Financial Incentives to Drive Behavioral Change

Designing financial incentives to drive change

Dr. Adam Powell helps payers design financial incentives to encourage plan members to achieve wellness objectives, including being physically active, losing weight, managing chronic conditions, and quitting smoking. Dr. Powell uses his training in behavioral economics to design incentive systems that provide the greatest impact at the lowest cost.

The famous behavioral economists Daniel Kahneman and Amos Tversky discovered that the pain of losing a small amount of money is far greater than the joy of receiving an equal sum. Subsequent researchers have developed systems for harnessing this finding to drive behavioral change. For instance, it has been demonstrated that incorporating the potential for regretting non-compliance into an incentive system can improve member outcomes. Using this and other research, Dr. Powell works with health plans through the process of developing scientifically-validated financial incentives that drive members towards healthier behaviors.