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A surefire way for companies to grow their bottom lines—by shrinking yours.

By Noah Bunn


I’m a magnet for unruly children. Their screams for ice cream follow me down frozen food aisles, and there’s always one taunting his parent for a treat at big-box stores. The 3-year-olds usually have the game down: New toy enters basket, tantrum goes away. When parents don’t balk, we all pay. 


Kids have mastered the art of the bribe, and now the healthcare industry is taking a page from their playbook. In 2009, the U.S. spent $190 billion on obesity-related healthcare, and that amount spirals higher each year. Beyond the dollar cost, we’re paying with a reduced quality of life, chronic illnesses, and insurance premiums that are becoming out of reach.


Enter Aaron Day, founder of Tangerine, an incentivized wellness company whose business bribes employees to lose weight and keep it off. They can pay big: The company says it has mailed checks for more than $1,000. “But you might be surprised how little it takes to get people motivated,” says Day. “Try $5 for a 1 percent drop in weight. And an identical payment for each three months you keep it off.” (For a 200-pound man who loses 20 pounds, that’s $200 a year.)


Tangerine isn’t philanthropy; it’s a profitable business. As companies pay their employees to trim the fat, lower insurance premiums more than cover the cost of incentives. Tangerine’s bribery, just like giving a screaming tot a toy, is at work across the country—with adults as the target.


I don’t have to look far to illustrate this point. For years, my pedometer-wearing uncle, a 51-year-old banker in Nashville, Tennessee, would call me after work. Without fail, he’d be on a fist-flailing walk around his neighborhood, counting his steps to a slimmer waistline. But year after year, the only thing that would change about his appearance would be the number of gray hairs in his beard.


Then someone bribed him.


A year ago, he signed up for a workplace-sponsored weight loss competition. The premise was simple: Pay $10 to enter, and the employee who loses the highest percentage of his or her body weight takes home the pot. After three months, he lost 40 pounds—and won $500.


And when it was time for round two of the competition, he was there to sign up—and win—again. Before the end of the summer, he’d ditched the pedometer for a bicycle and logged his first 1,000 miles. To date, he’s lost more than 50 pounds, pocketed a grand, and hasn’t been in this kind of shape since college. And the health insurance discount his employer offered in exchange for completing a health screening was enough to prompt his first checkup in 20 years. 


Wellness programs like these are booming in the U.S. At last count, there were more than 200 such companies, and incentivized wellness is expected to be a $5.8 billion industry by 2015. But today’s programs are a maze of finger-pricking health screenings, time-consuming surveys, and online diet plans. Even the most results-focused plans stop short of taking a big-picture approach to wellness. Health, we’ve come to understand, is more than just aches and pains and doctor visits. It involves family, household dynamics, and a whole host of other issues. The causes of obesity are particularly complex. 


Here’s an idea that adopts this domestic overview and nudges families toward wellness with the same sort of results-based incentives that have been successful for Tangerine. Think Dr. Phil meets Suze Orman, with a free vacation thrown in for good measure. 


My uncle and I grew up in a family where “husky” was the norm. Food was at the center of every celebration, ordering cheese dip at a Mexican restaurant was a reward for straight As, and exercise was something that we watched other people do on TV. Duke economist Eric Finkelstein says that kind of food-focused reward system plays a large part in me being overweight today. It’s an undisputed fact that most people who are obese as children stay that way as adults, and that’s why this business idea adopts Finkelstein’s kid-driven, family-focused method to generate healthcare savings today and prevent weight-related health issues tomorrow. 


Finkelstein is not just an economist; he’s a health-minded father of three who isn’t afraid of a good bribe. “My son has an Xbox, and he loves to play Modern Warfare. But I have a deal with him where he has to log his physical activity and outdoor time every week, and he has to get five hours of physical activity. When that doesn’t happen, he can’t play the Xbox.”


But as Finkelstein has applied this sort of incentive structure to his research, he’s found that children aren’t the only ones who benefit. The whole family does. 


Preliminary results from a new Duke University study show that children may be the key to family wellness. Researchers gave children and parents pedometers to count their steps, and a kid-focused incentive structure to get the family moving. “The prizes were pretty big, like tickets to Universal Studios and the zoo, and the kids were crazy pushing their parents to go out and exercise with them. Kids are incredibly good marketers, and if you can get them pushing health, they’ll do it.”


And when a business model accounts for improving a whole family’s health, employers can see their insurance premium savings multiply. These bigger savings mean companies can offer better incentives. Here’s how a family-focused, holistic wellness program could deliver better results than anything on the market.


Step one: Meet your new life coach. Tech-based coaching like Tangerine can only take a family so far. (Tangerine likens their method of picking weight loss strategies to Netlfix’s recommendation engine.) Using in-person coaching sessions, we’ll be able to identify goals and incentives suited to each family. Just as Finkelstein’s 10-year-old loses his Xbox if he doesn’t exercise, our coach will hold a family to its goals and offer rewards each time they’re met.


Step two: Shed more than pounds. Our holistic approach looks beyond pounds lost, with the life coach addressing factors that improve each family’s wellness. Does poor budgeting lead to a fridge stocked with high-calorie, low-cost food? We’ll fix the problem, applying the same sort of cash-based incentives Tangerine uses for weight loss to bribe a family back to financial health.


Step three: Cash in. A family who lives up to its coach’s proposed lifestyle changes can save their employer thousands in healthcare costs. That’s enough to fund real rewards. Disney World, anyone? 


It’s just this kind of hold-them-to-the-fire approach that Eric Finkelstein says can make the holistic family wellness plan work. “Unless you design the incentives to make it easier and cheaper for families to engage in the benefits associated with wellness, they’re guaranteed to fail. Most of the interventions don’t do that. They’re information or education, but at the end of the day they don’t lower barriers to being healthy. And so people don’t change.”


Until you bring in the kids. Besides being excellent bribe-takers, kids, Finkelstein says, are master marketers. “They’ve proven more effective at changing their parents’ eating and exercise habits than any corporate wellness program out there,” he says.  


Back in 2004, when Aaron Day made Tangerine’s first pitch to a client, he had a tough sell convincing them that paying employees to slim down made business sense. Now that incentivized wellness has the attention of corporate bean counters, Day believes business models reaching beyond weight loss could pay off for everyone. “If we could take some of these other dimensions, whether it’s financial planning or anything else where there could be a measurable outcome,” he says, “then you could use a parallel structure to what we have right now.” 


Even so, Finkelstein isn’t convinced that companies are only looking out for their bottom line. He says there’s more to this industry than return on investment.


“When employers or companies like Tangerine do these programs, they certainly hope that they generate improved health, but I’m not entirely convinced that’s their only metric of success. You have to think about what is the ultimate measure of success. For Tangerine, on some level, it’s profits and a sustainable business model. For the employer, it might be better employee retention or generating good public will.”


No matter the motivation, the bottom line is this: There’s money to be made in slimming down America, and the family-focused approach to holistic wellness is ripe for innovation. Children are the key; they’ve proven more effective at changing their parents’ eating habits than any corporate wellness program out there.


Now if someone could just figure out a way to make them behave at the grocery store. 


Noah Bunn is the associate editor of Spirit magazine.


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