Financial Incentives Can Encourage Weight Loss

Sept. 11, 2007— -- Money motivates people to slim down. Overweight employees who were paid a small amount lost more weight than those who weren't compensated for their efforts, according to one of the first studies to examine such a strategy at workplaces.

"Lots of companies are experimenting with rewarding people for weight loss, and this study provides evidence that paying people to lose weight works," says Eric Finkelstein, a health economist with RTI International, a non-profit research organization in Research Triangle Park, N.C.

He teamed with researchers at the University of North Carolina-Chapel Hill to recruit more than 200 overweight or obese employees in North Carolina. A third were given no financial reward for their weight loss after three months; a third were given $7 for every 1 percent drop in their body weight; a third were given $14 for every 1 percent decrease. The participants were not given a structured diet and fitness program.

After three months, those who received no money lost an average of 2 pounds. Those in the $7 group lost 3 pounds; those in the $14 group lost 5 pounds.

Participants in the $14 group were more than five times more likely to lose 5 percent of their weight, an amount shown to provide health benefits. The findings are reported in September's Journal of Occupational and Environmental Medicine.

Finkelstein says it's still unclear whether participants will be able to keep the weight off and whether paying people to lose weight is a profitable strategy for companies.

About 66 percent of people in the USA are overweight or obese, which increases their risk of heart disease, diabetes, cancer and other illnesses. Health experts consider a person obese if he or she is 30 or more pounds over a healthy weight; overweight is 1 to 29 pounds over that standard.

Obesity has been linked to higher medical bills, greater absenteeism, reduced productivity, increased worker-compensation costs and higher disability expenses, Finkelstein says.

He calculates that the price of obesity at a company with 1,000 employees is about $285,000 a year in increased medical costs and absenteeism.

The higher expenses are absorbed by all employees, who pay higher health care premiums; by businesses if they have to hire replacement workers or pick up a larger share of insurance costs; and by obese employees if they aren't paid for their time off, Finkelstein says.

Some companies are working to turn that around by offering incentives to promote good health, he says. And one of the nation's largest insurers, UnitedHealthcare, announced in July that it would start offering employers new policies with higher deductibles for employees who smoke, are overweight or have high cholesterol and blood pressure.

Gary Foster, director of the Center for Obesity Research and Education at Temple University, says, "Weight control is tough work, and any incentives that employers can provide would be welcome among the millions of Americans who are trying to manage their weight."

Obesity expert James Hill of the University of Colorado Health Sciences Center in Denver says the study should inspire employers to offer inducements for weight loss.