How financial incentives were x3 more likely to make employees quit smoking
Smoking is the leading preventable cause of premature death in the United States, accounting for nearly 438,000 deaths each year.1 On top of the negative health consequences, smoking has been linked to decreased productivity in the workplace. As a result, researchers have attempted to use behavioral science techniques to nudge smokers towards decreasing their rates of smoking.
However, prior studies using financial incentives for smoking discontinuance have failed to show significant effects on cessation rates, likely due to small sample sizes and insufficient incentives, some which were as low as $10.1 Recognizing these design flaws and the importance of smoking cessation, behavioral scientists at multinational company General Electric developed an intervention to decrease employee smoking rates.
Conducting a randomized, controlled trial, the researchers tested the effectiveness of financial incentives up to $750 for improving long-term rates of smoking cessation.1 The success rates for incentivized employees were three-fold: 14.7% stopped smoking, compared to 5% of employees who did not receive incentives.
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Rating = 5/5 (significant results, direct positive impact on the lives of participants, the study would benefit from more long term data on relapse rates)
How financial incentives increased smoking cessation rates by 200%
|Offering 100$ for completing a community-based smoking-cessation program||10% increase in the participation rate and triple the rate of program completion (compared to control group)|
|Offering $250 for smoking cessation within 6 months of the program||Nearly double the rate of smoking cessation within the first 6 months|
|Offering an additional $400 for abstinence from smoking for another 6 months from the original cessation date||Close to a 6% increase in long-term smoking discontinuance|
General Electric: A major American corporation and one of the most-diversified corporations in the world. General Electric’s products include electrical and electronic equipment, aircraft engines, and financial services.
Nudges: Techniques to change people’s behaviors in predictable ways without forbidding any options or significantly changing economic incentives.
Financial incentives: A specific type of nudge, financial incentives entail offering monetary benefits to motivate certain behaviors.
Smoking as a health problem
Smoking is the leading preventable cause of premature death in the United States.1 Among those who smoke, 70% report a desire to quit, but the annual success rate is only 2% to 3%.
Smoking in the workplace
Employers will benefit financially if their employees stop smoking, since increased productivity, decreased absences, and reduced incidences of illness can amount to an annual gain of $3,400. Although there is evidence that people prefer to work for companies that offer attractive benefit programs, few offer full coverage of smoking cessation services. As a result, smoking – and especially employee smoking behavior – is an important issue to address.
Can financial incentives have long-term impacts?
Prior studies have shown that providing smokers with financial incentives increases enrollment in smoking discontinuance programs and short-term cessation rates, but have not found significant increases for long-term cessation, regardless of whether studies are applied to work settings or not.1 However, in order to see success in preventing health issues as well as increased work productivity, long-term behavioral change is the goal.
Employers are incentivized to encourage cessation
Up until General Electric’s experiment, financial incentives related to health care were primarily directed toward health care providers.1 Since 40% of premature deaths in the United States are due to unhealthy behaviors like smoking or poor dietary habits, incentives directed toward patients have greater potential to change health behaviors. Work sites are especially promising for encouraging smoking cessation since employers are also motivated to decrease employee smoking, with the hope for increased productivity and decreased health coverage in exchange. In other words, employers are loss averse: they want to promote behaviors that will help them avoid losses (i.e. productivity and health coverage).
Participants: Smokers at General Electric
The researchers at General Electric used a controlled experimental manipulation to test their intervention.1 Participants were employees under the corporation and were recruited to the study on the basis of their smoking habits and the assurance that they did not use any tobacco products other than cigarettes.
Bigger incentives; bigger sample size
The researchers drew from the design flaws of prior studies that used financial incentives to promote smoking cessation by ensuring that their incentives had greater value and that they used larger sample sizes.1 They randomly assigned 878 employees to two conditions: 442 employees were only given information about smoking cessation programs, while 436 employees were given information about smoking cessation programs and provided financial incentives.
The financial incentives
- $100 for completing a community-based smoking cessation program;
- $250 for actual smoking cessation within 6 months after participants enrolled in the study, which was confirmed with a biochemical test; and,
- $400 for abstinence from smoking for another 6 months from the original cessation, which was also confirmed with a biochemical test.
All participants were followed for at least 12 months, regardless of the experimental group they were assigned to. Those who received negative results from the biochemical test were followed for an additional 6 months to track cessation.
The 4E framework
The use of financial incentives to motivate smoking cessation exemplifies the 4E framework, a behavioral change approach that seeks to encourage specific behaviors through increased access to services, incentives, information, and social networks.2 4E interventions enable, encourage, engage, or exemplify target behaviors:
- Enable: General Electric provided its employees with access to services that enabled the health change behavior that was desired. Providing both information about community-based smoking cessation programs and financial incentives to participate allowed any willing employees to participate in smoking cessation.
- Encourage: The driving force behind General Electric’s experiment was a curiosity to explore whether larger financial incentives would nudge employees toward smoking cessation. Indeed, the researchers found that their tiered incentives were effective for encouraging cessation.
- Engage: By encouraging employees to enrol in a community-based smoking cessation program, General Electric encouraged their employees to join a social network to engage them in smoking cessation. When surrounded by like-minded people who also wanted to change their smoking habits, employees were engaged in the health change process.
