We all know that incentives work. That's why you always read about the "low prices" and the "sale" about to start, or the "limited-time offer." They're incentives to buy this or that. A server at a restaurant is incented to provide good service to get a good tip, and a salesperson is incented to sell by getting a commission. What a good idea it must be to apply this idea to healthcare, right?
Maybe the idea of incentives applies to healthcare. I take no position on that subject. But I do know that when the sprawling bureaucracy of a health insurance company tries to apply the idea, it turns into yet another costly bit of overhead that yields no benefits beyond allowing top executives who float blissfully above the facts and reality to claim that they're modern and innovative. Right.
Incentives in business
A business has strong incentives -- to get incentives right! A giant commercial or government bureaucracy has NO incentive to get them right. The business is aware that it's spending money to get customers, money that could be spent on an endless number of good things, from advertising to improving the product/service, to improving customer service to get more repeat customers, and on and on.
Here's the key thing: incentives are old news in businesses that have customers and need to make a profit. There is a long history of giving incentives, measuring how effective they are, and adjusting accordingly.
For example, in retail there were specialists who carefully controlled each season's products and set the incentives based on the experience of measuring the results. Already in the 1990's software products began to emerge that would take line-item POS (point-of-sale terminal) data from the last few years, and predict what would be the best time to start a sale, on which products, in which exact stores, and how deep the cuts should be. After side-by-side testing in multiple retail chains, the math-driven sales proved to be more effective than the ones generated by the best, most experienced people. So the industry transitioned to the algorithmic approach -- it's now malpractice if you don't use algorithmic sale incentives in retail.
Retail has gotten amazingly effective with incentives, following the classic path to excellence in AI/ML as I described in this series of posts.
Incentives by health insurers
Given this background, when the health insurance giants finally decided to apply incentives to their insured population, naturally they carefully studied incentives in other fields and adapted state-of-the-art techniques to their situation, right? WRONG!! In every case I've seen, they've done the dumbest things possible, not just starting from incentives 1.01, but screwing up so badly that any internal measurement system (which of course was NOT in place) should have resulted in the prompt cancellation of the project and demoting everyone concerned to a starting position opening mail. None of which happened, of course.
Incentive Case Study: Anthem
Anthem is an excellent health insurance company. It and its managers strive to be industry-best and provide great service to the employers and individual customers it serves. I am using Anthem for the case study here NOT because they're the worst -- far from it! I'm featuring them simply because I'm a customer, and so get a ground-level view of how things work there.
Sadly, as a giant, heavily-regulated bureaucracy, Anthem lumbers along and, along with its peers, gets really important things wrong. I wrote about the mess they made a couple years ago, first by allowing themselves to be hacked, and second by responding to the hack somewhat, ahem, ineptly.
Some time ago Anthem decided that Wellness and Health Incentives were something they should dive into. They now appear to be thoroughly committed to it, as they say loudly and clearly on their website:
Some of these programs may be truly wonderful. I make no comment on them. But I doubt that the one that was pushed onto me was exceptional, so let's dive in.
I decided it had been too long since I'd had a general health check, so I signed up for one and got it. After a while, I got a packet of stuff in the mail. Here's the top page:
Anthem clearly had gotten the claim for my visit and auto-enrolled me in their incentive program to get me to do the stuff they say, including getting such check-ups regularly. Wow, the incentive-program-babies who designed this program thought, we'll pay him some money for getting a check-up and maybe he'll do it again next year, hoping to get another card in the mail -- though of course we won't breathe a word about that.
Let's check out the rest of the package. Next page I get a wonderful, inspiring picture of how exercise makes me healthy:
Next page, reality starts to hit. No more nice pictures and color. Just the facts, ma'am (the card itself was glued onto this page):
It's a gift card kind of thing! Except it's "pre-paid," and is accepted where Visa debit cards are accepted, but when you use it, you've got to lie and say it's "credit." Hmmm. And NOWHERE does it say how much money is on the card! I have to call or go online to find out. And of course the card doesn't say Anthem, it says SVM. Who are they?
Maybe I'll find out. Let's keep on. Next page:
Great. When I get a regular credit card, I call a number to make it live, and then away I go. For this one I have to read something and then check somehow what's on it. I wonder how much IS on it? I hope eventually they'll tell me. First I better read the rest.
Man, this print is getting mighty small! I wonder if I have to pass a test before I'll be allowed to use the card that may contain some secret amount of money that no one will tell me. Minus whatever fees and other stuff that they jam into it when they feel like.
Reading carefully, I find out that, even though it's a debit card, like for your bank, I can't just get the cash out of the card! What the &*&&$&*()$ is THAT about?? It's an incentive, darn it! A incentive that's a money incentive -- and I can't get the cash and spend it?? What is this, if I go to Burger King and order something they don't approve of the card won't work?? Who knows??!!
Reading more, I can't use it at an automated gas pump. Or at most restaurants. And there's a PIN, which I have to call to set -- in TINY print in the middle of the TINY PRINT page? I thought I was supposed to select CREDIT, and credit cards don't have PIN's. What's going on?
Maybe the next page will help:
Or maybe it won't. Or the next 3 after that, which are more of the same, and which I refuse to read.
Finally, last page, bigger print:
This appears to be the cheat sheet. This I can read. It appears I really do have to go online and enter a bunch of stuff, and remember all the conditions on using it, including the ones they don't repeat on this sheet. Maybe I can even find out how much money they're giving me!
If I were a regular person with some mild interest in whatever this incentive is, I would have dropped out by now. But I'm a fanatic and want to see how this story ends, so I'm going on to the next step. On-line we go! First step:
Get my card, copy the numbers in. Next step:
Put some more numbers in. Next step:
I appear to be in, but not really. I have to go back, enter the security code again and also enter the hard-to-read code they put in to stop robots. Wow -- all I can think is, this incentive must be huge. Why else would they be making it so hard??
Finally, I get logged in:
I think I've said "wow" a few too many times, but I should have held off for now. Tucked away in the upper right corner is the size of the golden goose I've spent all this time and effort seeking: $50! Maybe. Sort of. Except not in cash. And minus whatever fees. And not at restaurants or gas stations unless you follow the rules. And maybe there's a PIN, check the amount before each time you use it because you might have been dinged a fee, and...
And before I can touch any of it anywhere, I've got lots more information to enter. I'm outa here!
Conclusion
This incentive card program is one of the more bone-headed, dysfunctional things I've encountered in a while. Lots of lawyers, bureaucrats, managers and even publicity/image people contributed to it, but did anyone with, you know, real knowledge of how things like this work ever get a shot at it? The number of steps to get rewarded and all the uncertainty and conditions are guaranteed to produce maximum drop-out. In the reward card business this is called "breakage," and unethical rewards people try to maximize breakage; Anthem should be up for "rookie of the year" in the breakage stat.
It's one thing to try to create good behavior by giving an incentive. It's another to dangle the promise of an incentive, trick people into going through a horrific maze that most won't make it through, to get the incentive (of unknown value!), with the primary result that your basic impression of the health insurance company as incompetent and wasteful and something you should ignore whenever possible is strengthened.
Is anyone out there listening?
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