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Vaccine Lotteries and Beyond: A Behavioral Economics Expert on What Motivates Healthy Behaviors – and What Doesn’t

vaccine incentive

Over a decade ago, as a primary care physician with a Ph.D. in economics, Kevin Volpp, MD, PhD, director of the Center for Health Incentives and Behavioral Economics (CHIBE) in the Perelman School of Medicine at the University of Pennsylvania, noticed an interesting phenomenon in health care: across the board — from insurers, to providers, to patients — it had become normalized to spend great sums on health care services when a patient gets sick, but relatively little on keeping healthy patients healthy. For instance, there is a willingness to spare no expense when treating a heart attack or lung cancer, but less is invested on behaviors that increase risk for these conditions, like improving blood pressure or quitting smoking.

On a mission to understand this phenomenon and study ways to improve public health, Volpp founded CHIBE, which combines the clinical health expertise at Penn Medicine with the behavioral science and economic knowledge of faculty at Penn Medicine and Wharton to study how healthy behaviors can be rewarded and even encouraged.

Currently, as COVID-19 vaccines have become available to the general public and vaccination rates began to slow, there has been a boom in incentives for receiving the vaccine across the United States. States and businesses alike are rolling out rewards for people who provide proof of vaccination — from donuts, to beer, to guns, to Philadelphia’s own lottery for a chance to win up to $50,000.

Based on his research, including a recent article in The New England Journal of Medicine, in the following Q&A Volpp answers questions about health incentives for the COVID-19 vaccine and beyond.

volpp
Kevin Volpp, MD, PhD

How does your research into health behaviors like weight loss and smoking cessation inform efforts to incentivize COVID-19 vaccination?

Typically, it is easier to motivate one-time behavior, like getting a vaccine, rather than behaviors over time, like weight loss, because that would require sustained engagement.

There are a number of factors that will work together to encourage the one-time behavior of getting a COVID-19 vaccine. First, the reward should be relatively immediate; the more time that passes between a behavior and the reward, the less likely a person is to associate the two.

Second, the program should be simple and easy to understand. A lot of rules or complicated registration will deter people from engaging with the promotion, and consequently, from getting the vaccine.

Third, there are a number of behavioral science findings that can further increase effectiveness of incentive programs. For example, losses loom larger than gains. That is, the disappointment of a dollar lost is about twice as powerful as the utility of a dollar won, which can motivate people to engage in behaviors that avoid losses. That is, someone who loses $100 by not doing something will typically be more motivated than the same person would be by winning $100.

In addition, incentive systems can be designed so that people will be notified if they won or if they would have won had they been vaccinated, leveraging a concept called ‘anticipated regret’, which people may feel if they miss out on potential monetary rewards for getting a vaccine because they had not been vaccinated.

People are also heavily influenced by their peers, so if it appears everyone around you is partaking in a behavior, you’re more likely to engage as well.

Finally, the incentive should be of a magnitude that matches what it’s enticing. Small rewards often don’t work and what is being offered should reflect both the economic value of the underlying activity and the barriers to changing that behavior.

There are a number of different incentives being offered by cities, states, and private businesses — from baseball game tickets to millions of dollars. Based on your research in motivating healthy behaviors, which of these will be most effective?

The data is still out on how effective each various incentive is, but any non-monetary incentive appeals to some people but not others. For instance, if I don’t drink beer or like baseball, those things will not motivate me.

Monetary incentives have universal appeal, and for that reason they typically will work better. The high stakes lotteries in places like Philadelphia and Ohio have gotten people’s attention since winning one of the big prizes ($50,000 or $1 million, respectively) have the chance to make a huge impact on someone’s life.

What’s more, people focus far more on the magnitude of the reward than the probability. These lotteries for COVID vaccination are offering monetary incentives of a magnitude unprecedented for a health behavior, and most people will only consider the benefit of winning that sum of money, and rarely consider how unlikely they are to do so.

Do you think continued incentives will be needed in the future for things like potential COVID-19 booster shots?

This is a concern of mine. With all of these incentives to get the vaccine now, we may be priming the pump for people to expect these rewards in the future.

