Penn Medicine's David Asch Testifies Before Senate

Penn Medicine's David Asch Testifies Before Senate

Committee Explores the Effectiveness of Employee Wellness Programs

David Asch's Congressional Testimony

See 15-minute excerpt of David Asch's remarks.

​Although the potential benefits of employee wellness programs are often overblown, the potential for the ultimate success of such programs is increasing as scientific experiments discover new ways to more effectively design these health plan elements, Penn Medicine's David Asch told a U.S. Senate panel last week.

A University of Pennsylvania professor, Executive Director of the Penn Medicine Center for Health Care Innovation and a widely recognized national authority in the evolving field of behavioral economics, Asch, MD, MBA, was one of four top experts to testify on the subject before the Committee on Health, Education, Labor and Pensions. That hearing came at the end of a decade in which more than three quarters of the country's largest employers launched wellness programs as part of their health benefit plans but generally failed to achieve the full range of either the health outcomes or financial benefits originally expected.

Chronic illness risk factors
"Unfortunately, it's a lot easier to know what chronic illness risk factors to target than it is to know how to do so," said Asch who is also the former Executive Director of Penn's Leonard Davis Institute of Health Economics (LDI). "Managing these conditions requires substantial behavior change. Our nation has invested considerably in the science of medical treatment but less in the science of behavior change. Our knowledge of how to break old habits and develop healthier ones is rudimentary but it's getting better."

Our nation has invested considerably in the science of medical treatment but less in the science of behavior change. Our knowledge of how to break old habits and develop healthier ones is rudimentary but it's getting better.

David Asch

Much of Asch's testimony focused on explaining the nuances of how behavioral economics -- which recognizes that humans routinely succumb to irrational tendencies that compete with their long term goals -- differs from traditional economics, which assumes human behavior is based on rational decisions informed by logic and mathematical calculations of the most valuable potential outcome.

Psychological foibles
"There's often a misunderstanding about behavioral economics and health," Asch said. "Many people believe that if you use financial incentives to change a person's behavior you're engaged in behavioral economics. That isn’t behavioral economics; it is just economics. It becomes behavioral economics when you use an understanding of our psychological foibles and pitfalls to supercharge the incentives and make them more potent."

Asch, who is a member of the Internal Advisory Board of the LDI Center for Health Incentives & Behavioral Economics, is also a researcher whose investigations of applied behavioral economics methods have been published in some of the country's leading scientific journals.

He cited one important new scientific finding that is not currently built into most wellness program designs -- loss aversion. This is the irrational tendency of people to be more motivated to take action to avoid a financial loss than to achieve a financial gain of the same amount.

Economic sense
"It doesn't make economic sense but it's how human actually tend to think," Asch said, describing a recent study of overweight employees at a large firm that tested various financial incentive strategies for encouraging more exercise.  That study was led by LDI Senior Fellow Mitesh Patel, MD, MBA, MSHP.

One group of employees was given $1.40 for each day that they walked at least 7,000 steps. A second group was offered a $1.40 incentive but in a way that structured as a loss. This second group was given $42 at the start of the month and lost $1.40 of that every day they failed to walk 7,000 steps.

"A traditional economist would see these two designs as the same," explained Asch. "For every day you walk 7,000 steps you're $1.40 richer. But it turned out that those who received the $1.40 daily payment were no more likely to walk 7,000 steps than those who received no incentive at all. But those who had $1.40 taken away if they didn't walk 7,000 steps were 50% more likely to succeed than people who got the straight payment."

Current methods' ineffectiveness
"Mathematically and financially," Asch continued, "these two approaches are the same but one worked and the other didn't." The example highlighted how scientists like Asch and his Penn colleagues continue to test psychological nuances to determine how best to nudge people toward different and healthier behaviors. One point he emphasized to the legislators was that most companies are currently using methodologies that are now known not to work well in motivating health-related employee behavioral change.

"Most large companies are using financial incentives to encourage healthy behaviors," Asch said, "but the vast majority of them do so by adjusting the premium their employees pay for health insurance. Although it may seem obvious that charging higher premiums for being a smoker or being overweight would encourage people to modify their habit there is little evidence that programs designed that way often work. At best, they provide modest financial benefits to employers and unclear health benefits to employees."

Missing ingredients
"The changes," Asch concluded, "are much less likely to come from typical premium-based financial incentives and much more likely to come from approaches that reflect the underlying psychology of how people make decisions encouraged by frequent rewards, emotional engagement, contests, and social acceptance. Those are the ingredients of successful programs and they're missing from most of what employers currently do."

"We know so much more now about how to design financial and other incentives to motivate human behavior than we did ten years ago," he told the senators. "I haven't seen much of this new knowledge applied by employers and there is no reason why it can't be applied. I'm very much in favor of greater use of these programs but, in addition, greater study of these programs--because I think we need an investment in the science that will help all of us get better at delivering these activities, not just in health care, but in other parts of society as well."