Experts in Conversation: Unlocking Health Through the Magic of Behavioral Economics with Tanya Little, Chief Commercial Officer at Vitality
According to the Centers for Disease Control and Prevention, 23% of US adults fall into a “caregiver” category. Of those who categorize as caregivers, 31% report providing 20 or more hours per week of care.
This matters because being a caregiver often exacerbates the challenges many already face to care for themselves. In other words, “being healthy” is much harder than simply “getting 8 hours of sleep,” “eating your fruits and vegetables,” and/or “getting in your 10k steps a day.”
It why sitting down with Tanya Little, Chief Commercial Officer at Vitality, to talk about behavioral economics and how it impacts the care we provide to ourselves was a conversation worth diving into.
1. Your expertise is in behavioral economics. Can you explain what this means through the lens of care and well-being?
Simply put, the concept of a ‘rational economic being’ doesn’t represent how people make decisions in real life. The intrinsic behavioral biases that are innate to humans mean we often don’t make the best decisions for ourselves in the long term. And this is especially true when it comes to our health (and our money).
In a care and well-being sense, we see this manifesting as a healthcare wellness paradox. Healthcare (or, let’s call it sick care) is overconsumed because benefits are immediate (I receive medication and start feeling better) and price is hidden (I only see my bill months later, or maybe never if my health plan covers it in full). Wellness and preventive care, on the other hand, are under consumed because the price of the personal sacrifice is immediate (choosing the broccoli over the pie) but the associated benefits only manifest years down the line, and hence are less obvious or ‘hidden’.
As behavioral scientists, our job is to use mechanisms to tip the scale in favor of well-being and preventive care. Our goal is to encourage individuals to act in their best interest, keeping their future selves in mind, whether they want to maintain good health, prevent disease, manage a chronic condition, or navigate the healthcare system.
2. As humans, many know that to care for themselves properly, behaviors such as nutrition, physical activity, sleep, limited alcohol, etc. play a big role. At the same time, “healthy” is easier said than done. What tends to get in the way of making decisions that will positively impact our health?
To give color, let me call out a few examples:
- Present bias — as humans, we’re wired for instant gratification. And we prefer smaller, more immediate rewards over larger, delayed rewards. Nine times out of ten we’ll succumb to an extra glass of wine, knowing we’ll feel worse for it the next morning, and even worse in years to come if we’re unable to moderate our alcohol intake over the long term.
- Framing — we’re sensitive to how information is presented and make different decisions based on framing. This is why we reach for the 96% fat-free product, but hesitate over its 4% fat cousin, even though mathematically these are the same.
- Perceived effort — people are sensitive to friction points. Eliminating friction and implementing defaults can have a disproportionate impact on our behavior, without creating dissonance. Default opt-ins, like requiring someone to opt out versus asking them to opt in, eliminate the perceived effort and nudge people to take action.
To impact health positively, we need to acknowledge and work with — not against — these behavioral biases.
3. Are you able to provide a real-world example of how you’ve seen behavioral economics and care and well-being play out?
A good example relates to loss aversion, which is the principle that we dislike losing something at least twice as much as we like gaining something.
I work at Vitality (more on this later!), where we leveraged this principle to drive significant and sustained increases in physical activity across a group of 400,000 members in the US, UK and South Africa. In short, members were given a ‘free’ Apple Watch for a two-year period, with a corresponding set of activity goals. If they completed 100% of their goals each month, they weren’t required to pay their monthly Apple Watch installment. If they completed 50% of their goals, for example, they were liable for 50% of the monthly installment. A study validated by RAND Europe found that this Earn Apple Watch incentive increased weekly physical activity by 34% — almost a full workweek more physical activity among members. Furthermore, high-risk members saw a staggering 206% increase in activities, verifying that the impact was not contained to those who were already low-risk and active.
When the program’s mechanics were inverted, and members were required to pay their monthly installments upfront and receive rebates, the impact was far more muted.
4. It’s hard to refute the fact that communication plays a role in every facet of life. Can you provide an example of how you’ve seen communication succeed from a behavioral economics and care and well-being perspective?
As humans, we’re generally overconfident in our own abilities and prospects. This is why most people think they’re above-average drivers. This same overconfidence applies to our health, where we consistently overestimate our longevity and underestimate our health and morbidity risk.
Conveying the abstract concept of a person’s future risk using a straightforward number is a great way to address overconfidence bias. This was the impetus behind the development of Vitality Age, a representation of a person’s chronological age, risk-adjusted for their lifestyle behaviors and biometric outcomes. It’s easy for the brain to compute there’s an issue when confronted by a Vitality Age that dwarfs chronological age. We typically find this is a huge ‘aha’ moment that prompts swift action.
5. Let’s give a proper shout out to Vitality. Can you spotlight / share with us how the product offering ties together behavioral economics and care and well-being?
Vitality is a behavior change and decision science platform that uses data analytics, behavioral economics and technology to help people to make better decisions more often, both during and outside of care-seeking moments. We were borne of a health plan founded by actuaries in 1992 and now operate across 41 markets, serving 40 million members.
We know that almost a third of healthcare expenses in the U.S. can be attributed to modifiable risk factors (and this impact is elastic, increasing with age and chronicity). But most other players adopt blunt “do then get” approaches, which fail in both triggering change at the outset and sustaining it. These approaches also fail to account for the precise health value of specific behaviors, readiness to change and habits. And they’re predicated on an artificial disconnect between individuals’ lifestyle choices and the way they manage disease and seek care.
Vitality was built to change member behavior at the intersection of wellbeing and care, using a sophisticated understanding of incentive design and behavioral science to influence the modifiable behaviors that matter. That’s why we’ve helped our employer and plan clients in the U.S. manage the health risk of their populations and reduce claims costs by 4% on aggregate. In short, the model works!
Who Am I?
Dr. Colleen helps small business owners increase profit by decreasing employee turnover. She is a Contract for Hire Culture Leader focused on canceling standardized workplace well-being in order to get at what matters to employees: trust and respect. Her 360 Workplace Advocacy Framework is built on the foundation of Mental Health.
Resources
Vitality: The Antidote to Physical Activity
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