Thursday, July 24, 2014
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Health Care’s Frequent Flyers

NEW YORK – For those of you who have seen the (American) movie “Up in the Air,” think of the scene where George Clooney meets Vera Farmiga. He’s an outsourced human-resources executive who flies around the country firing people on behalf of timid managers; she’s a counterpart female road warrior. Their courtship ritual revolves around loyalty cards: he pulls out his American Airlines Executive Platinum card; she matches. Next, his Diamond VIP Hilton HHonors card; she calmly slaps hers on the rickety table where they are sharing drinks.

The unspoken message: points make you sexy. Airlines and hotels have known this for a long time. Dean Margolis, who long ago consulted for major airlines and is now applying the same techniques to healthy behavior, recalls wondering how to get executives to fly just a little more.  It’s not by offering discounts, which benefit an executive’s company rather than the executive. Margolis asks: “When the boss says ‘Who wants to come to Philadelphia with me?’, what’s going to get two people instead of one to say yes? To abandon their families, stand in line, and perhaps take a middle seat...”

Points, of course, will do the trick. The promise of being recognized at the airline counter, ushered to the front of the line, and, yes, looking like a big shot at the airport bar.

Margolis’s new company, MedRewards, plans to give people points for healthy behavior – everything from taking their medications regularly to signing in at the gym more than five times a week. As in the airline business, the actual customers won’t be the users, but rather the vendors who want to influence users’ behavior: pharmaceutical companies who want patients to buy their drugs, along with insurers and employers who want to lower long-term costs. (Employers, bless them, even have an interest in keeping people healthy!)

How do you translate healthy behavior into status? First, of course, you can have cards identifying your compliance behavior – e.g., not how many drugs you take, but how regularly you take them. As for the rewards, they could be everything from discounts on energy-saving appliances and posture-enhancing furniture to vouchers from suppliers of “healthy” foods.

With the right partner, such a scheme could also include better treatment from the medical establishment: perhaps a separate phone line to call your care provider, free WiFi while you sit in the waiting room (others have to pay), and even room upgrades if you’re unlucky enough to need surgery. Just as with flying, which most people (George Clooney’s character excepted) don’t particularly like, users may eagerly sign up in order to collect points. 

MedRewards is not alone. A variety of other companies are taking different approaches, but all of them have the same goal – to motivate people to engage in healthy behavior. And all of them avoid simply paying them, which is counterproductive over the long run, and may lead to cheating. While some may think it worth cheating to get money, most people don’t want a gold card that they know in their heart is a fraud. Yet many people will do all they can to game the system, a challenge that each company must confront.

Contagion Health, in which I am an investor, uses multi-person game mechanics to turn healthy behavior into status and rewards. Its initial service, at http://imoveyou.com, allows you to challenge someone else by filling in a form, which is then published on the person’s Facebook wall or on Twitter.

For example, Alice could fill in the blanks: “I will walk three extra miles if @JuanTigar spends 30 minutes on the elliptical machine.” Of course, people use imoveyou for other purposes – everything from challenging a roommate to make his bed to encouraging a colleague to beat a sales record. So much the better. Getting people engaged in general is healthy, too – though the corporations and health providers that sponsor subscriptions will probably put some restrictions on subject matter.

Then there’s HealthRally, which uses insights from behavioral economics to motivate people to achieve their own health and wellness goals. The basic insight is that owing something to your friends is a far more powerful incentive than getting something for yourself.

The user signs up and recruits friends and family to sponsor a reward of their choice for a specified goal. (We can imagine a wish-list revenue opportunity here, where vendors can offer specific motivational products or services.) From then on, the sponsors have an implicit right to check on the user’s progress, offering support or criticism far more compelling than any stranger could. It’s relatively easy to fail on your own, but if your friends have put up real money, it’s much harder.

While the service is currently designed for individuals, companies could also use HealthRally to enhance their corporate wellness programs. By providing matching financial rewards, for example, a company could leverage its employees’ natural support networks and provide a valuable boost to the pot.

All three of these companies let us use our own quirks and psychology to motivate ourselves. Over time, MedRewards, Contagion Health, HealthRally, and others will have to prove their worth with data. If people who use their services actually stay healthy, work harder, and cost less, the evidence will be hard to ignore. And people who might not have adopted these tools on their own will be encouraged to do so by others with evidence and incentives on their side. 

Disclosure: I am an investor in Contagion Health, and am considering investments in MedRewards and HealthRally.

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