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Paying people to lose weight helps drop pounds and healthcare costs


From Sunday's Washington Post:

Tangerine, based in Boston, designs weight-loss programs that employ economic incentives. The company is modeled on recent economic research showing that paying people to lose weight causes their pounds to fall off faster. Eric Finkelstein, an economist with RTI International who has spoken with Tangerine executives, recently conducted a study in which people were paid either $7 or $14 per percentage point of body weight they lost.

After three months, people with no incentives lost about two pounds. The $7 group lost about three pounds. The $14 group: five pounds. Members of the more expensive group were also five times more likely than members of the no-money group to lose 5 percent of their body weight. One person netted $140. Were they more excited about losing weight or about the money? "I think they were most excited by the $140," Finkelstein said.

In Tangerine's programs, employees earn $3 to $7 for every percentage point of weight lost and may earn additional rewards in team contests. Aaron Day, the company's founder, has also baked in incentives for continuing to keep the weight off. "Let's say the reward is $5 for each 1 percent," Day said. "If I lost 3 percent in the first quarter, I earn $15. If I lose another 3 percent on top of that in the second quarter, then I would get $30 because now in total I have lost 6 percent."

An average of 140 employees at Wesley Willows participate in the program, which started eight months ago. They get $3 per percentage point of weight lost. Together, they have lost 806 pounds. Holmgaard said the company has spent $11,500 on the Tangerine program, including rewards. The company's health-care costs have tumbled more than $146,000. "Certainly paying them gets their attention," Holmgaard said.

You can read the entire article here.


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