Why two insurance companies want to pay Hongkongers to work out
Insurers seek ways to make sure customers are fitter, and therefore healthier and less likely to make claims, in wake of data showing around half of Hong Kong adults don’t exercise enough
In autumn and winter, Vivian Siu Yun-ki usually works out only two or three times a month and not at all in December. The 26-year-old postgraduate student used to jog outdoors in Canada, where she grew up, and says she would like to exercise more, but, having returned to Hong Kong a year ago, finds it isn’t so simple.
“You don’t just walk out the door and there’s a park right there … you have to either go to a running track, or a field, which is usually not nearby. So you have to bus there, you have to carry all your equipment, and most places do not offer facilities for you to shower and stuff. That’s a deterrent for me.”
Siu says if it could be just a little more convenient, or if she had an extra incentive,she would work out more. Two insurance companies, AIA and Manulife, have now introduced programmes that they say can target Hongkongers like Siu. The schemes reward you for exercising or having an active lifestyle, even if it just means walking several thousand steps a day. If you buy health insurance from AIA or Manulife, you can become a member of AIA Vitality or ManulifeMOVE, which give you discounts for staying active and tracking your physical activity with an app or a fitness tracker such as a Fitbit or a Misfit.
The AIA programme’s rewards include discounts at shops such as Market Place by Jason’s, and on services, such as Pure Fitness gyms and the city’s Ocean Park theme park, and free movie tickets from UA Cinemas.
Both insurers stress that the programmes target ordinary people rather than fitness fanatics, so rewards are not hard to achieve: ManulifeMOVE will give you 5 per cent off your health insurance premium if you just walk 5,000 steps a day, and 10 per cent off for walking 10,000 steps a day, and AIA Vitality gives you 10 per cent off just for becoming a member and buying an insurance plan under the scheme.
This is a new way of addressing an old problem: many people just aren’t getting enough exercise. The Leisure and Cultural Services Department conducted fitness tests on more than 13,000 Hongkongers for a report in November 2012 which showed almost one in two adults had a sedentary lifestyle. This suggested half the population engaged in 30 minutes or less of moderate physical activity a week.
This finding was reinforced by an April 2014 survey commissioned by the Health Department and conducted by the University of Hong Kong’s Social Sciences Research Centre. The survey found that only 37.5 per cent of the more than 4,000 adult respondents met the physical activity levels recommended by the World Health Organisation – which is at least two-and-a-half hours of moderate aerobic activity a week.
The Hong Kong police force has lowered its physical requirements for new recruits – removing the tests for sit-ups and pull-ups. Although a spokeswoman denied that the force made the tests easier to attract more recruits, Wong Kam-chow, a former police inspector who now teaches criminal justice at Xavier University in the American state of Ohio, told the South China Morning Post that the new test is a response to Hongkongers becoming ever less fit.
Paying people to get fit isn’t entirely new: Britain, South Africa, the United States and other countries have had similar schemes for years. The question is: will it work?
Siu believes these programmes could remind her to exercise or at least to just walk more often.
“I would make it a point to go out and run, or even if I don’t run, I would probably take the stairs versus taking the escalator or the elevator when you go to the footbridges,” she says. “I would just factor in little bits of workout time to earn more points.”
Exercise physiologist Duncan Macfarlane, who heads the Institute of Human Performance at the University of Hong Kong, says an insurance programme that gives people a financial incentive to exercise is a win for both the consumer and the insurance company.
He points out that everyone has time to work out and you don’t need to go to a gym to get in some exercise. It’ll help even if you just get off the bus 500 metres away from your destination, walk up a flight of stairs to get to a toilet that’s further away, and walk to lunch and walk home.
Reward programmes will help people who just need a little push to get them to exercise, although Macfarlane acknowledges that not everyone will be persuaded.
But even “if it helps 10 per cent of the population, fantastic”, he says.
