One Way to Lower Health Costs: Pay People to be Healthy

Good news: Health costs as little as $3 a day. At least, that's all it took in one recent study for several patients to forgo bad behaviors that put their health at risk.

Each year, more than 40% of premature deaths in the United States result from unhealthy behaviors such as smoking, over-eating or failing to take medications as prescribed. Physicians routinely struggle to get patients to give up their bad habits for the sake of their long-term health, yet 20% of Americans still smoke, and 71% are either overweight or obese.

"We know that people in the short term have a lot of trouble changing
their behavior in ways that is in their long-term best interest," says Kevin Volpp, Wharton professor of medicine and health care management, and a professor at the University of Pennsylvania School of Medicine. "People aren't very good at making these tradeoffs between immediate gratification and delayed and often intangible benefits, such as good health 10 years from now."

As director of Penn's Center for Health Incentives, part of the Leonard Davis Institute of Health Economics, Volpp is in perpetual pursuit of carrots that will lure patients away from lethal behaviors. In a series of ongoing studies, Volpp has found evidence that money can motivate some patients to stop smoking, lose weight or keep up with their daily medication. Read more on the results of these studies here