My suggestion is to strategically implement social rewards. For instance, companies can appeal to peoples’ desire to return to normal, and allow large gatherings with proof of vaccination, as was done in a number of sports contexts such as live attendance at the NFL Draft or expanded seating being made available for New York Knicks and Brooklyn Nets games to those who are vaccinated. Travel to the European Union this summer is limited to Americans who are vaccinated. The incentive here is being able to partake in activities you’d otherwise miss out on without a vaccine.

Why do you think vaccine lotteries have been embraced by both sides of the political spectrum?

In this moment, leadership on both sides want to vaccinate as many people as possible for the health of both the public and of the economy.

In a way, the incentives for vaccination appeal to the ethos across the political spectrum. On the right, there is a strong belief in personal responsibility and market-based approaches that allow for freedom of choice, and the financial incentives appeal to this value far more than any alternative approach.

On the left, there are concerns about barriers to vaccination for low-income, hourly workers, and these financial incentives help to offset those barriers for people to get vaccinated.

How has your research informed the design of the Philadelphia Vaccine Lottery, and what makes it unique?

The lottery, which was designed with Katy Milkman at the Wharton School’s Behavior Change for Good Initiative, Alison Buttenheim, PhD, MBA, from Penn Nursing, Angela Duckworth, PhD from the department of Psychology, and Richard Thaler, PhD, from the University of Chicago Booth School, has a number of key elements, designed to maximize results.

First, the lottery auto-enrolls everyone based on their address. This boosts participation rates rather than having people manually opt-in.

Second, the large sums of money — up to $50,000 — plus the auto-enrollment can engender a sense of “anticipated regret.” That is, people can anticipate a palpable sense of regret they’d feel if their name was drawn but they couldn’t win the $50,000 since they weren’t vaccinated.

Finally, we have prioritized the 20 zip codes with the lowest vaccination rates, which increases odds for people living in those areas and further incentivizes them to participate.

What is the future of health incentives beyond COVID-19? Do you think we will start incentivizing more things such as being more active, drinking less, and getting annual flu shots?

COVID-19 and the vaccination efforts provide a unique opportunity for the nation to learn a lot very quickly about motivating healthy behavior, and we’re learning on a large scale how one person’s personal health decisions impact the health and economic well-being of others. We will evaluate the data from the various initiatives being tested around the country and see what insights we can apply moving forward.

Why is it important to incentivize healthy behaviors beyond just for public health?

Getting vaccinated against a deadly virus creates “positive externality” for other people, meaning that the act of being vaccinated benefits others besides oneself.

In a free market, people typically focus on how their decisions affects their own wellbeing; because of the positive externalities to having more people vaccinated, there is a compelling argument for the government to subsidize public health.

Further, experts have estimated that the pandemic has cost the U.S. economy an estimated 16 trillion dollars, and the faster we can vaccinate the population and re-open the economy, the more rapidly we can improve the economic health of the nation as well.

What other steps outside of financial incentives can motivate people to get vaccinated?

Incentives are part of a hierarchy of behavioral science interventions. At the bottom are interventions that aren’t intrusive, but are also the least effective. For instance, when the vaccines first became available, the primary method of motivating people to get theirs was simply by providing information about the benefits and risks of getting vaccinated, and allowing people to decide for themselves. While this allows for the most autonomy and is the least intrusive method, it clearly was insufficient in vaccinating the entire population.

The next interventions are financial incentives — both rewards and penalties. As I previously discussed, these are effective because most people value money and can be incentivized by either providing a reward or a penalty. Depending on how large these incentives are, to whom they are applied, and how they are designed, their strength can vary considerably.

Next in the hierarchy is to restrict choices. For instance, airlines could require all passengers to provide proof of vaccination in order to fly. This doesn’t eliminate a person’s ability to travel, as they can still drive or use other modes of transport, but it restricts their options enough that someone could be motivated to get vaccinated in order to fully partake in activities they want to.

An even stronger approach is to eliminate choice by mandating vaccination, as many colleges and workplaces are doing, like Penn Medicine.

What are you most interested in researching further?

In addition to evaluating the impact of various incentives on COVID-19 vaccination rates, I am also interested in how we can use innovation principles and behavioral science to improve health equity. Further, I’m also currently researching how we can use innovations to reduce the risk of heart attack, including diagnosing people and intervening earlier.

I am very optimistic about the potential for behavioral economics and health incentives to be used more systematically to increase people’s health.

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