In part 1 of this blog, we saw that being fitter can reduce healthcare costs, and set the groundwork for the idea of financial incentives to change behavior in insured populations. Here in part 2, we’re going to look at whether financial incentives could work - to achieve the right outcomes and from a regulatory perspective - and then what could be tracked, who could drive adoption and how Tribe can help.
Would financial or other incentives make a difference to human behavior?
From a widely cited academic paper in 2017 titled Can Financial Incentives Help People Trying to Establish New Habits? Experimental Evidence with New Gym Members:
“We conducted a randomized controlled trial testing the effect of modest incentives to attend the gym among new members of a fitness facility, a population that is already engaged in trying to change a health behavior. Our experiment randomized 836 new members of a private gym into a control group, receiving a $30 payment unconditionally, or one of 3 incentive groups, receiving a payment if they attended the gym at least 9 times over their first 6 weeks as members. The incentives were a $30 payment, a $60 payment, and an item costing $30 that leveraged the endowment effect. These incentives had only moderate impacts on attendance during members’ first 6 weeks and no effect on their subsequent visit trajectories. We document substantial overconfidence among new members about their likely visit rates and discuss how overconfidence may undermine the effectiveness of a modest incentive program.”
This might say no, but the details of the study matter:
- Measurement was made based on attending a traditional large box gym. This required a behavioral change in going to the gym, and that was what was measured - not fitness activities including at-home.
- There was no attempt to drive usage over and above the typical failure pattern of gym memberships, other than the financial incentive.
- The financial incentive itself was relatively small - $30 or $60 for behavior over a 6 week period.
- There was some hope that an initial incentive for the 6 week period (which did have some impact on behavior) would then change the behavior after the incentive period. Why should this be true, and why would it need to be true? Would a car insurance company give me a discount for 6 weeks of driving with telematics, then continue the discount forever without telematics in the hope that my driving would stay the same?
In this study funded by the National Institute on Aging, the number of steps by each participant was measured each day, with a target of 7,000 steps per day. It was also reported by CNN - Here’s an incentive that really makes people exercise more:
“The researchers found that the possibility of losing money led people to exercise more than the other incentives. It resulted in a 50% relative increase in the average amount of days participants achieved their physical activity goals.”
That’s a big difference, which would indicate that financial incentives around fitness tracking can work. The only difference here was the financial incentive - there was no additional gamification, no interaction with a coach or other people, so no community. Also the incentive was small - only $1.40 per day ($42 per month).
From three other peer reviewed studies:
- Implementation of a workplace intervention using financial rewards to promote adherence to physical activity guidelines: a feasibility study: “Our data suggest that a financial incentives-based workplace wellness program can increase MVPA among sedentary employees.”
- Personal financial incentives for changing habitual health-related behaviors: A systematic review and meta-analysis: “Personal financial incentives can change habitual health-related behaviors and help reduce health inequalities.”
- When do financial incentives lead to healthy habits? Commitment devices may be the best way to achieve long-term changes: “A growing body of public health research shows that financial incentives work wonders for promoting healthy outcomes like losing weight and quitting tobacco”
This area is topical for us at Tribe - we are involved with a university / hospital research team on using live fitness classes with metrics (from Fitbit watches) in adolescents to see determine how that impacts fitness levels and obesity.
Are there ways to provide incentives that would be compliant with regulatory policies?
Health warning - I’m no specialist in healthcare regulation and I’m not an attorney. But the answer is yes, and in fact the Affordable Care Act encouraged growth of financial incentives to reduce healthcare costs:
- From this NIH publication: “The Patient Protection and Affordable Care Act of 2010 (ACA) increased the maximum rewards that group health insurance plans (including employers who self-insure) may offer in their wellness programs, with the goal of incentivizing healthy behaviors such as weight loss among the obese and smoking cessation.”
- This article ACA health plans increasingly offer wellness incentives lists rewards programs offered by many of the leading US insurers, with values from Ambetter and Bright reaching $500 per year per member. Interestingly, that’s a much greater (and ongoing) financial incentive compared to the academic studies.
