The Nation's Health Care Reform: It's Time To Focus On Incentives

The nation’s health care crisis -  Why is it happening? What can be done?  These are questions that have plagued us literally for decades.  As we try to fumble through the answers from better coverage, better technology, more access, more facilities, etc., we have lost sight of the single most important determinant of good health:  human behavior.  It sounds simple enough—in fact, it sounds so simple that it is often looked to as the last resort for improving health, not the first.   Prevention, wellness, personal responsibility and consumerism of health care are all terms have all been thrown out there.



What all of this really means is that what a person does or doesn't do, impacts their health more than any other health care factor.  So, where are we as a nation right now? We are at a point where many, many people don't do what they need to do.  Diet, exercise and smoking are critical health related factors. The challenge has been so great that many employers and insurers have begun offering incentives either through rewards or punishments to individuals to encourage them to engage in positive health behaviors.  Incentives range from subsidizing gym memberships, to funding smoking cessation programs, to offering gift cards for weight loss.  All are reasonable attempts to tackle important problems. But are we being naive? Are we focusing on areas that are necessary, but no where near sufficient, to have an impact on the health care dollar and the overall health of our nation?   Health related behaviors like diet, exercise and smoking are the most obvious, but they are not the most important in all cases.  Are we focused on these behaviors because we can't impact others?  Think about it for a moment, virtually every single health related action requires human behavior.  The following is a list of health care “procedures”:

· Cancer screenings- mammography, colonoscopy, prostate

· Vaccinations: childhood immunizations, flu, pneumonia

· Laboratory tests: hemoglobin A1c, glucose, cholesterol

· pap smear

· diabetic eye exams, diabetic foot exams

· medication refills

· annual physician appointments

· prenatal care

· well baby visits

· bi-annual dental examinations

· annual eye examinations

· post surgical wound care

Common denominator? Every single “procedure” is totally dependent on human behavior. The mammogram, colonoscopy and prostate exam happen if, and only if, the individual makes an appointment and shows up for the exam. Lab tests, vaccinations, medication refills- all the same. As straightforward as it seems, we have lost sight of the fact that just because these procedures are good for a person and are carried out by a medical professional, an individual remembers, takes the time and has the motivation to carry them out. We blame individuals for being “non-compliant” with medication regimens, disease management procedures and wellness actions. The reality is that for many individuals, the incentive to engage in these behaviors is small, very small.

If we are to look at the application of incentives for changing health care expenditures, then we must be able to look at the broad universe of health related behaviors. While it may not be necessary to create incentives for every behavior, restricting incentives to exercise and the completion of Health Risk Assessments significantly limits the impact an incentive program can have. In the end, every individual has a long “list” of health related behaviors that, if performed, will keep them healthy, make them well, manage their illness and ultimately, save money. Our challenge in incentive programs is to be able to create incentives across multiple behaviors when necessary. This process starts with the ability to “count” or track behaviors or medical transactions. If we can capture events like those listed above, we can know which behaviors are not occurring at desired levels. Once that is determined, we can then design very specific reward contingencies to increase the probability of those behaviors that are not occurring. The key to achieving this involves: 

1. The ability to connect simultaneously to medical transactions, pharmacy transactions, exercise engagement and other wellness transactions;

2. Having a reward currency that can apply across medical behaviors;

3. Tying the currency to a meaningful source of redemption; and,

4. Allocating the reward currency in a manner that follows the principles of behavioral science.

We must remember that if the rewards are not perceived as meaningful to the individual, then the entire incentive program will fail. This is a fundamental and often “botched” part of incentive programs. The evidence that money (cash) works to change behavior is based on research that typically compares cash incentives to no incentive. This is very problematic. Cash rewards are extremely limited by the demographic of the population at hand. Simply put- it takes different amounts of money to drive different individuals. We get caught in a bad trap of trying to pre-determine what is meaningful for different populations. We must avoid this. What is meaningful to any individual at any time cannot be accurately predicted. Thus, the most powerful means to reward an individual to change behavior is to let them determine the reward. Choosing their own reward makes the incentive much more powerful.

Tying into specific transactions, using a currency that can be applied across the widest range of medical behaviors and having rewards that are deemed meaningful by the individual, provides us with a means to target those medical actions that are in need of an incentive.

In the end, like it or not, the individual is what drives medical costs and outcomes. If we fail to consider this, then any efforts at health care reform will most likely fall short of the goals that are set. We have stressed technology and prevention for decades. Isn't it time we start asking the question- “Why aren't people doing what they need to do?” Isn't it time we start focusing on how to get people to do what they need to do?