Food for Thought...

Bahavioral-Based Design: Pay Attention to the Tension

2011-03-30T11:16:00.000-05:00

Behavioral-Based Design: Pay Attention to the Tension

How effective are corporate wellness programs?

While corporate wellness programs are flourishing, the jury is still out on their effectiveness.

Wellness proponents have been encouraged by the advent of value-based insurance design (VBID). This approach does two things: 1) Lowers (or eliminates) copays and coinsurance for certain medications and preventive services (high value) that prevent or effectively manage disease, and 2) Increases copays, coinsurance or other payments for hospital-based and higher-cost (low value) services.

VBID has been shown to increase medication compliance and the use of preventive services. But is the investment achieving the cost savings and health improvement long sought after?

Regarding cost, an article in the February 2010 issue of Health Affairs (1) suggests that one employer’s value-based insurance design “broke even” by reducing non-drug health care services that offset the increase in drug spend. While the study did not include the cost of implementing the program, it did provide some support for the continued use of VBID approaches to manage cost.

What about improving health and reducing health risk? This is a thornier question because it relies on two things…you and me. Are we willing to change our behavior to improve our health, and if not, what then?

Incentives have also been a popular approach to get people’s attention. But how effective have incentives been? A recent survey by Buck Consultants (2) estimates that only 19% of employers believe that incentives are “effective or extremely effective” at changing behavior. At the other end of the scale, 48% of respondents said their incentive programs were “minimally effective”, “not effective”, or “don’t know”.
With little concrete evidence of wellness program success, and the perceived ineffectiveness of incentives, what can be done to successfully lower cost and improve health through wellness?

Behavioral-Based Design

Behavioral-Based Design (BBD) is an emerging concept centered around one key driver…managing “tension” to motivate action. The “tension” driver is derived from much of the behavioral economics research related to human biases, particularly social bias, loss aversion, inertia, present bias, and statistical optimism.

In the VBID approach, reducing financial barriers certainly encourages people to obtain and take their medication as prescribed. And it encourages people to seek out care to treat and preventive disease. But the lack of an increased level of tension is the main reason that even these approaches are not changing the behavior of the vast majority of people. While it’s great to pay less…or nothing…for prescriptions and preventive care, evidence shows us that many people still don’t take the action to change their behavior. Incorporating more “tension mechanisms” in VBID will help to improve the success and effectiveness of these programs.

Incentives, though widely used, also rarely increase tension. Why? The incentive amounts are usually not high enough to get someone’s attention. Most employers are offering annual incentives in the $100-$250 range, according to the Buck Consultants Global Wellness Survey. In a rational world, pocketing an extra $100 should be a no-brainer. Yet people leave money on the table all the time, often due to inertia, the strongest of the behavioral biases.

Pay Attention to the Tension

How does BBD manage tension to motivate action? Let’s consider a few examples:

Safeway introduced their “Health Measures” program a few years ago. The design had its roots in the basic tenets of behavioral-based design. Under the program, if you take certain actions and reach certain thresholds, you can earn an incentive up to $1,300, or up to $2,600 if your spouse participates and reaches those same thresholds. Does $1,300 or $2,600 get your attention? Yes, because it raised your level of tension. $100 may not get your attention, but 13x that does, as it did for 85% of the employees eligible for the Safeway program. The learning is that incentives should be meaningful enough to get attention and motivate action.

AmeriGas requires employees to obtain periodic medical exams. If you don’t, you lose your employer-provided health insurance. Compliance is high…because tension is equally high. Mandates increase tension and get people’s attention.

Let’s take another example: On-site fitness centers. Do they pass the “tension” test? No. Fitness centers are a wonderful benefit, and many employees benefit from the corporate investment in on-site centers. Yet without a “tension mechanism” in place to motivate the majority of the workforce to act, usage will be limited to a small percentage of the workforce.

What about corporate “challenges?” Do they meet the “tension” test? Yes. People are influenced to a large extent by social bias. We like to “be in it together”. That’s why corporate challenges and The Biggest Loser have been wildly successful. Not because of the program itself. Because the program creates tension, which initiates motivation and action.

The tenets of BBD need to be aligned with your organizational culture and overall total rewards strategy. While this approach may not be for everyone, it should be considered as you look at benefits design changes for 2012 (yes…it’s that time time). As you reviewing new design alternatives, remember to pay attention to the tension and ask one question: “Will this provision raise tension to the level that people will act”

Measuring Behavior Change
Remember to track your results. Human behavior change can be easily measured. You should always pay attention to the success of your programs and practices. What participation, completion, and achievement goals have you set? Are they high enough to increase your own level of attention to achieve them? Are you meticulously tracking cohort groups who are achieving the desired goals, and the impact on health care cost, health risk, absence, disability, and productivity? Are you showing tangible results of the financial impact of your strategy and interventions? We need to be thinking about ways to dramatically increase the bar to initiate action, change harmful behaviors, and foster helpful behaviors in the effort to improve individual and organizational health that will lead to improved individual and organizational productivity and sustainability.