- Exemplify: General Electric demonstrated a commitment to helping their employees decrease smoking rates by maintaining commitment to their follow-up checks and associated incentives. By carrying out the experiment and indicating an interest to build incentivized cessation into their benefit program, General Electric exemplified their desired behavior.
Results and Application
Triple the cessation rate
The researchers found that the incentivized group had significantly higher rates of smoking cessation (14.7%) compared to the information-only group (5%). The fact that the intervention was three times more effective is significant on its own, but employees from the incentivized group also had significantly higher rates of discontinuance than the information-only group six months after their original cessation, at 9.4% and 3.6%, respectively.
Higher community program enrolment
Incentivized participants also had significantly higher rates of enrollment in a community-based smoking cessation program when compared to participants from the information-only group (15.4% compared to 5.4%), higher rates of completing the cessation program (10.8% compared to 2.5%), and higher rates of smoking discontinuance within the first 6 months after enrolling in the study (20.9% compared to 11.8%).
The program’s expansion
Based on the strength of the researchers’ experimental findings, General Electric now offers these incentivized smoking cessation programs for their 152,000 employees.1
Beyond General Electric
The study shows that rates of smoking cessation among company employees will be significantly higher when employees are not only provided information about discontinuation programs, but also when they receive financial incentives.1 Companies should consider the exchange of employee incentives with possible net gains from increased productivity and decreased absenteeism. If similar programs can be adapted, both corporations and individual health in the United States may improve.
|Health & Wellness||Gym memberships could be priced by how often the subscriber works out, becoming cheaper the more a person visits the gym.|
|Education||Some school programs have experimented with the idea of financial incentives to encourage kids to read more. Such interventions could take the form of a small financial prize for each book read.|
|Financial Services||Governments, employers, and financial institutions make use of financial incentives to encourage employees to save for their retirement early on in their career, which will lead to more financial stability in the future.|
- The study greatly improved the outcomes of the participants involved.
- The participant’s information was kept totally anonymous.
- The intervention respected participants’ abilities to make decisions while broadening their choice sets.
|Does the intervention demonstrably improve the lives of those affected by it?||
|General Electric’s experiment was designed to improve wellbeing, as smoking discontinuance improves employees’ overall well-being.1|
|Does the intervention respect the privacy (including the privacy of identity) of those it affects?||
|While smoking habits are a personal topic, no identifying information about participants was disclosed.|
|Does the intervention have a plan to monitor the safety, effectiveness, and validity of the intervention?||
Room for Improvement
|The intervention did not test whether or not it may have resulted in misplaced incentives, a possible side effect in financial-incentive interventions.|
|Does the intervention abide by a reasonable degree of consent?||
|Informed consent was gathered and all participation was voluntary, so the researchers respected the diversity of individual preferences.
|Does the intervention respect the ability of those it affects to make their own decisions?||
|GE provided employees with information that helped them make optimal choices.|
|Does the intervention increase the number of choices available to those it affects?||
|The experiment strengthened employees’ choice sets by offering and informing them of a community program to enroll in.|
|Does the intervention acknowledge the perspectives, interests, and preferences of everyone it affects, including traditionally marginalized groups?||
Room for Improvement
|It does not appear that marginalized communities were explicitly included, which could impact the generalizability of the results to employees with lower socioeconomic status or members of minority racial groups.|
|Are the participants diverse?||Room for Improvement||While unintentional, the researchers do acknowledge that 90% of participants were white and had relatively high education and income levels.1|
|Does the intervention help ensure a just, equitable distribution of welfare?||
Room for Improvement
|The intervention does particularly ensure a just distribution of welfare.|
Related TDL Content
The affect heuristic highlights how we rely on our emotions during decision making, which can result in quick conclusions without much thought. While the affect heuristic can lead to negative impulsive decisions, health campaigns can also capitalize on this heuristic to deter people from smoking. Take a look at this article to find out how fear can drive smoking cessation.
If smoking has such bad consequences for our health and productivity levels, why do people smoke in the first place? Hyperbolic discounting might be one of the culprits: humans tend to choose immediate rewards (the dopamine hit that comes from smoking) over rewards that will occur in the future (improved well being that comes from smoking cessation), even when the immediate rewards are smaller. Check out this piece for more information on hyperbolic discounting and how we can combat it.
- Volpp, K. G., Troxel, A. B., Pauly, M. V., Glick, H. A., Puig, A., Asch, D. A., Galvin, R., Zhu, J., Wan, F., DeGuzman, J., Corbett, E., Weiner, J., & Audrain-McGovern, J. (2019). A randomized, controlled trial of financial incentives for smoking cessation. The New England Journal of Medicine, 360, 699-709. https://www.nejm.org/doi/full/10.1056/nejmsa0806819
- Flanagan, A. E., & Tanner, J. C. (2016). A framework for evaluating behavior change in international development operations (IEG Working Paper 2016/No. 2). Independent Evaluation Group. https://openknowledge.worldbank.org/bitstream/handle/10986/25872/110890-WP-PUBLIC.pdf?sequence=1