Information Void Hampers Behavioral Economics Implementation

Information Void Hampers Behavioral Economics Implementation

Corporate Executive Panel Cites Inaccessibility of Academic Researchers' Insights

A panel of corporate wellness executives told a University of Pennsylvania audience about the implementation challenges of behavioral economics-based programs.

Academic researchers who are compiling large amounts of new knowledge about how behavioral economics principles can be applied to workplace health initiatives aren't making those insights available to company managers in a meaningfully useful manner, according to a panel of high-level corporate wellness executives.

The panel was part of the 2014 two-day Behavioral Economics and Health Symposium sponsored by the University of Pennsylvania's Leonard Davis Institute of Health Economics (LDI) Center for Health Incentives and Behavioral Economics (CHIBE), the Robert Wood Johnson Foundation, and the Donaghue Foundation. CHIBE is one of the country's largest centers of behavioral economics research.

Setting out the goals of the 90-minute session, moderator David Asch, Executive Director of Penn's Center for Health Care Innovation, asked, "What can we learn from (these executives) that can inform the kinds of research questions that (behavioral economics scientists) ask? What can panelists tell us about what is necessary for the work we do to be more relevant? What are the exciting challenges that (corporate managers) face that should become grist for the mill for the next round of research projects that we do?"

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The overall response from the panel made up of the former Chief Medical Officer of General Electric, former CEO of Weight Watchers International, and former PepsiCo Senior Vice President for Global Health Policy, was that corporate managers can't make sense of the large, widely scattered and rapidly changing body of academic literature on the subject.

Academic insights
"There's got to be a better way for behavioral economists to integrate the insights they generate in closer partnership with the company people who are actually designing these systems and putting them into place," said panelists and former Weight Watchers' CEO David Kirchhoff, who spoke at greatest length on this point.

He and the others noted there are thousands of journal papers on the subject but no effort beyond those separate, isolated publishings to synthesize or index the findings in a way that makes their knowledge accessible to industrial managers charged with designing and implementing behavioral economics-based wellness programs.

"Somebody has really got to write the behavioral economics field manual of what works and what doesn't," Kirchhoff told the assembled scientists. "We need something greatly simplified and codified that says, 'this tool works well for this application for the following reasons; and it doesn't work well for this other application for the following reasons.'"

Book for corporate managers?
"Think, 'Behavioral Economics for Dummies,'" Kirchhoff continued, acknowledging the laughter across the room. " I'm joking a little, but at the same time, I've been playing around in the genetics space recently and there actually IS a book called 'Bioinformatics for Dummies'. It's about the application of advanced statistical methods for querying the human genome. If they can make a 'For Dummies' for that, you can absolutely do one for behavioral economics." (See editor's note below)

Robert Galvin
Robert Galvin, MD, MBA, is an Operating Partner with Equity Healthcare of the Blackstone Group, the former GE Chief Medical Officer, an Adjunct Professor at Yale, a member of the Institute of Medicine (IOM), and a member of the Agency for Healthcare Research & Quality (AHRQ) Advisory Council.
David Kirchoff
David Kirchhoff, MBA, is Executive-in-Residence for Consumer Health at Warburg Pincus LLC, and the former CEO of Weight Watchers International. He also previously served as the Director of Corporate Strategy and Development at PepsiCo and as a manager at the Boston Consulting Group in Washington, D.C.
Derek Yach
Derek Yach, MBChB, MPH is Senior Vice President of the Vitality Group and Director of the Vitality Institute and the former PepsiCo Senior Vice President for Global Health. He is also a former Professor of Global Health at Yale and served as Executive Director for Noncommunicable Diseases and Mental Health of the World Health Organization (WHO). He was recently named Chair for the World Economic Forum Global Agenda Council on Aging.
David Asch
David Asch, MD, MBA, is Executive Director of the Penn Medicine Center for Health Care Innovation, a member of the CHIBE Internal Advisory Board, and Professor of both Medicine and Medical Ethics & Health Policy at Penn's Perelman School of Medicine, and of Health Care Management in The Wharton School.