Bottom Line: Improving Health, Improving Life
The holy grail of health and wellness promotion is the ability to change human behavior to promote health and improve overall health risk. Only by increasing tension to motivate action can we get people to take the right steps to volunteer, participate, achieve and believe that they can improve their health and live a long and healthier life.

Remember: Pay attention to the tension.

From Boom to Bust: How’s Your Financial Health?

2011-03-21T11:13:00.000-05:00

Baby-boomers (full disclosure…I resemble that remark) are confronting a financial bust.
The Feb. 19th Wall Street Journal article, Retiring Boomers Find 401(k) Plans Fall Short, starkly paints the picture:
A 60 year-old boomer has a median income of $87,700, and a median 401(k) account balance of $149,400.
Guess what that $149,400 would generate monthly if invested in a fixed annuity today?
About $757 a month (or $9,073 a year).
Even with the expected social security median annual benefit payment of $35,080 (about 40% of pre-retirement income), that equals $44,153 annually, or about 50.3% of pre-retirement income.
Could you live on half your income tomorrow…comfortably?
If you have a pension or other investments, this helps, but half of all boomers do not have a pension to help fund retirement.
How did we get in this situation?
A simple answer is that we, as boomers, elected to spend rather than save.
And as employers, we moved from defined benefit pension plans to defined contribution 401(k) plans as the primary retirement vehicles for employees.
And our need to save for retirement grew exponentially.
And our minds may not have been able to deal with this new reality.
Decision science, behavioral economics, and raw emotion have shown that we prefer pleasure over pain (we buy versus save) and inertia over action (it takes effort to enroll in the 401(k) and save at the maximum level, and it takes no effort to forget to enroll.)
How is your financial health? And if you are responsible for designing your company’s retirement plan, what is the financial health of your employees?
Many employers now offer auto-enrollment, auto-escalation and auto-rebalance features that “nudge” people to make better long-term savings and investment decisions.
Yet many auto-enrollment provisions have employees contributing just 3% of their salary.
So a 30-year old today earning $50,000 annually, saving 3% of pay, receiving annual pay increases of 2.5%, and earning a 6% average annual rate of return, will accumulate just over $200,000 over the next 35 years. Quite simply, that's wholly inadequate. Inflation will take an even bigger bite out of your retirement income needs by 2045.
Vanguard Group, one of the world’s largest mutual fund companies, is now advising people to contribute 12% to 15%, including employer contributions, to adequately prepare for retirement and uncertainty about Social Security and Medicare.
While the best time to plant a tree was a generation ago, the same rule applies to saving for retirement.
But it’s never too late to save more today.
One final note:
I’ve sent this article to my children who are 23 and 26. And I’ve asked how much they are saving. They are increasing that amount significantly
Here’s to your financial health...and the financial health of your children!

Sustainability-based Human Capital Management

2010-02-19T21:56:00.000-06:00

How sustainable are you? Your company? Our world?
Sustainability-based human capital management looks holistically at moving beyond a "culture of health" to a "culture of sustainability" based on three fundamental pillars: Environmental sustainability, organizational sustainability, and individual sustainability.
Environmental sustainability is what is normally considered the "green" movement...reducing an organization's carbon footprint; adopting environmentally-friendly operating and manufacturing practices; and on a more micro level, working locally in the community to promote environmentally- and community-friendly programs and practices.
Organizational sustainability is about focusing first and foremost on the ability of the business to drive sustainable growth and profitability. This includes processes to continually assess strategy (vision, mission, values, markets, and competitive advantage); operations (structure, processes and practices); innovation (the "fuel" of organizational sustainability); analytics (the lifeblood of any effective enterprise) and talent (people execute and operationalize business strategy. When people execute well, it's almost impossible to replicate).
Individual sustainability is about helping people rise to their greatest level of achievement.Individual sustainability is driven by critical talent management practices that holistically engage people in their career, health and wealth; and inspire them to achieve their greatest potential in work and life.
People have an innate desire to be part of something greater than themselves. Sustainability-based human capital management will take the individual, the organization, and the environment to the next level.
Sustainability is about understanding the best of the current environment...externally, organizationally, and internally...and creating the path that will lead to perpetually improved environmental, organizational, and individual health.

