In their disjointed but best-selling book, Nudge, Richard Thaler and Cass Sunstein promulgate a trendy school of thought known as behavioral economics. The gist of their position is that bureaucrats are smarter than the rest of the “mindless Humans” (to use their term) and therefore obligated to manipulate our decisions to save us from our hopelessly irrational selves.
The manipulation is called a nudge — “shove” doesn’t sell books. The bureaucrats, those creating the nudge, are “choice architects.” Of course, truth be known, choice architecture has been around as long as Phillip Morris — longer even.
Thaler and Sunstein spin a web to persuade us that a hodgepodge of existing or proposed social initiatives have a common behavioral economics thread. Men’s-room hygiene, substance abuse, fast driving, organ donation, popcorn consumption, and 401(k) enrollment get lumped together as the playthings of choice architects who, for some reason that’s never made entirely clear, possess greater powers of reason than the rest of us.
The absence of any obvious connection between the various behaviors the authors choose to tackle makes the whole mess difficult to dispute. Inevitably, some of their tactics will serve us well. But does “nudging” men to aim for the center of a urinal qualify as behavioral economics? Is it really comparable to the complex problem of obesity? Is it anything at all?
Meanwhile, corporate-benefits-managers-gone-wild have taken the popularity of behavioral economics — and its zeal for financial incentives — as license to do whatever they want, brandishing their copies of Nudge like the torches of an angry mob. In employee wellness, this is most readily visible in schemes that offer financial rewards (often in the form of cheaper health insurance) to employees who reduce their body mass index — by whatever means possible (starvation, dehydration, and fad diets are known to work well) — lower their cholesterol and blood pressure, quit smoking, or excel in the employer’s or insurer’s notoriously flawed disease management programs. Employees’ failure or success is carefully monitored with blood draws, swab tests, and other biometric intrusions.
With a hubris that would make even Thaler and Sunstein blush, the human resources and benefits elite have dubbed their programs “outcomes-based wellness,” pressing home their point that true wellness does not manifest from behaviors like physical activity, healthy eating, and stress management, but by snatching some of your blood and shipping it off to the lab. (In fairness, it’s not all their fault. Employee benefits leaders have been worked into a frenzy by being assigned to control something — health care expenses — beyond their control. Desperation does not foster rational choice architecture.)
In fact, paying employees, or risk-rating their health insurance, for achieving pre-determined medical test results, is not an outcomes-based wellness program any more than paying a high schooler to increase his SAT score makes him a genius. No, these are not wellness programs at all. They are medical surveillance initiatives.
Employers are quick to point out that, in the insurance world, premiums have long been tied to levels of measurable risk. You pay more for homeowner’s insurance if you live in a flood plain, more for auto insurance if you’re a young male, and even more for life insurance if you smoke cigarettes or have out-of-range biometrics. But, then again, when your life insurer samples your blood, they don’t call it a wellness program. It’s risk-rated insurance — plain and simple. Wellness professionals should vehemently resist the euphemism “outcomes-based wellness,” as it undermines years of hard work genuinely promoting healthy lifestyles and achieving positive outcomes in an environment that respects employees.
Don’t be fooled. There is scant evidence that paying employees to achieve healthy outcomes, or penalizing them for unhealthy outcomes (Nudge’s preferred approach), is an effective strategy for improving health or controlling health care costs. Certainly there is not enough evidence to overshadow the research that suggests that incentives do not work either to motivate sustainable behavioral change or to improve health outcomes. Incentives may even reduce motivation.
In the words of The American Cancer Society, The American Diabetes Association, and the American Heart Association, published in their joint issue brief, Financial Incentives to Encourage Healthy Behaviors:
Based on evidence to date, … offering health promotion services such as smoking cessation programs, fitness centers, weight loss programs and exercise classes on-site, and offering healthy vending and food choices throughout the workplace environment will be more effective in improving employee health – and reducing employer health care costs – than applying financial incentives through their employer sponsored insurance plan.
Recycle your copy of Nudge — it will better serve society reincarnated as an eco-friendly fast-food container — and read the brighter and more evidence-based Drive (by Daniel Pink), or even Punished by Rewards, by Alfie Kohn, for the other side of the story.
Don’t Nudge. Drive.
Behavioral economics, formerly the darling of the Obama administration and, more recently, the Cameron administration in the UK, is gradually being nudged out of government. Only time will tell if this leads to the long overdue recognition of behavioral economics as the “Emperor’s New Clothes.” There’s nothing there at all.
Compare Nudge to Drive. Then you can make an informed decision about which approach (if you feel compelled to choose one) is truly most likely to evoke sustainable health behavior change. And, while you’re at it, consider which underpinnings — Nudges’s “libertarian paternalism” versus Drive’s “autonomy, mastery, and purpose” — are most likely to support other important business goals, such as employee engagement, trust, retention, and, ultimately, productivity.