In order to keep down costs, companies typically reward a healthy lifestyle. According to a new study published in Psychological Science, how these incentives are framed - as penalties for those who are overweight and rewards for healthy-weight individuals - really makes a difference.

The authors explained that their study demonstrated how health insurance policies with higher premiums for overweight customers are perceived as stigmatizing and punishing.

David Tannenbaum, who works at the Anderson School of Management at the University of California, Los Angeles, and colleagues set out to determine whether the framing of healthcare incentives might affect people's attitudes toward those incentives.

Tannenbaum wrote "Two frames that are logically equivalent can communicate qualitatively different messages."

The first study - imagine you are an employee

In this study, 126 volunteers read about a fictional company that was trying to manage its employee health-care policy. The company was faced with escalating healthcare costs, partly because more and more of its staff-members were becoming overweight. The participants looked at one of four final policy decisions.

The "carrot" plan awarded a $500 discount to people of healthy body weight

The "stick" plan raised premiums by $500 for overweight employees

The two functionally-equivalent plans were structured in such a way that the overweight employees paid $2,500 annually in healthcare costs, compared to the healthy-weight employees who paid just $2,000.

There were two more "stick" plans in which overweight employees paid a $2,400 premium.

The participants were less likely to endorse the "stick" plans because they were perceived as a punishment for being overweight. However, they did not seem to distinguish between the three "stick" plans, in spite of a $100 difference in premiums. Rather, they appeared to evaluate the plans on moral grounds.

They concluded that it was morally wrong to punish somebody for being overweight, no matter how much money was saved.

According to the data, framing incentives in terms of penalties had specific psychological consequences for the overweight people. Those with higher BMIs said they would feel particularly stigmatized and unhappy with their employer under the three "stick" plans.

The second study - imagine you are the decision-maker

In this study, the volunteers were asked to imagine they were the decision-makers. The aim was to see whether the "stick" and "carrot" plans may have reflected underlying attitudes.

Those who demonstrated high levels of bias against overweight people tended to pick the "stick" plan. However, their justification depended on whether their bias was implicit or explicit.

Tannenbaum wrote:

"Participants who explicitly disliked overweight people were forthcoming about their decision, admitting that they chose a 'stick' policy on the basis of personal attitudes. Participants who implicitly disliked overweight people, in contrast, justified their decisions based on the most economical course of action."

Ironically, anyone with a totally economic concern would chose the "carrot" plan, because the company would save $100 per staff member. However, the participants tended to select the strategy that made them look as if they were punishing the overweight employees. In some circumstances, when the "stick" policy meant financial costs for the company, they still tended to opt for the "stick" plan.

These framing effects could have major consequences across many real-world domains, Tannenbaum believes.

Tannenbaum said:

"In a broad sense, our research affects policymakers at large. Logically equivalent policies in various domains - such as setting a default option for organ donation or retirement savings - can communicate very different messages, and understanding the nature of these messages could help policymakers craft more effective policy."

Higher premiums or exercise

Pay more for health insurance or do exercise! - when a health insurer started requiring obese people to pay higher premiums for not doing anything about their weight, enrollees responded positively, researchers from the University of Michigan Health System and Stanford University reported in Behavioral Translational Medicine (May 2013 issue).

When faced with having to pay up to 20% more for health insurance or do more exercise, most of the enrollees gradually met their fitness goal of walking 5,000 steps per day through an internet-tracked walking program. Enrollees with medical conditions who had waivers from their doctors were exempt.

Written by Christian Nordqvist