Gaining a deeper understanding of human behavior – and using that understanding effectively – will help us influence people to make better decisions about their health. Professor Richard Thaler, a recent recipient of the Nobel Prize, sought to prove this theory with his research in behavioral economics — which looks at the flaws and biases that influence human decisions.
Thaler’s best-selling book, Nudge, reveals that we can lead people to make better decisions by making those decisions easier. His theory has caught the attention of corporate executives and policy makers looking to reduce the incidence of chronic disease, which accounts for a majority of the health care costs worldwide. And it’s prompting employers to think about how to use a better understanding of human behavior to develop more effective health and wellness programs for employees.
For example, you may not think about it, but we use a series of mental shortcuts or “rules of thumb” to simplify decisions in our lives. That’s good, because we would be paralyzed if we had to carefully consider every single decision we make each day. Employers can use this insight into human decision making to design more effective health and well-being programs.
At Willis Towers Watson, we refer to this topic as human-centric health. We’ve spent the last two years working with World Economic Forum to see how companies, nonprofits and governments worldwide are using their understanding of human behavior to make it easier for employees to stay healthy.
We found that effective programs took into account the way our minds work, including many cognitive errors, such as:
- Present bias: We value things much less when they are in the distant future.
- Loss aversion: We hate losing things more than we like gaining things.
- Optimism bias: We overestimate our luck, our intelligence and our skills and abilities.
- Default: When faced with a decision we tend to make the easy decision — which often means sticking with the status quo.
- Narrative: We are much more motivated by stories than statistics.
- Virality and social networks: Human behavior, both good and bad, spreads in social networks much like viruses.
- Mental accounting: We attribute resources to one category, which changes the value of those resources. (This is the insight that led to Thaler’s Nobel Prize).
Based on that research, we’ve identified seven ways employers can incorporate the principles of human-centric health into the design of their employee health and wellbeing programs. These include:
- Designing the workplace to encourage employees to exercise and eat well and ensuring that no one is exposed to tobacco smoke. (Willis Towers Watson’s Worksite 360 program can help employers assess the worksite’s contributions to, and influence over, healthy behaviors.)
- Designing health plans that offer meaningful choices to “nudge” employees to select the plan that best fits their perceived needs.
- Developing incentive programs that drive engagement and encourage employees to try programs, without being heavy-handed or promising more behavior change than the programs can deliver.
- Defaulting retirement savings contributions and investments to encourage prudent financial planning.
- Offering software with human interfaces that make the “best” choice obvious and easy.
- Providing individually-tailored reports that show what could be gained by better planning and what could be lost by failing to make good choices.
- Using raffles or sweepstakes to gain attention for new program offerings for a small cost per employee.
Thaler and other Nobel laureates have shown us how we think and make decisions. We can apply this understanding to developing programs and workplaces that encourage healthy behaviors. Human-centric health is one application. While we don’t expect it to win a separate Nobel, its impact on the economic and human costs of chronic disease could be great nonetheless.
Cowriter Gary Shutler is a senior communication and change consultant at Willis Towers Watson. He leads the talent, communication and change management, and employee insights business in Southwest U.S. markets.