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Applying Behavioral Economics to Corporate Wellness

New Thinking About What Motivates Employees to Change 

Behavioral economic theory has been applied throughout history to help “steer” consumer behavior in certain directions. Retirement savings, shopping patterns, and approaches to risk are all common examples where these theories have come into play to get people to take steps to have a positive impact on them over the long term.

These same theories of behavioral economics are applied to the nation’s healthcare system, specifically employer-subsidized insurance policies and the corporate wellness programs that are paired with these policies in an effort to contain costs.

This paper, co-authored by Christian Moreno and produced by Lockton Companies, examines the following themes:

  • A continuous rise in chronic conditions and simultaneous increase in healthcare costs despite lucrative incentives incentives suggests more dramatic tactics are necessary.
  • The healthcare “wedge” that separates consumers from the direct cost of their care is a major factor that limits their motivation to participate in wellness programs, as well as their ability to understand and manage their own healthcare costs.
  • Economic theory suggests that disincentives, or penalties, are more effective when it comes to eliciting behavior change and will also help put the consumer closer to the costs of care, thus reducing the healthcare wedge.
  • New allowances in the Patient Protection and Affordable Care Act (health reform) present significant opportunities for employers to design wellness programs that are more penalty/outcomes-focused.
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