by john ragland

Using psychological insight into human behavior to understand and influence economic decision-making: that’s the premise behind behavioral economics, a field which experts are now applying to the world of health outcomes.

But can behavioral economics improve health? Research from the University of Pennsylvania’s Kevin Volpp, MD, support the case for ‘yes’.

“Effective incentive programs can offset present bias by providing rewards that make it more attractive to make the healthy choice in the present.”

Kevin Volpp, MD, PhD

For over a decade, Volpp’s Center for Health Incentives & Behavioral Economics has been studying the potential of behavioral economics to promote healthy actions like quitting smoking, losing weight and taking your medications. Their research has shown that programs with incentives – when applied in the right way and context – can help patients take an active role in their own healthcare.

The Case for Improving Adherence through Behavioral Economics

If behavioral change expert Nir Eyal is correct when he says every product that needs a habit needs a hook, then medications for chronic disease are in desperate need of a two-ton anchor. Building the habits of routinely filling and taking medication as prescribed can be difficult, especially for drugs that need to be taken for years or even a lifetime.

“Not every business needs to create a habit, but every business that needs a habit needs a hook.”

Nir Eyal

Behavioral economics in application offers the potential to help patients build the essential habits to persist with a medication. And when patients take their medications as prescribed, two things happen: their outcomes improve, and their cost of care reduces.

Framing Behavioral Economics

Let’s frame behavioral economics in action, in a digital patient support program for patients with chronic conditions. At the core of the program should be these three partnered components:

Trigger: a prompt that captures a person’s interest and inspires him or her to take an action, such as: a pitch for an online support program, flagging an open task for completion, or a text message prompting a person to refill his or her medication. While triggers begin as external prompts, they can become internally generated.

Action: an act that directly or indirectly supports improved health, such as: signing up for a patient support program, watching an educational video, filling a script, or completing a survey.

Reward: something of value provided to the person as a result of their action, such as: health-related items or small prizes.

Supporting Long-term Habit Formation

External, extrinsic rewards can be highly effective in the short-term development of healthy habits, but according to behavioral economist Richard Thaler, the rewards themselves do not drive habit-forming action in the long term. Long-term habit formation is formed through doing what Thaler calls “small stuff” often enough to learn to get it right. Learning takes practice.

“We do small stuff often enough to learn to get it right. Because learning takes practice, we are more likely to get things right at small stakes.”

Richard Thaler

In a healthcare marketer’s case, if the goal is to help patients better adhere to their medications over long periods of time, then the program’s goal should be to help patients develop an intrinsic understanding of the medications’ value through ongoing education – the “small stuff”. Behavioral economics supports this long-term value formation by rewarding engagement with educational content in the short term.

Four Ways We Use Behavioral Economics to Improve Patient Adherence

At HealthPrize, behavioral economics is a core pillar of our approach. Here are four examples of how the HealthPrize platform uses behavioral economics to improve patient adherence:

1. Activities are offered as triggers, and points are awarded when people take action to complete them. Examples include signing up on the platform, taking a survey or quiz, or engaging with educational content. Points are earned and redeemed in the form of health-related items in the platform’s Rewards Mall.
2. Education is incorporated into the incentivized activities, so people learn while earning points. Daily tips and quizzes deliver valuable content—like information on the disease, treatment, and tips to form healthy habits—in a positive and engaging way. This is done in small bites and simple language that patients can easily and quickly absorb.
3. Lottery-type mechanics get patients to take action, with weekly prize drawings made available to patients who frequently log into the platform. The leaderboard shows rankings of individuals by points for patients motivated by competition. And streaks show patients how many consecutive days they took their medications; for some, keeping a streak alive serves as a powerful motivator for engagement.
4. All points awarded on the platform are variable; what an action offers today won’t be the same as what it offers tomorrow. Forfeited points are displayed on a scoreboard to reinforce this surprise element; this creates ‘fear of missing out’, which drives greater daily engagement.

No single behavioral economics principle will move the adherence needle by itself. A successful program requires an in-depth understanding of your audience, long-term assessment of the impact of your tactics, and clear and reachable targets – all of which HealthPrize has perfected over more than a decade of engaging patients with chronic conditions.