1. BEHAVIORAL INSIGHTS FOR WHEALTH WEF Penn Conference May 9, 2016 Department of Health Care Management Center for Health Incentives and Behavioral Economics, Leonard Davis Institute University of Pennsylvania School of Medicine Kevin Volpp, MD, PhD Kevin Volpp, MD, PhD – not for reproduction without permission University of Pennsylvania Prevention Research Center

2. 2 Huge differences in life expectancy in US based on income mediated by behavior Chetty et al JAMA 2016 2

3. 3 Kevin Volpp, MD, PhD – not for reproduction without permission Behavioral Economic concepts – design programs for humans that recognize common decision errors Decision ErrorPotential Response Present-biased preferences (myopia)Make rewards for beneficial behavior frequent and immediate Framing and segregating rewards$100 reward likely more effective than $100 discount on premium Choice overloadProvide smaller number of choices or guidance on advantages/disadvantages of choices Loss aversionPut rewards at risk if behavior doesn’t change to frame as losses Status quo bias/InertiaSet up system so that default favors healthy behavior Loewenstein, Brennan, Volpp, JAMA, 2007; Volpp, Pauly, Loewenstein, Bangsberg, Health Affairs 2009

4. 4 Kevin Volpp, MD, PhD – not for reproduction without permission Default bias  ‘Opt out’ policies result in much higher rates for organ donation Source: Johnson and Goldstein, Science, 2003 Level of effective consent Denmark Netherlands United KingdomGermanyAustriaBelgiumFranceHungaryPolandPortugalSweden

5. 5 Kevin Volpp, MD, PhD – not for reproduction without permission RCT of Default Options in Advance Directives

6. 6 Kevin Volpp, MD, PhD – not for reproduction without permission Defaults make a big difference in what people choose – even when stakes are high Halpern SD, Loewenstein G, Volpp KG, et al. How ingrained are seriously ill patients’ preferences for end-of-life care? Health Affairs 2013 Percent of patients choosing a comfort-oriented goal of care p = <0.01

7. 7 Kevin Volpp, MD, PhD – not for reproduction without permission Patients understood their choices Halpern et al. Health Aff. 2013 Halpern SD, Loewenstein G, Volpp KG, et al. How ingrained are seriously ill patients’ preferences for end-of-life care? Health Affairs 2013

8. 8 Kevin Volpp, MD, PhD – not for reproduction without permission Incremental Enrollment in Automatic Prescription Refills Enhanced active choice: make easier for people to make decisions that support future health Opt In Press 1: If you would like to be transferred to a Customer Care Representative now. Press 2: If you are not interested. Enhanced Active Choice Press 1: If you prefer to refill your prescriptions by yourself each time. Press 2: If you would prefer us to do it for you automatically. Opt InEnhanced Active Choice Keller, Harlam, Loewenstein, Volpp. Journal of Consumer Psychology. 2011

9. 9 Kevin Volpp, MD, PhD – not for reproduction without permission Experimentally test: -Control arm (no message) -Diabetes-specific message -Provider recommendation -Member recommendation -Enhanced active choice Enrollment in Healthy Food 25% discounts but low enrollment among diabetics

10. 10 Kevin Volpp, MD, PhD – not for reproduction without permission Messaging approach influences enrollment Conclusions: Significant lift on engagement from low-cost messaging Adding framed active choice to a message most effective approach “Yes! I want to activate the Healthy Food Benefit and get up to 25% cash back vs. “No, I’d prefer not to activate and continue paying full price for my healthy food purchases.” Gopalan, Paramanund, Shaw, Patel, Friedman, Brophy, Troxel, Asch, Volpp 2016 under review

11. 11 Kevin Volpp, MD, PhD – not for reproduction without permission 80% large employers using incentives to influence health behavior... Section 2705 of ACA: employers may use 30-50% of premiums as penalties or rewards for outcome-based incentives Premium adjustment doesn’t work very well in changing behavior – consider alternatives Source: Volpp KG, Asch DA, Galvin R, Loewenstein G. NEJM. 2011 365: 388-390,

12. 12 Kevin Volpp, MD, PhD – not for reproduction without permission Tiered, unbundled payments are effective: Long-term smoking cessation rates triple in incentive group 878 GE employees usual care usual care + $750 (not part of premiums) GE implemented nationwide plan in 2010 with 152,000 employees Volpp, Troxel, Pauly, Asch, Galvin et al, New England Journal of Medicine. 2009; 360(7): 699-709. p-value for difference <0.0001 Sustained abstinence through 12 months

13. 13 Kevin Volpp, MD, PhD – not for reproduction without permission Rewards are better than deposits... 2,538 employees of CVS 5-arm Randomized controlled trial Information about smoking cessation programs Individual or group rewards of up to $800 for confirmed quit at 6 mos. Individual or group deposit contract of $150 returned + $650 for confirmed quit at 6 mos. Halpern, et al. NEJM 2015 Quit Rates

14. 14 Kevin Volpp, MD, PhD – not for reproduction without permission Launched nationwide June 1, 2015 700 Good Reasons to Quit

15. 15 Kevin Volpp, MD, PhD – not for reproduction without permission Behavioral Insights for Whealth” Nudges: appealing because they gently push people in self beneficial directions but not overly heavy handed Defaults when interests of consumers/patients and choice architects align Enhanced active choice when ongoing engagement is needed Incentives that encourage action now to improve future well being - with behavioral elements to augment motivation

16. 16 Kevin Volpp, MD, PhD – not for reproduction without permission Questions? LDI Center for Health Incentives and Behavioral Economics www.chibe.upenn.edu University of Pennsylvania Prevention Research Center www.upennprc.org