Count your $20 Blessings

2009-10-30T20:54:00.004-05:00

We happened to stop at the store the other night on our way home from getting a little exercise. It was a quick stop, we gathered the few items we were after, and went to the checkout. I wasn't aware of it, but it seems that the woman ahead of us in line was having a problem with her credit or debit card. It wouldn't approve her purchase of $14. 67, and she walked out of the store. As she was leaving my wife Susan noticed her pretty quick departure. We put our few items on the counter and the cashier said that she was sorry, but she needed a manager to cancel a transaction. My wife put 2 and 2 together and realized that the woman that had been ahead of us was not able to pay for her groceries. There they sat, bagged and ready to be taken home. We could see some if the items...a loaf of bread, peanut butter, some apples...pretty much the staples of a quick lunch or dinner. We offered to pay the bill...the only problem was that the woman had left the store and the sacks had nowhere to go. So the register was cleared, we payed for our things, and went out to our car.

Perhaps there is such a thing as divine intervention...or sheer coincidence. As I slid into the passenger seat and Susan the driver's seat, Susan noticed a family in the car beside us. Looking closer, she saw it was the woman who had left her groceries, unable to pay. Susan quickly took a $20 bill and walked over to the neighboring car window. We'd like to help pay for the groceries, she said. The woman objected at first, but slowly, and thankfully accepted. Inside the car with her were her four children, ranging in ages from toddler to high school. She opened the door and thanked Susan for her kindness. She broke into tears, sharing that her husband had left her, there was little money, and all she wanted was to buy some bread and groceries to feed her children.

The next time you see a $20 bill, count your numerous blessings. For some, $20 is a week's worth of coffee, or a few workday lunches. To others, it's a simple matter of survival, a full stomach for your children, and a windfall on a day when the winds seem destined to blow strongly against you. Count your $20 blessings. And if you're able, share your $20 blessings, like Susan.

Random Acts of Grocery Carts

2009-10-20T15:35:00.003-05:00

Yesterday's post mentioned my friend Jack, who took the hand of an elderly woman in dance and transformed her evening from one of mere observation to one of dance and participation. Jack demonstrated a random act of kindness that made the evening memorable not only for the elderly woman, but for all who witnessed the event.

My random act of kindness was not nearly as powerful. At an unplanned stop at a local store, I walked my basket out to the car to unload my groceries. Dutifully, instead of leaving the basket to the fates of the winds (which were gusting at 35 miles per hour), I returned the basket to the store. Walking back to my car, another shopper had just finished unloading, and had less dutifully left her cart to the wiles of the aforementioned winds. As she pullout of her parking space, her orphaned cart made a beeline straight toward the right front side panel of a defenseless grey Chrysler 300. I quickly intercepted the cart before the collision, and retraced my steps to the front of the store to return the cart to its rightful home.

While the owner of the Chrysler is unaware of my actions, I am.

Jack, you've made me think about looking every day for those random acts of kindness that will make me, and the world, a better place to live. Here's hoping that Jack will inspire you as well.

Random Acts of Dancing

2009-10-19T13:44:00.002-05:00

I had the pleasure to attend an Assistance League dinner/dance this past weekend. The Assistance League is a national nonprofit organization that puts caring and commitment into action through community-based philanthropic programs that benefit Youth programs (infants, children, and teens), Family programs (adult, family, and trauma victims), Senior programs and Cultural Enrichment programs. You can find more at http://www.assistanceleague.org/ps.programs.cfm?ID=19

Late in the evening the band was still playing, and only the true music lovers and die-hard dancers remained. One of those remaining happened to be a elderly woman (I’m not a great judge of age, but if she was under 85 I would be very surprised). There she stood, smartly dressed in a pale pink, lace-covered outfit, cane in hand to support her frail and somewhat hunched frame. She was perched on the edge of the dance floor watching the festivities, slowly and deliberately tapping her cane to the beat of the music. She was clearly enjoying the scene, the music, and the moment.

Out of the blue my friend Jack slowly walked over to this lovely, grey-haired woman and took her hand, asking her for this dance. Then he took her in his arms and carefully and gingerly started to slow dance with her. Jack held her lovingly and gently, and she smiled a smile that seemed to illuminate the crowd that was quickly gathering around them. Many cameras flashed, recording the moment as a touching personal memento of this Random Act of Dancing. As they danced, a few of the women, who appeared to be her family, clapped and smiled and watched, capturing the moment forever in their own hearts and minds.

After a minute, the dance was over. Like the clock striking midnight in Cinderella, Jack politely thanked this graceful woman for the honor of the dance and came back over to join us, followed a cacophony of cheering and applause from the crowd who had witnesses a magical moment on a small dance floor on a clear, bright evening in Texas.

