Behavioral economics comes to health care

One of the most interesting developments in the search for disruptive solutions that lower costs and improve quality is the arrival of behavioral economics to the field of health. People who can help companies design systems to nudge populations in the right direction will be increasingly sought after. From this week's Economist - Getting on the treadmill:

Perhaps surprisingly, the most interesting incentives have been developed in an emerging economy: South Africa. The Discovery group, based in Johannesburg, has crafted a programme called Vitality that applies the air miles model to health care. You earn points by exercising, buying healthy food or hitting certain targets. [...]

Discovery has formed alliances with a host of companies to provide rewards linked to your vitality level. Pick'n'Pay, a South African grocery chain, provides discounts of up to 25% on 10,000 healthy foods. Discovery can measure whether people actually go to the gym, rather than just join, by swiping their membership cards. It says it has solid evidence that participation in the programme more than pays for the rewards: active participants are less likely to fall ill and, if they do, they spend a shorter time in hospital.