So in the US, most things are allowed - reward points, discounts, “wellness bonuses”, etc. From the research above, having some type of wellness bonus that decreases if you don’t keep up activities to maintain it is more effective psychologically than giving points or discounts - people don’t like losing cash they were entitled to.
In the UK (and much of Europe), healthcare coverage is nationalized, so bonuses and rebates may be harder. It might still be possible to offer some type of monetary incentivization, or perhaps rewards based on prioritization of non-urgent care, though that would likely be very controversial.
What could be tracked for participants to have goals for incentives?
Another key question is how performance against these incentives might be measured. Here’s how other companies measure performance:
- Steps: A good measure of general movement, these are typically measured with smartwatches e.g. Apple Watch, and getting the data is relatively easy via Apple Health. Companies that use steps include YuLife (an employee wellness incentive program provider), Apple (of course), 1st Phorm, WeightWatchers, FitOn,
- Activity Period: Essentially how long you workout for, like taking virtual classes. This can work well with a coach who validates you showed up and did the exercise, tracking from a wearable and/or some AI video analysis. Most virtual fitness products like Peloton, FitOn, Apple Fitness+, etc as well as physical boutique studios like Orangetheory and Barry’s do track attendances.
- Heart Rate / Calories: For cardio exercise and improved heart health, many fitness brands track heart rate during fitness activities, which heart rate you’re in for how long, and calories burned during that time. This data is often structured into leaderboards to add some friendly competition. Orangetheory (Splat points) and F45 (Lionheart) do this in-studio, FitOn and Fiit do it during virtual classes as the main measurement, and others like Peloton track it as a secondary metric. Tribe’s own software platform supports heart rate measurement during both live and on-demand classes.
- Body Mass Index (BMI): F45 uses InBody scanners extensively to measure weight loss, other premium gyms do too, as it’s a key way to determine body composition (as opposed to weight alone, when someone could be converting fat to muscle and still weigh the same). BMI can be a bit more intrusive to measure, and typically requires more expensive equipment - there are consumer weight scales that try to measure it, but it’s more difficult to validate the readings. With a coach or physio trainer, it’s easier to measure and track BMI - whether on a physical device or via a scale.
- Connected Fitness: Peloton led the way with connected fitness, and many others have followed, but connected fitness providers tend to be expensive - both in equipment and in monthly subscription fees. Zwift is interesting in its gamification being truly like a video game, with points and virtual swag to buy for your avatar, but its primary market is serious cyclists.
- Proprietary Wearables: Two leading examples here are Oura and Whoop, both of which have corporate offerings. I think the challenge here is cost and uptake (similar to connected fitness) - a lot of people in a larger pool will want to stick with Apple Watch or whatever wearables they’re using. Also these new wearables expect everyone to wear them almost all the time, versus say a heart rate tracker just during exercise.
- Benchmarking: This is more difficult to measure. Bold and Vivo (both aimed at improving quality of life and reducing fall risk in seniors) have assessments that measure strength and stability based on holding poses, etc. Orangetheory has benchmark sessions at certain intervals to measure improvement ('all-outs'). In-person and virtual benchmarking sessions tend to depend on a real human coach to validate results. Peloton has rides designed for Power Zones based on Functional Threshold Power (FTP), you can also measure you real max heart rate with a wearable as an indicator of cardiovascular fitness.
- Rep Tracking: This is somewhat difficult though technology is making it easier. Tempo was one of the first to do this (in a connected mirror device and now from smartphones), Centr is working with movement AI vendor Asensei on similar techniques - both can recognize what weight the person is using e.g. in a dumbbell given specific equipment (using computer vision). Peloton Guide has done rep counting without trying to figure out what weight you’re using. Lululemon tried connected weights (the dumbbells have sensors in them and connect over Bluetooth) in its Mirror acquisition, JAXJOX has also tried connected free weights, and there are lower cost Chinese options. Tonal and others have done rep and weight tracking in connected fitness, but they’re expensive. Again, having a coach there can help, but is much more cost effective if paired with AI and computer vision.
