss and long-term maintenance.

Robert W. Jeffery et al, Journal of Consulting and Clinical Psychology, Volume 51, Issue 2, April 1983


ShapeUp’s Approach to
Wellness Incentives


Build the foundation on social incentives

1 Teams and groups
2 Competitions & challenges
3 Peer-to-peer recruitment
4 Facilitate conversations
5 Public expression
6 Peer encouragement
7 Status & comparison


Add financial incentives in three key ways

Reward Progress

Reward in Real-Time

Reward Social Actions


Reward progress to sustain engagement
• Give employees ability to earn rewards for
making measurable improvements, moving in
the right direction
• Carries more weight than participation alone,
and puts focus on the journey not just the
destination
• Rewarding progress keeps people engaged
and gives all employees a fair chance to play


Maximize impact with real-time rewards
• Don’t make employees wait: reward
them in real-time when they take an
action or reach a milestone

• Technology has made this logistically
possible

• Smaller amounts in the present can
carry more weight than larger amounts
in the future

• Increase the impact and effectiveness
of your incentives without increasing
your budget


Use financial rewards for social actions
• Encourage peer-to-peer
recruitment (e.g. reward
invites)

• Promote peer support
(e.g. reward captains,
peer-to-peer challenges)

• Leverage accountability
(e.g. team completion
rewards)


Final Thoughts


Key Takeaways from Today’s Webinar

 Financial incentives work for promoting one-time actions.

 Short-term financial incentives produce outcomes but are not
clearly sustainable.

 Smaller, real-time, progress-based rewards, de-coupled
from larger costs, leverage behavioral economics principles to
boost engagement and outcomes.

 Social incentives produce equivalent outcomes and may offer
longer-term sustainability.

 Financial and social incentives can be synergistic, more
powerful together than alone.


Let’s Continue the Conversation

About ShapeUp
We leverage both social and
financial incentives to drive
employee behavior change. Our
evidence-based platform covers two
million people at over 200 employers
and health plans.

Contact Us
Visit www.shapeup.com, email Dr.
Kumar at rkumar@shapeup.com,
or call our office at (401) 274-1577.


Social vs. Financial Incentives: The Burning Question In Employee Wellness

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