Thousands of people spontaneously engage in random acts of kindness each day. You may have read the book, or visited the website http://www.actsofkindness.org/ .

For Jack, his random act of kindness was in the form of a simple dance for an elderly woman spectator. To Jack it meant but a moment in a life that has many more magical moments to come. For the elderly woman, it may have meant the world. Or at least the highlight of her day.

Who’s day will you brighten today? Tomorrow? Jack has inspired me to take the step as well. What will be my random act of kindness today? I'll let you know tomorrow. Will you let me know what random act inspired you?

Rex

Why We Love Tiger

2009-10-13T20:15:00.002-05:00

Tiger Woods is the best golfer in the world. He may end up being the best of all time. In sports, it's easy to measure success. Who's the best is usually as simple as who wins. Tom Brady is arguable the best quarterback of the decade with 3 Super Bowl rings to prove it. Derek Jeter is one of the greatest Yankees of all time, recently setting the Yankee record for most lifetime hits.

What about the rest of us? Where do we rank?

Name the best CEO of all time. Can you? Jack Welch may come to mind, but how do you know? What are the equivalent wins and losses? Market share? If that's the case, GE doesn't win.

Who's the best school teacher? Principal? Fireman? Policeman?

Life isn't as easy to measure as sports. We don't chalk up really measurable wins and losses each day. What we strive to do is to be the best that we can be.

Sure. Sometime things get in the way.

And sometimes what gets in the way is looking back at us in the mirror.

Measure what you can. Set some goals.

If only keeping score in life was as simple as sports.

How are you keeping score in your life? Or do you?

Rex

Level 5 HR

2009-10-11T17:11:00.004-05:00

Level 5 Human Resources Management

In the book Good to Great, Jim Collins coined the term Level 5 Leader. In his study of enduring companies, one of the key characteristics of these companies was the presence of a leader who exhibited a rare combination of professional will and personal humility. David Maxwell of Fannie Mae, Darwin Smith of Kimberly-Clark, and Colman Mockler of Gillette all exhibited this Level 5 Leader key trait: ambition first and foremost for the company, and concern for company’s success, rather than for one’s own riches and personal renown. (Jim Collins, Good to Great, 2001)

The lessons of the Level 5 Leader can be applied to Human Resources (HR) Management. “Level 5 HR” should exhibit ambition first and foremost for the company and its success, rather than for the respect of HR as a function, a “seat at the table”, or the label of “strategic advisor”.

In 2005 the HR community was broadsided with the article “Why We Hate HR”. (Keith Hammonds, Fast Company, Why We Hate HR, August 2005) It hit a nerve. What nerve depends on your perspective. It was met with consternation by most HR professionals, and with nods of agreement from most business leaders.

Thus, the problem. There is a great divide between business leaders and HR leaders about the contribution of HR to the business. A divide that HR must close.

More to come on this. On the ability of HR and management to measure, source, assess, acquire, reward, engage, enable, develop, deploy, enrich, and deliver.

People execute business strategy. How are you enriching your people to enable them to enrich your customers and stakeholders?

How is your company making a difference in the world? Are you energizing your people to become emotionally involved in their life at work? In becoming part of something greater than themselves?

What are your thoughts on how HR can most effectively close this divide?

Rex

Food for thought

2009-10-07T03:06:00.007-05:00

Speaking of food, a treasure-trove of nutrition research regarding animal-based and plant-based diets is The China Study, a book by Dr. Colin Campbell. His compilation of research studies over the past 30 years indicates very powerfully that animal-based high-protein diets can trigger and progress cancer and heart disease, while whole food plant-based low-protein diets can inhibit cancer development and reverse cancer progression. Paleo, Mediterranean, whatever the diet: we all have our own stories of how a certain diet has helped us to lose weight, temporarily or permanently. It seems that all "diets" seems to work for some people. And we all understand it's as simple as calories in, and energy out (and finding the time to exercise). Being human, we sometimes have problems adhering to that equation.

The question is, what evidence is there that a certain nutrition approach can impact a human's ability to not only lose weight, but to improve overall health, vitality, and protect you from disease? There is very compelling evidence that a whole food plant-based low-protein nutritional approach not only helps to lose weight. More importantly, it may also save lives and help avoid significant pain and suffering from disease. Yes, there is other studies that indicate other approaches work as well, but if you're interested in learning more read The China Study. How ironic that after spending billions of dollars looking for "cures" for cancer and heart disease, that the "cure" might have been discovered years...even centuries ago...by simply maintaining a lifestyle focused on plant-based, low protein, whole foods. That's food for thought.

Rex