Losing Weight to Earn Cash: Groups of Dieters Lose More than Individuals

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Cash is a powerful motivator when it comes to shedding pounds, and the lure of money is even greater when dieters win or lose as a group.

Previous studies showed that earning money as a reward for losing weight is an effective motivator — researchers at the Mayo Clinic recently found that participants with $20 a month on the line lost an average of nine pounds in a year, four times greater than the amount lost by those who didn’t have a cash initiative. Now, a study published in the Annals of Internal Medicine finds that money motivates groups even more powerfully than it does individuals.

It’s not a new idea — crass as it may seem, cash may be one of the easiest ways to inspire healthy behaviors. More employers are using financial incentives to help their employees get in shape, and office wellness programs offering cash rewards are likely to continue since the Patient Protection and Affordable Care Act will expand such health outcome–based incentives to up to 30% of total health insurance premiums beginning in 2014.

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But how does cold hard cash compare to other successful weight loss strategies such as partnering up with a fellow dieter? And if each can melt away pounds, how effective would both strategies be together? That’s the idea behind the current study, which involved 104 obese individuals who attempted to lose weight using one of three different strategies.

The first group received no financial incentives, and were only provided with a link to an online weight loss network with monthly weigh-ins for which they were reminded via text message or email. The second group had the same information and weigh-in plan as the first group, but they were also offered $100 each month if they met their monthly weigh-in goal. The final group was also offered the $100 monthly incentive, but instead of losing weight on their own, they were placed in groups of five, in which all of the members remained anonymous. Each month, only the group members who were at or below their individual target weight could split the $500 among them. Those who didn’t meet their goals were not part of the split, and if no members met their weigh-in goals, no one got any cash.

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After six months, the participants in the group-based strategy lost an average of seven pounds more than the participants in the individual-incentive group, and 10 pounds more than the group with no financial incentives.

Not surprisingly, the chance to earn more than $100, an option only available to those assigned to the group-incentive strategy, was a strong motivator. “[People] are often overly optimistic about their abilities relative to others and, thus, may have expected greater success, and a larger reward, than fellow group members. Second, expectation of a larger reward would have been reinforced because most group members did not meet their weight-loss goals in most months, leaving a larger reward for those who did meet goals,” the authors write.

However, four months after the weight loss intervention ended, the participants who lost weight and were rewarded for their loss on an individual basis maintained more weight loss than the other two groups. This suggests that the motivation provided by the group, and the greater cash reward, wasn’t sustained when the financial incentives went away. However, in a corresponding editorial, Jason Riis, a specialist in consumer health at Harvard Business School notes that it probably wouldn’t take much to reignite that motivation  with even a smaller monetary incentives after the study was over.

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That makes it a potentially attractive strategy for promoting healthy, and ultimately cost-saving behaviors, for some corporations and organizations eager to lower their insurance premiums and payouts, says Riis. He notes however, that the financial investment would be more feasible for companies with larger numbers of employees than smaller outfits with fewer workers:

In the current study, both incentive conditions required the guaranteed availability of $21 000 ($100 dollars per month, per participant) in case every participant succeeded every month. Even if tripling the individual incentive (from $100 to $300) made it both more effective and cost- effective than the original group incentive, it would require the program to put 3 times as much money at risk (to guarantee payout if everyone succeeded). That could be more challenging for small programs (and small employers) than for larger programs (and larger employers).

As more companies implement weight loss plans, and reward-based strategies for improving wellness among their employees, the authors stress that different solutions may be needed for different organizations. In addition to cash rewards, Riis says there are other ways that companies can encourage healthy behaviors, such as offering healthier food in workplace cafeterias and reducing unhealthy temptations such as vending machines in the office. It may take trial and error for employers and employees to figure out which methods work best for them, but at least there’s encouraging news that companies will have more options when it comes to coaxing workers to take better care of themselves.