A 2009 study by economist Gary Charness at the University of California Santa Barbara and Uri Gneezy, a behavioural economist at UC San Diego found such incentives do work: you can get people to go to the gym more often to exercise if you pay them, and they support giving people incentives to develop healthy habits.
However, it’s not that simple. Charness and Gneezy also wrote that once you pay people to adopt healthy habits, they could come to expect the rewards and revert to their old lifestyle once the rewards stop coming.
Richard Fielding, a clinical and health psychologist who studies public health at the University of Hong Kong, shares that concern. “If this becomes very widespread, then people may grow up within a culture whereby everything they do that is good for themselves is rewarded, and if it’s not rewarded, the message may be then that this is not important and therefore it’s not important that I do it,” Fielding says.
“It makes logical sense for the insurance company to do that, but I’m a little bit sceptical that it will have the intended effects.”
The evidence from research is mixed: a 2008 study which involved paying obese people to lose weight found that the incentives worked temporarily but the subjects regained substantial weight once the study ended.
That means we need a better way to instil a healthy lifestyle, and David Asch, professor of medicine and health policy at the University of Pennsylvania, reckons the key lies not in economics, but behavioural economics.
Standard economics assumes that people act rationally: they’ll exercise in return for benefits. Behavioural economics, however, recognises that people are often irrational, but in predictable ways, says Asch, executive director of the university’s Centre for Health Care Innovation.
As an example, he points to a study published in the American Journal of Health Promotion by Kevin Volpp. The researchers wanted to ensure that most of the 1,299 employees of a management company in the US filled out health risk assessment forms seeking information about their health condition and lifestyle so they could join a company wellness programme and reduce the cost of medical claims. Because the company was already issuing US$25 gift certificates to employees who filled these forms, one group was offered US$50 gift certificates as an added perk. Standard economics: pay people more to see if they’ll do the thing you want them to do.
With the other group, the researchers spent the same amount of incentive money but added a behavioural economic twist. These employees were put into teams, one of which would be chosen at random each week andthe members offered an extra US$100 if they filled in the form. If more than 80 per cent of the team fulfilled the task, they would each receive $125. But if your team was chosen and you failed to fill in the form, you would find out from other team members what you missed by not getting with the programme.
The premise is that while money is a powerful motivator, what’s more powerful is fear of missing out – people will do something if they don’t want to regret not having done it later.
The company’s original scheme of US$25 gift cards got 40 per cent of people to fill out a form; paying people double got 44 per cent; the “regret lottery” group achieved 64 per cent participation, making it 20 percentage points more effective for the same amount of money.
Asch says behavioural economics works because it engages people on more emotional levels than just rewarding them for good behaviour.
“People get tired of that; it’s almost like how you keep the romance alive in a relationship. How do you keep it interesting? How do you keep people engaged, fundamentally doing the things that they want to do in the first place? We’re not asking people to do things they don’t want to do.”
They are the same principles that make video games appealing, and drive loyalty programmes that get passengers to stay with an airline because they don’t want to lose their frequent flier status, Asch says.
Businesses have known about these techniques for a while, and now it’s time to apply them to encouraging healthy behaviour, like getting people to quit smoking, take their medicine on time, monitor their blood pressure, and exercise more, he says.
“There has not been an enormous amount of uptake yet of behavioural economic principles, but it is rising and rising fast.”
Britain set up a Behavioural Insights Team (also known as the Nudge unit after the influential book by economist Richard Thaler and law professor Cass Sunstein) to try to get people to register for organ donation and give to charities.
In September, US President Barack Obama also ordered government agencies to use those insights to “better serve the American people”. But behavioural economics is not a miracle cure for public health programmes, Asch says.
“Anything that helps us continue to make progress is good enough for me,” he says. “People who think we’re going to suddenly solve the problem of medication adherence or we’re going to make diabetes a thing of the past… that’s going to require basic science. That’s got to be some new molecular breakthrough. We’re not going to solve diabetes with these behavioural approaches, but we might get better and better at [managing the condition].”