Panelist Robert Galvin is a physician who spent 15 years as the Chief Medical Officer of GE before becoming a partner in Equity Healthcare of the Blackstone Group. Equity has five private equity firm clients that acquire large corporations with an eye to reorganizing and selling them. Employee health care costs are a key target of those reorganizing efforts and the reason Galvin has been so deeply involved in behavioral economics experiments and implementations.

Don't do it very well
"Everything we do in our insurance benefit design is behavioral economics -- we just don't do it very well," said Galvin. "What's really been difficult is the translation (from theory to practice). The issue is how do we take some of this wonderful research and turn it into practical applications?"

He noted the unanticipated complexities of such applications and cited a recent company case. It decided to try levying a penalty on employees who failed to engage with its organized wellness efforts, such as nursing calls to remind diabetics to take their medicine. The idea was that those who didn't engage would experience a 30% penalty in their health care premiums that would take effect in their next paycheck.

Shortly after the program started, "the outcry from employees was pretty amazing," said Galvin. "The HR department was full of complaining people and the nursing calls encountered the most disgruntled, chip-on-their-shoulder responses you can imagine."

Unanticipated complexity
"I loved the concept and it seemed like such a good idea to get people with diabetes to take their medications," said Galvin. "But it would have been a better idea to find out what will make them care about it. This application was too complex and somehow missed the kind of spirit it takes to draw employees in."

"It's time to take a step back and think clearly about what it is we're trying to do because there's really good news and bad news here," Galvin told the audience.

"The good news is that the momentum of behavioral economics is real. It's going to last. The bad is that the results of some current applications aren't coming in," he continued. "The theory is that if you use financial incentives in a smart way, you will get people to engage in a way they didn't before, and then they will change. And because they will change, these other positive things will happen. But I think it's likely we're not going to see that, employers will be disillusioned, and we're going to get all muddled up."

Thinking clearly
"That's why we need to write something addressing the issue of how to think clearly about the use of behavioral incentives in employee populations," Galvin said.

Panel moderator Asch suggested the issue of how to get corporate leadership to think about and adopt an appropriate behavioral economics strategy might itself be a behavioral economics question that researchers in the audience might want to explore further.

Panelist Derek Yach raised the issue of how involved academic experts should be in implementing the policy changes their research informs. He's Executive Director of the Vitality Institute, an international think tank focused on healthy lifestyles and prevention of chronic disease that is part of Discovery Limited, South Africa's largest health insurance company.

Getting academics more involved
"The opportunity I see, in addition to the wonderful research here," said Yach, "is that the world is moving very fast away from a purely public health paternalistic approach to addressing the public's behavior change where we need a more sophisticated understanding of how people are expecting to be more engaged in the decision making themselves. The challenge is going to be how can the behavioral economists not just do the experiments they're doing now but be engaged in the macro policy debates about saying what should change."

"For instance, what needs to be changed in the food environment?" Yach asked noting that behavioral economic efforts in areas like calorie labeling are interesting but "that's really not going to do it."

"One of the problems, obviously, is that we have too many calories in the food supply system," said Yach, the former SVP for Global Health of PepsiCo. "Eight years ago, people thought 'no company's going to agree to take out x number of calories from the food supply.' But now they have. They've taken out six and a half trillion calories representing 25% of the food supply and agreed to do it because the disincentives for them would have been an accelerated regulatory process with no end for where that would lead."

Behavioral economic insight
"I mention that because if you use economic principles to think through the mindset of what motivates change and how we go about our policies at a higher level, it would have a big impact on the food environment," Yach said. "At the moment we've got all of these silos: food companies framed as bad as the tobacco companies; a holier-than-thou public health community that brands everything whether it's local, organic, nutritious, healthy, gluten free, as being equivalent -- as if any of that's going to have much of an impact on obesity; and regulators sitting somewhere between being pressurized by the lobbyists and the NGOs not knowing what to do. I think some clarity around how we are so misaligned across the entire system -- which is a behavior economic insight -- would be incredibly helpful."

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Editor's note: There actually is a "Behavioral Economics for Dummies" book currently in print but it is not specific to employee population health issues.

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Hoag Levins is Editor of Digital Publications at the University of Pennsylvania's Leonard Davis Institute of Health Economics (LDI).