Behavioral economics has acquired a certain degree of mystical respect in our intellectual lives with the writings of Gladwell and others—two recent Nobel Prizes in Economics were awarded for this subject. It advises us on how to place objects in grocery stores (candy near the cash register) and similar behavioral recommendations, among them the use of incentives to motivate behavior.
During the Bloomberg administration, the New York City Department of Education utilized cash incentives in inner city failing schools to motivate grade school students to do better on the annual standardized tests. The program was a stunning success; children, in exchange for $30 or $40, achieved much improved test scores—the teachers were also rewarded with small cash bonuses for the improvements in their students’ scores. Similar programs were utilized nationwide to motivate minority underserved high school students to take advanced placement courses and to achieve passing scores in exchange for $100-$500 per test. Not only did these students do well on the tests, but there was also improvement in their SAT scores and grade point averages. Naturally, the New York City program was abandoned because of pressure from the UFT (children should only learn because of internal desire; teachers should not receive individual rewards).
In the early 2000s, about 20% of the 150,000-160,000 employees of General Electric were cigarette smokers and were causing significant lost work time due to tobacco-related illnesses. As a result, a unique experiment was launched, led by Kevin Volpp, a Professor of Medicine at the University of Pennsylvania and Professor of Behavioral Economics at the Wharton School. The usual rate of tobacco cessation in smokers is about 1-3% per year under normal circumstances. Volpp’s study recruited 878 GE employees who were smokers who were all given information about smoking cessation programs. They were then randomized to two groups. One group had no further intervention, while the experimental group was provided with financial incentives: $100 for completion of a smoking cessation program, $250 for being cotinine free on a urine test at 6 months, and an additional $400 for being cotinine free at one year (cotinine is a chemical the body makes after exposure to nicotine that remains in urine for at least a day after smoking). What happened? The smoking cessation rate was 15% at one year in the experimental arm versus 5% in the control arm—a truly remarkable result. Most trials for pharmacologic intervention are happy if they achieve smoking cessation rates of 7% or 8%. While many of those who initially stop smoking soon resume, the cessation rate in this trial at 18 months was still 9.4% versus 3.6%. Two other trials by Volpp and colleagues confirmed the utility of money as a motivating factor for tobacco cessation in other populations as well.
Volpp has extended the paradigm of behavioral economics and incentives to other medical situations also. Most interesting has been its use to encourage weight loss. An initial study at the Philadelphia VA Medical Center randomized individuals with body mass indexes between 30 and 40 to either a control group or one of two financial incentive plans. There were weigh-ins every 4 weeks for 16 weeks with the goal to lose one pound each week. At the end of the 16 weeks, the control group lost 3.9 pounds on average, while the financial incentive groups lost 14 pounds on average. Unfortunately, when the incentives were removed, the weight was rapidly regained.
Is it unethical or distasteful to use financial incentives to encourage positive behaviors, as I alluded to in the case of the Department of Education? Such incentives are all around us in our capitalist society—sales discounts, two-for-ones, Black Friday, etc. And are they not utilized in the healthcare environment as well? Co-pays have become a normative financial disincentive to deter medical consumers from making free use of the emergency room, clinics, medications, and other potential products that the healthcare system can provide. This is also a manifestation of behavioral economics.
Another financial disincentive is provided through taxation. Perhaps the most powerful tool in the battle against cigarette consumption has been the imposition of taxes by both the federal and state governments. While their motives are not totally pure (they do benefit from significant revenues), the resultant cost of a pack of cigarettes has been a major deterrent to cigarette consumption, particularly among the young. Some health policy makers opine that this has been the single most effective anti-tobacco intervention in recent years.
Investing in good preventive practices saves money in the long run, of course- an investment now in tobacco cessation will prevent lung surgery and expensive chemotherapy and hospice care 30 years hence. The Talmud tells us that doing the right thing not for its own sake will ultimately lead to doing the right thing for its own sake (Pesachim 50).
Alfred I. Neugut, MD, PhD, is a medical oncologist and cancer epidemiologist at Columbia University Irving Medical Center/New York Presbyterian and Mailman School of Public Health in New York.
This article is for educational purposes only and is not intended to be a substitute for professional medical advice, diagnosis, or treatment, and does not constitute medical or other professional advice. Always seek the advice of your qualified health provider with any questions you may have regarding a medical condition or treatment.