Overall, the most successful metrics to track for healthcare-related incentives are likely:
- Steps (requires a mid-cost wearable e.g. Apple Watch).
- Heart rate (requires a low-cost wearable e.g. a heart rate strap).
- BMI (requires a low-cost connected weight scale, or manual measurement).
- Reps (can be done with video analysis using AI).
- Attendance (can be done via a mix of AI and/or human coach validation).
All of these methods require some amount of trust especially without human validation - who’s wearing the wearable, etc. This is true in Strava and even real life races - as per the recent news story of a competitive ultrarunner getting caught and banned after riding in a car for part of the race.
Who could be the early adopters for these types of strategies?
I think it has to be tied to healthcare costs. Various startups have tried other ‘sweat to earn’ approaches with credit cards and reward points (e.g. Paceline, Sweatcoin and Cadoo) or video games (e.g. Walken, Defy Labs and Genopets), but the ‘prizes' are relatively tiny because its not correlated to something really expensive. Healthcare costs are the right target, which is why healthcare insurance incentives (up to $500 per year) dwarf these other earning options.
The seemingly most obvious candidates as early adopters are health insurance providers who own the risk for their members:
- Medicare Advantage: Private insurers take on the risk on a fixed cost basis for seniors. Many offer virtual fitness and strengthening classes for free - e.g. SilverSneakers and Bold - but these are typically just benefits with no tracking or incentivization today.
- Employers: Employers that self-insure their employees in their own pools would have two benefits from measuring and incentivizing healthy behavior:
- Reduced healthcare costs for employees as per all the data above.
- In general, there is a correlation between wellness / health and happiness / productivity in employees (see 1, 2, 3, 4).
For employers, many currently work with fitness aggregators like Gympass which provides access to fitness facilities and classes, but today that’s more of an HR benefit with little focus on tracking. YuLife is one of the most interesting in the employer space, but it’s based in the UK (where healthcare is nationalized) and has limited US footprint today.
How can Tribe help?
Is Tribe the golden answer to solving healthcare costs? No (of course not), but we are involved in research focused on encouraging healthy behaviors in a healthcare and rehab context, and our software could be part of a solution for enabling healthier populations with reduced healthcare costs.
Tribe provides a software platform for delivering live and on-demand fitness class content with metric integration - like a mashup of Peloton and Zoom, but as a platform for fitness and wellness creators to use with their members or followers. Our DNA is consumer fitness - making it fun, gamified and personalized with scalable interactivity:
- Video: Both live and on-demand, in a single unified platform, with content management enabled with AI. Tribe is also Zoom’s only case study in fitness. Can be used at-home, at the office or in the gym.
- Production Support: Tribe enables cost efficient production for fitness creators, with movement libraries, a low cost studio experience and the ability to monitor users at scale - both live and asynchronously.
- Wearables: Supports any major smart watch or heart rate sensor for live data collection during fitness activities, including leaderboards.
- Metrics: Our data model is extensible to steps and BMI data from open (not closed system) weighing scales. We can also integrate with movement AI technology such as Asensei for rep counting.
- Interactivity: We support live and asynchronous interactivity - between coaches and members - as well as a sense of community and accountability.
- Content: Tribe doesn’t create content, it enables content creators, and will be adding a content marketplace next year for attribution and payments.
We are partnered with Zoom’s healthcare team, and working with two hospitals on next-gen telehealth with better measurement and tracking to improve patient outcomes.
In the end, we think it’s important to put the consumer first, and make fulfillment of goals for incentives feel fun and game-like as opposed to like completing a tax return. There should be many ways to earn or reach incentives with different detectors / wearables and different types of activities. This can cater to different people within the pool as opposed to a ‘one size fits all’ strategy. In the consumer world, Strava is a good example of a platform that’s trying to be inclusive - broadening its activities to include Apple Fitness+ classes and Zwift rides.
To be effective, financial incentives should be continuous (not for a short period), more flexible and part of a holistic wellness offering that makes it easy for consumers to achieve the incentive goals - ultimately getting healthier and reducing healthcare costs.