Dr Deepak N Patel

Behavioural Economics, Health and Vitality

Agenda

The Health Landscape 01

The Role of Behavioural

Economics in Health 03

The Vitality

Programme 04

Determinants of Health

Behaviour 02

Vitality Research 05

Top 10 Causes of Death

1900 vs. 2010

Chronic Diseases Hypertension

High cholesterol

Diabetes

Lung diseases

Cancers

SA’s Quadruple Burden of Disease

HIV and AIDS

Accidents and Violence

Diseases of Poverty Gastro

Pneumonia

Malnutrition

Alcohol and Substance Abuse

Sexual Behaviour

Lifestyle behaviour

High Prevalence Of Poor Lifestyle Factors And Associated Chronic Diseases

60%

4main risk factors

4main NCDs Lead to

Responsible for Of all deaths worldwide

5

Agenda

The Health Landscape 01

The Role of Behavioural

Economics in Health 03

The Vitality

Programme 04

Determinants of Health

Behaviour 02

Vitality Research 05

7

BEHAVIOUR

Psychological

Biological

Environmental (socio-economic)

Biopsychosocial Model

Adapted from Social Cognitive Theory – Albert Bandura

HEALTH OR DISEASE

8

The Evolution of Physical Inactivity

and Sedentary Behaviour

10

Humans are endurance athletes

Use of External Sources of Energy at the

Expense of Internal Energy

11

The History of Food

14

Fast Food World

Portion Distortion

1

6

Standard Economics and Behavioural economics

Standard Economic Model

•Humans make perfectly rational decisions if given

sufficient information and if the price or incentives are right.

•Decisions are intended to maximise their utility

(satisfaction).

• Time-consistent preferences

•Humans exercise maximum self-control

1

7

Standard Economics and Behavioural economics

Behavioural Economics

• Bounded rationality

• Poor self-control

• Time inconsistent preferences

• Prone to biases

The Architecture of Cognition: Two Systems

Intuition / Want

• Fast

• Automatic

• Effortless

• Emotional

• Governed by habit

Reasoning / Should

Slow

Controlled

Deliberative

Value-based

18

Present-biased preferences.

Time preferences -

humans display a tendency

to delay the implementation

of decisions that are in their

long term interests for

decisions that provide

immediate gratification –

19

Other People’s Behaviour Matters

people do many things by observing others and copying; people are

encouraged to continue to do things when they feel other people

approve of their behaviour. Individuals are more likely to model

behavior observed in people they identify with.

20

21

The Power of Media and Advertising

Habits are important

22

People tend to be overconfident and

overestimate their abilities and health status

23

24

Over-weighing of small probabilities and

under-weighing of high probabilities

S M O K I N G A L C O H O L D I A B E T E S A I R C R A F T S

Status-quo bias

individuals tend to maintain a current state even

when the adoption of alternate options is likely to

lead to better outcomes.

25

26

People often know what is in their long-term interest

but have difficulty in implementing decisions in the

present to enhance those interests.

Behavioral economics and change

Changes in environment to ‘nudge’ people in

beneficial directions

Does not infringe on the right of individuals to make

the ‘wrong’ choices

27

Government Policy

Macro-environment

Choice Architecture

28

Agenda

The Health Landscape 01

The Role of Behavioural Economics in

Health 03

The Vitality Programme 04

Determinants of Health Behaviour 02

Vitality Research 05

Vitality provides a behavioural solution to the under- consumption of wellness

The Vitality wellness program uses behavioural

economic principles to drive behaviour change in key

areas of health risk:

01 02 Vitality provides access to healthy partners Vitality incentivises behaviour change

Vitality provides access to partners that lowers the

barriers to healthy choices, and incentivises ongoing

engagement:

