4 Ways to Boost Benefits & Wellness Results with Behavioral Econ


Successful young business people walking together in the same diThe new book The Power of Fifty Bits: The New Science of Turning Good Intentions into Positive Results by Bob Nease, PhD, is the first practical guide to help business leaders apply the principles of behavioral economics (sometimes called “Becon” for short) to workforce engagement issues.

The framework of seven strategies explained in the book is most powerful when the strategies are combined. Here is a rule of thumb for how to combine them:

1 “power” strategy + 1 or more “enhancing” strategies + uber strategy

Example 1: Retirement savings participation, contribution rate, and investing allocation

  • Power strategy: Let It Ride (Default)
    When employees become eligible for the 401(k) plan, automatically enroll them with a default contribution rate (for example, 3% of pay) and a default investment option (for example, a target-date fund of funds). Apply auto-escalation once each year to increase their contribution rate by 1 – 2% of pay until they reach a relatively healthy rate (for example, 15% of pay).
  • Enhancing strategy: Piggyback It
    Use humorous videos to deliver the serious messages about the defaults in a fun, memorable way. This makes learning about saving and investing a side effect of being entertained.
  • Uber strategy: Simplify … Wisely
    For both the auto-enrollment stage and the annual auto-escalation, use wording and a format that makes it very easy to let these defaults happen. Do allow employees to opt out if they really want to, but don’t make it too easy for them — for example, require them to read fine print, sign a waiver, and maybe even call for free financial counseling. For employees who do opt out, recognize that their reasons are often temporary; therefore, once every year or two, send non-participants a super-easy reply postcard with a simple checkbox that allows them to opt in to the default choices. (Research has found that 10 – 25% of people will opt in each time you send the cards.) 

    Results: Most large companies have already adopted this approach over the past decade or so, with around 90% of employees allowing the auto-enrollment and allowing auto-escalation to gradually boost them to a double-digit savings percentage. As a result, this is an easy-to-understand application of behavioral economics, which is why I share it first.

Example 2: Narrow network of health care providers

  • Power strategy: Require Choice (Active Choice)
    Narrow networks can result in lower prices for health care services, as well as fewer instances of unnecessary/unsafe services and errors. However, implementing a narrow network can cause disruption and complaints among employees, and/or prompt employers to offer costly incentives. Rather than mandating that certain higher-cost providers are excluded from the network, contact participants to let them know that unless they make a one-time choice to “opt in” to using those providers, the providers will be out-of-network.
  • Enhancing strategy: Set the Frame
    Rather than starting from the framework of a narrow network of cheaper providers, develop the network and communicate it with the goal of high-quality care at reasonable prices. Many providers charge exorbitantly more for the same medical services, and they often incur significant unnecessary expenses.
  • Uber strategy: Simplify … Wisely
    In simple written and/or verbal communications, inform participants that if they’d like to opt in to continue using the excluded providers, they must call by a certain deadline. (In other words, make it less easy for them to choose the suboptimal option.) 

    Results: When using this approach to implement narrow networks of pharmacies, Express Scripts found that 90% of participants voluntarily accepted the lower-cost providers. Only 10% make the effort to call and choose to continue using the higher-cost providers.

Example 3: Physical activity (for example, a walking program)

  • Power strategy: Lock in Good Intentions (Pre-commitment)
    Promote participation in a walking or other physical activity program that occurs on a regular basis over a period of time, and invite them to sign a pledge to participate.
  • Enhancing strategy: Piggyback It
    For a program for employees of Express Scripts, the activity was a group walk (providing social interaction with co-workers) with the company’s senior leaders (providing an opportunity to engage with leaders outside the office).
  • Uber strategy: Simplify … Wisely.
    On the pledge form, gather each participant’s contact information, and then send them a calendar appointment via email or mobile to ensure the group walk is reserved on their schedule. 

    Results: When this approach was tested on employees of Express Scripts, the pledge approach increased participation by 250%. Over 80% of people who attended an initial educational meeting signed the pledge to participate, and 63% of those who pledged actually showed up to walk.

Example 4: Medication compliance and pricing

  • Power strategy: Require Choice (Active Choice)
    Mail-order pharmacies have been shown to improve therapy adherence, use of lower-cost medications, and dispensing accuracy. Generic drugs and step-therapy programs typically provide the same health benefit as more expensive drugs, at a lower cost. Briefly stop participants who are purchasing certain drugs at a retail pharmacy, and ask them to choose whether to participate in mail-order and/or automatic generics and step-therapy.
  • Enhancing strategies: Set the Frame and Get in the Flow
    Most employers use the term “mail-order,” which reminds people of a Sears Roebuck catalog — and comes across as a risky, slow way to receive something so vital to their health. Instead, use the term “home delivery,” which triggers memories of convenience, high-quality service, and the pleasure of receiving something desirable. For participants who do not respond to an initial mailing, flag the pharmacy system so the participant is required to call the pharmacy benefit manager (PBM) before picking up their next prescription.
  • Uber strategy: Simplify … Wisely
    Allow the participant to make the choice just one time, and get their permission to have the PBM take responsibility for obtaining a revised prescription from the patient’s physician each time it is required. 

    Results: Express Scripts has implemented this approach with hundreds of its clients over the past five years, with 88% of maintenance-medication participants choosing home delivery, and over 93% of participants choosing generics.

Three of the strategies in the behavioral economics framework — Set the frame, Piggyback It, and Simplify Wisely — typically require expert communication talent to achieve optimal results. Contact us to learn how our team at Aspendale Communications can help.

Jesse Lahey, SPHR, is the host of the podcasts Engaging Leader and Workforce Health Engagement, and he is CEO (chief engagement officer) of Aspendale Communications. Connect with him on Twitter, Facebook, or LinkedIn. If you know anyone who would benefit from this information, please share it!


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