Is Monetized Gamification Part of the Future of Healthcare? And Who Should Pay? Part 1

Health & Wellness

Fact:  People don’t get enough exercise

  • According to the CDC, in the US, over 70% of adults miss weekly physical activity benchmarks — and 25% are completely sedentary.
  • Also from the CDC, 76% of US children between the ages of 6 and 17 not doing the recommended amount of daily physical activity, which leads to increased risk of heart disease, cancer, diabetes, etc.
  • From WHO’s Global Status Report of Physical Activity, 81% of adolescents and 27.5% of adults don’t meet WHO’s recommended levels of physical activity.
  • From the National Institute on Aging (part of NIH): “More than one in four people age 65 years or older fall each year… However, many falls can be prevented. For example, exercising”
  • From FRAC: “The latest data indicate that 39.6% of U.S. adults are obese.”

Fact:  Lack of exercise increases healthcare costs

  • From WHO’s Global Status Report of Physical Activity:
  • 70% of all healthcare costs will be spent on treating illness resulting from physical inactivity.
  • The health implications of inactivity will cost the world economy more than $27B annually between 2020–2030.
  • According to Kaiser Permanente, seniors with low fitness levels have 3X the death rate of seniors with high fitness levels.
  • From research published in the American Journal of Medicine:
  • “Lack of physical activity accounts for 22% of coronary heart disease, 22% of colon cancer, 18% of osteoporotic fractures, 12% of diabetes and hypertension, and 5% of breast cancer.”
  • “Less than 15% of heart attack patients actually follow rehab regimens after discharge.”
  • “Physical inactivity accounts for about 2.4% of U.S. healthcare expenditures or approximately $24 billion a year.”
  • Falls in seniors reduce quality of life and drive medical costs: From CDC: “Each year about $50 billion is spent on medical costs related to older adult falls”.
  • From The Obesity Alliance:
  • “Estimates of the medical cost of adult obesity in the United States range from $147 billion to nearly $210 billion per year.”
  • “The nationwide 2010-2015 Medicaid spending for obesity and obesity-related diseases was over 8% of the total Medicaid spending.”
  • “In some states, over 20% of Medicaid funding went towards treating obesity-related diseases.”


A 2000 year old quote still rings true: “I don’t do the good I want to do; no, the bad I don't want to do - I keep doing that instead.”  I remember a senior executive at a top fitness brand in the US saying that their primary competitor wasn’t another fitness brand, it was Netflix.  For the vast majority of people, fitness is kind of hard, but watching Netflix is easy.

Is there a magical fix for this?  No.  A decade from now, both medical practioners and fitness entrepreneurs will continue to say “if only we could get the other 70% of people to do some fitness, then …”. But there might be new strategies and techniques to better align incentives.

There are two primary techniques used in encouraging people into doing more exercise today:

  • Community:  Because doing fitness with coaches and friends you know brings more fun and camaraderie to distract you from the hard work.
  • Gamification:  For people who have a competitive streak, gamification brings targets.

Often these two techniques are used together - both for in-person fitness classes at the likes of Orangetheory and F45, as well as for online or virtual fitness as with Peloton and Zwift.

A third option would be financial incentives, and that’s what we’ll focus on here.

Just to state the obvious, tying healthcare-related financial incentives to fitness is incredibly hard, in part because the US healthcare ecosystem is notoriously broken with many bizarre game theory outcomes that are reinforced by complexity, special interests and lobbying.  Again, notoriously, the US has the highest health spending per capita and the lower life expectancy in the Western world:

There are other sectors in which tying behavior to cost has worked.  For example:

  • Car Insurance:  Many companies offer “good driver discounts”, and reduce the insurance premiums based on how long you go without an accident.  There are also car insurance driver monitors - electronic devices that observe your speed, braking patterns, etc.  Telematics-based insurance can lead to 30% premium reductions from the major US auto insurers, and despite privacy concerns, uptake increased as inflation grew, and continues to grow.
  • Life Insurance:  Many life insurance policies require medical examinations, and these measurements impact premiums.  As a personal example, when I had to get an AIG policy for key man insurance several years ago, I agree to the policy and price quote up front, but after the medical they dropped the annual premium a bit because AIG said I was in better shape than an average man of my age.  The bragging rights were probably more valuable than the actual monetary discount 😂.

Anything to do with health insurance is more difficult for a host of reasons, including:

  1. US healthcare is so massive with so many stakeholders - from CMS: “U.S. health care spending grew 2.7 percent in 2021, reaching $4.3 trillion or $12,914 per person.”
  2. In the US, most people have healthcare insurance provided in pools at the employer level, with everyone paying the same rates in the pool.  This reduces the individual incentive to live a healthier lifestyle.
  3. In many European countries, e.g. the UK, France and Germany, provision of healthcare is universal and/or a public service - the NHS in the UK.
  4. Healthcare costs are concentrated into a small percentage of the population - from Peterson-KFF regarding the US: “In 2019, 5% of the population accounted for nearly half of all health spending.”
  5. Obamacare banned discrimination based on pre-existing conditions, from HHS: “Health insurance companies cannot refuse coverage or charge you more just because you have a 'pre-existing condition'”.

Here are five big questions:

  1. Would financial or other incentives make a difference to human behavior?
  2. Are there ways to provide incentives that would be compliant with regulatory policies?
  3. What could be tracked for participants to have goals for incentives?
  4. Who could be the early adopters for these types of strategies?
  5. How can Tribe help?

We’ll take a look at each of these questions in turn in part 2 of this blog.

Justin Marston

Thinker, writer, innovator, runner, Star Wars fan

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