Physical inactivity

Poor nutrition

Smoking Preventive screenings

HealthyFood

Physical activity platform

Pre 2002 2003 2004

2005 2006 2007 2008 2009 2010 2011 2012

Lifestyle partners

Lifestyle

rewards Retail

rewards

• Gym visits

• Smoking

• Fitness

assessments

• Vitality checks

• Online

Nutrition

Centre

• Online

Stress

Centre

• Nutrition

assessment

at dietician

network

• Enhanced

clinical focus

of Vitality

points

• Dental Check-ups

• GP Wellness

assessment

• Diamond Status

• Personal Health

Review

• HealthyFood

purchases

• Personal Pathways

• Online Fitness

Assessment

• Healthy

Company

Index

Research collaborations

2013 2014

Wellness

partners

Fast Miles

+

Nutrition

Travel

rewards

KeyFIT

Targeted access

Physical activity and

preventative care

• Additional

Devices

• Personalised

Programmes

Retail and lifestyle

rewards

Enhanced

travel rewards

Re

wa

rds

cha

ssis

C

lin

ica

l fo

un

da

tio

n

2015 2016

• Expanded

personal health

programmes

• VitalityBaby

• Vitality Global

Network

• Shared Value

Insurance

Active Rewards

Apple Watch

Enhanced

HealthyLiving

Enhanced Activity

benefits

Healthy Kids

Membership

1.9 million 1 million 1.25 million 1.5 million

2017

• Enhanced Vitality

Check

• Enhanced risk

segmentation

• Closer alignment of

points to health

outcomes

• Targeted

programmes for at-

risk members

Shoe Booster

Points to Miles

Enhanced travel rewards

The evolution of Vitality

32

Vitality recently launched Active Rewards

Download

and activate Get active

Achieve

fitness goal Get rewarded

Get Apple Watch Get active Get rewarded

Agenda

The Health Landscape 01

The Role of Behavioural Economics in

Health 03

The Vitality Programme 04

Determinants of Health Behaviour 02

Vitality Research 05

Vitality’s research foundations

Incentive study HealthyFood

benefit study

Behavioural

economics

Discovery

Healthy Company

Index

Kevin

Volpp

George

Loewenstein

To examine the role of various incentives to increase physical activity

NIH Grant for HealthyFood benefit evaluation – paper to be published by the American Journal of

Health Behavior

Roland Sturm

Vitality Drive; Social media and behaviour change

Dan Ariely Janet Schwartz

To explore burden of disease and wellness behaviour & activity in the workplace

Engaged members experienced lower costs,

shorter stays in hospital and fewer admissions

*Patients with at least one admission event

Admit rate (number of

admissions)*

Length of stay in hospital (days) Cost per patient

Increase in fitness engagement over time

21,1

24,8 27,0

31,1 31,8

1 2 3 4 5

Year

% o

f m

em

be

rs u

sin

g

the

gy

m b

en

efi

t

Increasing engagement over time

37

0

10

20

30

40

50

60

70

80

90

100

Year 1 Year 5

% o

f m

em

bers

High engaged

Medium engaged

Low engaged

Not engaged

49%

13%

26%

12%

30%

22%

28%

20%

Engagement levels amongst longitudinal study test participants over the investigation period

90 92 94 96 98 100

Outcomes associated with transitions

between engagement levels

Year 1 Hospital cost per member, Year 4 to 5 Year 3

Inactive

Inactive

Active

Less

active

Active Active

More

Active

6%

8%

9%

Benchmark

Benchmark

Relationship between increasing activity

and the odds of hospitalisation

Number of additional gym visits per week from Year 1 to Year 3

Od

ds

rati

o f

or

ho

spit

alis

atio

n in

Yea

rs 4

to

5

0,80

0,85

0,90

0,95

1,00

0,5 1,0 1,5 2,0

13%

10%

7%

3%

Impact of the Vitality HealthyFood benefit

Increase in ratio of healthy food spend after activating HealthyFood benefit

Activation of benefit

Months before/after enrolment

Expenditure ratio

-11 -8 -5 1 -2 4 7 10

0.2

0.25

0.15

9.3%

6.0%

Have not activated the

benefit

Activated the benefit at

15% cashback

Activated the benefit at

25% cashback

Healthier by Precommitment - Duke Collaboration

Aim Study the effect of pre-committing to buying healthy food on food

purchasing behaviour

Participants who accepted pre-commited to increasing the percentage

of HealthyFood™ items in their baskets by 5% for six DiscoveryCard

statement cycles.

If they don’t achieve their commitment, they forfeit their HealthyFood

cash back

42 42 42 42 42 42 42 42 42 42 42 42 42

Study Results: Healthy %

27

28

29

30

31

32

33

34

35

36

Cycle 0 Cycle 1 Cycle 2 Cycle 3 Cycle 4 Cycle 5 Cycle 6

Non-commit Control Precommit

43

START

1. Control

2. A diabetes-specific message

3. A message with a recommendation of HF from another Vitality member with diabetes, and

4. A message with a recommendation of HF from a physician with diabetes expertise.

5. Enhanced active choice – “Yes! I want to active the HealthyFood benefit and get up to 25% cash back on the healthy food I buy” or “No, I’d prefer not to activate and continue paying full price for my healthy food purchases.”

44

45

0,9%

7,6%

12,5%

10,0%

6,9%

0,0%

2,0%

4,0%

6,0%

8,0%

10,0%

12,0%

14,0%

16,0%

18,0%

20,0%

Control Diabetes-specific Diabetes-specific +Enhanced Active

Choice

MemberRecommendation

ProviderRecommendation

% Enrolled in HealthyFood at end of intervention period

Vitality – a Model of Shared Value

2018 DISCOVERY

VITALITY

Thank You