HealthyWage is betting on the scientifically proven fact that people who receive financial incentives are more likely to stick with a weight loss program and lose more weight than people who received no incentives. “Traditional therapies are not working for a lot of people, so they are looking for creative ways to help people lose weight and keep it off,” says Dr. Donald Hensrud, a medical editor of The Mayo Clinic Diet.
HealthyWage organizes financial incentive-based weight loss contests for both businesses and individuals. In October of 2009, HealthyWage launched its first weight loss challenge. To date; more than 100,000 individuals in more than 500 companies have participated. Many contestants have lost more than 100 pounds. And the biggest winner to date lost 37 percent of her body weight.
The scientific research
A March 2013 study by none other than the august Mayo Clinic chronicled 100 healthy Mayo employees for one year. They had to have a body mass index of 30 to 39.9 in order to participate. (The Centers for Disease Control and Prevention labels an adult obese if they have a body mass index of 30 or higher.)
The study assigned them to four weight loss groups. Everyone had the same goal: lose four pounds per month. Participants in the incentive groups who met their goals received $20 each month, while those who failed paid $20 per month into a bonus pool.
Sixty-two percent of the people who received incentives completed the 12-month challenge while only 26 percent kept at it with no incentive. And the incentivized group’s mean weight loss was 9.03 pounds compared to 2.34 pounds for the two groups with no financial incentives.
“The take-home message is people can achieve sustained weight loss by financial incentives,” says Dr. Hensrud, who was the senior study author.
How the weight loss wager works
Although the company has a 10 percent challenge for individuals (they have to lose 10 percent of their body weight in six months to double their $150 bet), the most popular program is the Team Challenge, which is similar to The Biggest Loser.
Companies form teams for the 12 week challenge. The first prize is $10,000; second price is $5,000 and third prize is $3,000. HealthWage also gives away another $2,000 in smaller prizes “to keep people engaged,” says co-founder Jimmy Fleming.
The company acts as the “bookie” to help employers come up with the prize money. Employees typically have to pay an entry fee. Fleming says many companies subsidize the entry fee or chip in to make the prize higher.
The return on investment for the companies is that they successfully change behavior and have healthier employees. This can save them money, especially if the company is self-insured.
HealthyWage has an extensive website with fitness and weight loss ideas to aid teams in their quest for the prize. Participants can track their weight loss on the site as they go.
The company conducts its verified weigh-ins (you need two for any given challenge; one at the beginning and one at the end) at designated healthcare facilities and health clubs with rules guiding what participants need to wear and what kinds of scales can be used, to keep things equal. The verifier reports the results directly to HealthyWage.
The weight loss challenge’s winner in Michigan
The GTB Economic Development Corporation is the economic arm of the Grand Traverse Band of Ottawa and Chippewa Indians. The Tribe employs 1,600 people in all its enterprises, which includes operations, resorts and casinos in five counties.
Chuck Stewart, risk and safety director, says the HR department heard about the HealthyWage challenge three years ago and was excited about the proposal. The Tribe is self-insured, so it made economic sense to introduce this program “to control and maybe even reduce our insurance costs.” He says HR is particularly concerned about heart disease and diabetes in its employee base.
Pounds lost translate into dollar savings, he says. One team lost a combined 504 pounds. That translated into over $5,000 in health care savings, he reports. He says the Tribe spends over $18 $16 million in healthcare costs annually. “Any way we can reduce that number is truly beneficial to our bottom line,” he says.
The challenge was the HR department “couldn’t dictate to individuals how to live their lives.” He felt HealthyWage’s program of financial incentives and education “was a great way to teach our employees how to get fit and stay healthy.”
Northern Michigan is known for blizzards in January through March. Stewart says the timing was perfect to get people into the gyms. (The Tribe’s hotels have fitness centers and there is one in the community, too.)
The first year the Tribe had eight teams composed of five members each. One of those teams placed second in the state and won a jackpot.
“That peaked interest in the rest of the tribe,” Stewart reports.
Today over 60 employees are jockeying for this year’s $10,000 prize. It’s department against department for this year’s challenge, which started recruiting participants after Thanksgiving.
The Tribe provides new workout clothes and gym shoes to the company’s winning team. It also had its chef devise healthy menus the employees could prepare at home in 10 minutes.
Stewart says family members are encouraged to join the teams “since we have to pay for them.”
Stewart says HealthyWage helps him with marketing. The company also sends participants encouraging emails. He adds the company is “really good at eliminating cheating.”
After the final weigh in, the Economic Development Corporation has a banquet for all participants. “Everyone is a winner because everyone lost weight,” says Stewart.
How HealthyWage got started
Fleming and his co-founder David Roddenberry, who both worked in finance prior to founding HealthyWage, had life-long struggles with their weight. Fleming had studied behavioral economics and Roddenberry has a degree in public health. They decided to put their skills to work.
They both had heard about office biggest loser competitions. But the contests were badly organized and the prize money was not inspirational. “We saw the glimmer of a business,” says Fleming.
Then in 2008 they read a Harvard/University of Pennsylvania study which discovered betting was three times more successful in getting people to lose weight than any other method. “We decided to replicate the academic research” he explains.
Today Office Depot, Zales and 7-Eleven employees have all lost weight in their cash-fueled programs, along with employees at dozens of Fortune 500 companies, health systems, universities and large government employers.
Would your company benefit if it offered a weight loss competition like this? Would you participate? How do you think it would affect your healthcare costs?
Tanya Zukerbrot charges her clients $10,000 to help them lose weight. Do you think financial incentives are the solution?