MOTIVATING EMPLOYEES TO CHANGE

Size: px

Start display at page:

Download "MOTIVATING EMPLOYEES TO CHANGE"

Richard James
6 years ago
Views:

1 MOTIVATING EMPLOYEES TO CHANGE JAMES F. LOOMIS, MD, MBA DIRECTOR OF PREVENTION AND WELLNESS ST. LUKE'S HOSPITAL

2 WHY IS THIS IMPORTANT? Employees with modifiable lifestyle risk factors cost employers 228% more in direct medical costs than employees with lower risks (J Occup Environ Med 1998;40(10):843-54) Presenteeism due to disease associated with these lifestyle risk factors accounts for an estimated 28% to 56% of total costs (Pharmacoeconomics 2009;27(5):365-78) Return on investment for these programs, with benefit-to-cost ratios, ranging from $1.49 to $4.91(median of $3.14)

3 WHY IS THIS IMPORTANT? 87.5% of health care claims costs are due to an individual s lifestyle. (Indiana University-Purdue University, Fort Wayne (IPFW) Study, 2006) 3% of Americans adhere to all four of components of a basic healthy lifestyle (Aldana, SG The Culprit & the Cure: Why Lifestyle Is the Culprit Behind America s Poor Health and How Transforming that Can Be the Cure. Mapleton, UT: Maple Mountain Press) not smoking maintaining a healthy weight eating adequate fruits and vegetables getting physical activity

4 WHY IS THIS IMPORTANT? Less than 20% of workers have lifestyle improvement success rates (Allen, J., Building supportive cultural environments, O Donnell MP, editor, Health Promotion in the Workplace, Third edition, Albany, New York: Delmar Publishers, Inc, 2001, pgs ) Less than 25% of workers achieve their desired behavior change goals for more than a few months. (Ibid) For most wellness activities, the end of the activity also marks a precipitous decline in the health behavior and a return to unhealthy practice.

5 SOCIAL COGNITION MODELS Goal Setting Stages of Change Pre-contemplative Contemplative Preparation Action Maintenance

6 SOCIAL COGNITION MODELS Self-efficacy Tailored Messaging

7 SOCIAL COGNITION MODELS Risk perception is a component of all social cognition theories of behavioral change Not a good predictor Self-efficacy is an effective predictor of positive lifestyle change Stage theories of behavioral change recognize that lifestyle change is a process rather than an event

8 SOCIAL COGNITION MODELS Explains at best 50 per cent of the variation in behavior Assumes that behavior is always the result of rational choice Non-cognitive variables such as habit and enjoyment may play role in behavioral change

9 BEHAVIOURAL ECONOMICS

10 Economists have assumed that people s economic choices are always rational But they are not!

11 BEHAVIOURAL ECONOMICS Seeks to unite the basic principles of neoclassical economics with the realities posed by human psychology

12 BEHAVIOURAL ECONOMICS Necessary because: Our minds are finite and do not have unlimited information to solve problems We do not have all the time in the world to think about problems We struggle to analyze problems objectively when the outcomes directly affect themselves We view problems through a frame of personal experience warped by social or cultural bias. So we apply their own rules of thumb, or heuristics, which allow quick decisions

13 BEHAVIOURAL ECONOMICS Loss-Aversion Bias People tend to overvalue the prospect of losing something of value and undervalue the prospect of gaining something of value Status Quo Bias Inertia, or the tendency not to change, is especially significant when choices are complex, many choose the default Framing Bias How choices are presented has a substantial influence on the decisions people makerange of choices

14 BEHAVIOURAL ECONOMICS Social Norms Behavioral expectations and cues within a society or group Temporal discounting People place more weight on the present than the future, they re more attracted by immediate than delayed benefits and more deterred by immediate than delayed costs. Availability The likelihood of an event is assessed by the ease with which it can be recalled Optimism People overestimate the odds of rare events, causing them to be overly confident they ll win something

15 BEHAVIOURAL ECONOMICS Fairness People don t like things they think are unfair Storytelling Stories are more motivating than statistics. Motivation Intrinsic motivation, the internal pleasure or satisfaction we experience, is necessary for changing more complex behaviors

16 CHANGING BEHAVIORS Benefits design Make desired program the default (Status Quo Bias) Program Design HRA (Motivation) Include spouse/family (Social Norms) Health Coaching (Motivation)

17 CHANGING BEHAVIORS Build Environment Signage (Framing, Availability) Cafeteria, Vending Machines Communications , newsletters (Framing, Availability, Storytelling) Public recognition (Social Norms, Storytelling)

18 INCENTIVES PATIENT PROTECTION AND AFFORDABLE CARE ACT (PPACA) Cannot exceed 20% of the total cost of coverage (increases this to 30% in January 2014.) The program must be reasonably designed to promote health and wellness. Opportunity to qualify for the reward under the program at least once per year. The reward must be available to all similarly situated individuals. If employee can t satisfy standard due medical condition or if it is medically inadvisable, the individual reasonable alternative standard or waiver must be offered. Communications materials must clearly disclose the availability of the reasonable alternatives

19 INCENTIVES Participation Small tangible, frequent rewards (Temporal discounting) Progress Outcomes Structure incentive programs so that most employees have chance of succeeding, and everyone has the tools required to avoid penalties and receive rewards. (Fairness)

20 TYPES OF INCENTIVES Cash or Merchandise (Temporal Discounting) Tangible rewards at the time of participation may be more effective than a future reward Premium surcharges vs discounts (Loss-Aversion Bias ) The threat of paying more may be more effective that the reward of paying less Raffles or drawings (Optimism) HRA completion 64% with lottery vs 40% with cash Gamification (Social Norms)

21 WHAT WE DON T KNOW Does tying a financial incentive to health plan premiums or other plan design elements change engagement, employee health behaviors, health outcomes, absenteeism, disability, productivity, and other costs related to health care or productivity? Are there differences in behavior change or health outcomes over the short and long term? Is there an impact on the effectiveness of worksite wellness programming with the use of financial incentives tied to the health plan?

22 WHAT WE DON T KNOW What is the role of worksite culture and employer leadership support in improving participation, engagement, and outcomes? What are the most effective ways other than financial incentives to influence health behaviors in an employed population?

23 OTHER CONSIDERATIONS Health Literacy Assessment Knowledge Attitudes Self-efficacy Interest Surveys

24 BARRIERS TO SUCCESS Trust Time Money Convenience Stress Family and loved ones

25 QUESTIONS?

LEVERAGING BEHAVIORAL ECONOMICS IN HUMAN RESOURCES MANAGEMENT

LEVERAGING BEHAVIORAL ECONOMICS IN HUMAN RESOURCES MANAGEMENT J. David Johnson, MBA Vice President, Senior Consultant djohnson@sibson.com; 202.833.6482 Copyright 2015 by The Segal Group, Inc. All rights