Cash Contracts Are Best at Improving Workers' Health

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Health care providers are experimenting with a new way of trying to get people to change their unhealthy habits and quit smoking: by offering them cash. Researchers, of late, have been finding cash incentives are a good way to incentivize people to kick their unhealthy habits. Take this recent study, led by Scott D. Halpern, MD, PhD, an assistant professor of medicine, epidemiology, and medical ethics and health policy.

They enrolled 2,538 participants across the United States in an eight-month program to help them quit smoking. They were split into five groups in which participants would receive rewards based on individual performance or group performance, be charged $150 up-front with subsequent matching funds, compete with other participants’ deposits and matching funds, or be provided free information on how to quit smoking.

Halpern reported the results in a press release, saying:

“We found that the reward-based programs were more effective than deposits overall because more people accepted them in the first place.”

Many more participants were willing to stick around (about 90 percent) for the reward program than they were for the deposit-based programs (14 percent). However, he continued on to say:

“… among people who would have accepted any program we offered them, the deposit contracts were twice as effective as rewards, and five times more effective than free information and nicotine-replacement therapy, likely because they leveraged people’s natural aversion to losing money. With such unprecedented rates of success, the trick now is to figure out how to get more people to sign up — to feel like they have skin in the game.”

Senior author Kevin Volpp chimed in, saying that companies could start thinking about offering reward incentives for employees to stop unhealthy habits and take up healthier ones. He explained:

“When compared to the estimated $4,000 to $6,000 incremental annual cost associated with employing a smoker over a non-smoker, a $700 to $800 incentive paid only to those who quit seems well worth the cost.”

The trick for researchers now will be how to optimize these reward-based programs to tune them for different behaviors and kinds of people.

Gretchen Rubin says that there are 21 strategies for changing your bad habits into good ones, but the best kind incorporate treats.