Improving Health Outcomes with Personalized Incentives


Even with the shift to value-based healthcare in motion, costs for both consumers and payers in the healthcare system are still incredibly high.

Whenever I meet with clients on either side, they’re always concerned about costs. For payers, there’s an especially increased importance on finding novel ways to educate and motivate patients to maintain their health. This is a great idea, but there’s a big sticking point around an important question: What’s the best way to really help consumers enact behavior change, to help them maintain better health and reduce costs all around?

An important focus for the healthcare industry as a whole right now should be on using personalized incentives to help people change their behaviors.

If we can figure out what matters to consumers, we can use those things as incentives to help them take action, be more aware, and stay healthier in the long run. In turn, better health will reduce hospitalization and ER visits, and lower total costs throughout the healthcare system.

Thankfully, personalized incentives are becoming easier to implement because of the increased data that’s now available for every consumer. Today, it’s possible to customize personalized incentives based on individual health records, demographics, prior concerns, or utilize the data from their wearable devices. And with new data and insights available, providers and payers can apply digital health solutions with customized incentives to specific patients, which encourages them to focus on specific outcomes.

Cool idea, but what does it look like?

Ideally, personalized incentives should be a prominent part of every health insurance package. These incentives could look like many different things, but here are some examples: 

1.  Financial incentives

Financial incentives in healthcare are most often small cash rewards tied to the completion of certain tasks or for reaching certain milestones on a patient’s journey.

Some examples – for obesity interventions, payers might consider offering financial rewards for weight loss or for reaching a certain BMI. For diabetics, perhaps consumers receive $50 by improving their A1C score to a certain point. Or for at-risk populations, perhaps they get $100 by simply attending a checkup or a physical, or by adhering to their medications.

Companies such as ChipRewards, HealthPrize Technologies, and Wellth all offer platforms or mobile apps to engage patients to use financial incentives like these. Essentially, they pay people to stay healthy, and it works: these companies have seen improved medication and treatment adherence. They encourage patients to make healthier lifestyle choices, and to be more engaged with their health. As a result, patient outcomes are improved, and costs are reduced. To see more on how mHealth apps can motivate through goal-setting, watch our recent webinar on Using Goals and Challenges to Changing Health Behavior.

2.  Social/competition-oriented incentives

Many people respond well to socially motivated goal-setting: competitions, achieving individual or team goals together, or working toward status-based goals. These incentives hinge on involving someone’s community in their goal-setting processes (for example, a Fitbit challenge around weekly steps, against friends and colleagues).

Many offices already implement weight loss challenges, or prizes for gym attendance, for this reason – they’re fun, they’re social, and they really motivate some people. But now, payers and providers have an opportunity to make this kind of incentive more prominent in their plans, too, especially in close or connected patient communities.

For example, challenges can be implemented through wellness programs, which can be sponsored by the employer or the payer. According to a CIO article, executives at one hospital discovered significant benefits of wearable step trackers: “After learning that Fitbit users who have at least one friend with a Fitbit get 27 percent more steps than those who don’t, […] Houston Methodist found employees were taking more steps, getting out during breaks and forming better relationships with coworkers over step counts. In the end, 90 percent of employees participated in the corporate wellness program and averaged 16,000 steps per day.”

3.  Intrinsic incentives

Most people know that exercising, eating well, and sleeping enough are important factors in determining positive health outcomes. So why doesn’t everyone do those things? Often, people don’t enact these healthy habits unless they have an individual motivation to do so. This is called intrinsic motivation, and it refers to behaviors that are driven by internal rewards – tasks you want to complete or changes you want to make because of how those changes will reward you, and only you.

Helping people build intrinsic motivators is hard work, but it can be incredibly worthwhile. This kind of work is often driven by physicians, but can also be enacted by payers. Instead of interacting with the patient once a year during their check-up or upon signing up for insurance benefits, payers and providers should implement digital health solutions that help them communicate with patients on a more consistent basis. They should have feedback loops open about any health risks. And they should provide information to patients often about personalized risks and goals. By doing this, payers can encourage patients to embrace health goals as intrinsic incentives.

The bottom line is that personalized incentives can lead to significantly improved health outcomes and lower costs.

Payers and providers should explore offering their patients a combination of incentives to understand what works best for their populations. With personalized incentives, we can help the general population take better care of themselves and actually stick to the goals they set. Research shows that most people are ready and open to this. And if we can change behaviors by looking at data more effectively, we can reduce the total costs of care all around, which is a victory for everyone.

Interested in chatting with Orest more about what it could look like to implement these kinds of incentives within your organization? Email him at  

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