Thursday, February 16, 2012

Insurance and Fitness

The JHSPH news service provided a link to an interesting article yesterday.  It is an interesting read with details about employers/insurers who are providing health insurance discounts/reimbursements to people who do exercise and (in some cases) penalizing people who do not.  It is an interesting story about how decision makers have acted to provide incentives to get fit or disincentives not to.

To a certain degree I really want to ask--why do we have to pay people to take care of themselves.  But perhaps that is just the part of me that has lived through what I felt like when my exercise was minimal for six year and since found joy again in exercise.  My preferences.  My time constraints.  My money.  I get to choose how to spend it and I have decided to spend a lot of time exercising--particularly since January 2010 when I decided to make marathon running part of my experience.  Not everyone shares my preferences.  Some people have less control over the schedules or have longer commutes.  And not everyone has the money for proper exercise gear.  Of course, it doesn't take all the distance I go or all the equipment I have.  But still, not everyone shares the same preferences.

Both the incentives and disincentives get at the same thing.  Encouraging people to be more active/fit.  My impression is that penalties (while perhaps perceived as being "mean") would get people's attention more than incentives.  This is suggested by prospect theory where even if the difference in spendable cash (that is not in health insurance premiums) for the fit and not fit is the same, it will get the not fit's attention more if they are paying a "higher" premium rather than if the fit individuals get a reward for their fitness.

Things like this have been tried in the past, although not necessarily directly as money.  There are many examples of small items for participation in wellness programs.  They never seemed to do a whole lot.  It is interesting to consider why people may be more responsive to such things now.  Is the dollar amount finally enough?  When income in general is feeling less certain, perhaps people are more price sensitive? If the economy recovered to the perceived wealth of the 1990's would be respond similarly?  Would habits developed now carry over to when the economy is better some day?

Also, it seems like the options discussed in the article all involved going to a facility.  For some, that may be just what they need to be active.  What allowance is there for the individual who is fit and exercises in a non-facility setting?  What about a person who gets a disutility from being at a gym?  That would be an interesting consumer sovereignty issue to consider and there may be simple technological solutions to document that a person is getting exercise in a location other than at a an affiliated facility.

It will be interesting to see how this proceeds as incentive and disincentive schemes like the ones described continue to be implemented.

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