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Behavior change is hard! But when done smartly, with the help of behavioral nudges, you can set yourself up to succeed. It’s all about building the right environment.
“You can change people’s thoughts, change people’s desires, and not necessarily have much impact on their habits. Habits change only slowly through doing.”
—Wendy Wood, professor of psychology and business, University of Southern California
“So, how do we apply this to health care? We found shocking statistics in preventative care, within our primary care practices.”
—Dr. Mitesh Patel, Director of the Penn Medicine Nudge Unit
TANYA OTT: It’s the time of year when you may be working your resolutions really hard—or silently laughing at everyone else who is.
Behavior change is hard! But the truth is, when done smartly you can actually set yourself up to succeed. It’s all about building the right environment.
I’m Tanya Ott and this is the Press Room, where we talk about the ideas that are important to your business today. For a couple of years now Deloitte has been hosting an annual Nudgeapalooza conference. The goal is to share some really interesting ideas about how behavioral economics can make your life better by improving health outcomes, nudging you to make smarter financial choices, and affecting public policy that affects you. We’re calling this episode of the podcast “New Year, New You.” And we’re gonna start with Deloitte’s chief data scientist.
JIM GUSZCZA: I want to give a high-level talk that maybe ties the conceptual room together, like the rug in the Big Lebowski.
TANYA OTT: That’s Jim Guszcza.
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JIM GUSZCZA: I'm someone who's interested in using data to help make better decisions. This has changed both the way government agencies and businesses are interacting with customers and citizens.
I always say that we should have three legs of the stool upon which rests employee engagement, customer engagement, citizen engagement, and so on. It's not just data and digital, it's the behavioral design. Thinking throughout human psychology, human factors is what we really need to go from indications to better outcomes. What is choice architecture? What is all the fuss about? It's not just the information you give people or the choices you give them, it's the way you frame, the way you communicate that information. The way you arrange the choices can have a disproportionate effect on people's behavior. Take into account what people want. The goals people would have if they had unlimited rationality, and unlimited self-control.
TANYA OTT: We make choices every single day: What to have to breakfast. How to save for retirement. Who to love. But the truth is we may not have nearly as much choice in the matter as we think. Let’s get started, starting with your health.
WENDY WOOD: How many of you remember the Strive For Five campaign? This kind of dates some of us, but I certainly do.
TANYA OTT: Wendy Wood is a professor of psychology and business at the University of Southern California.
WENDY WOOD: It started with the National Cancer Institute and the agricultural industry in California trying to convince us to eat five servings of fruits and vegetables a day. It seemed very successful at changing people's beliefs; as you can see it was also very expensive.
It was a huge national campaign, and when it started in 1992 only about 8% of us knew—that's hard to believe isn't it, given the current media?—but only about 8% of us knew that we should be eating five [servings of] fruits and vegetables a day. But in as short a time as three years, this program convinced 35% of us, over a third of us, that we should be doing this.
So this is incredibly powerful, right? Clear success, except when you start looking at behavior. At the beginning of the program, 11% of us were complying with this recommendation. At the end of the program, 10 years later, it was still 11%. So it had no effect on behavior.
TANYA OTT: The CDC ended the program in 2008 and started a new one the next year called Fruits and Veggies More Matters. The idea being that we shouldn’t just be shooting for five [servings of] fruits or veggies a day. We all need as much as possible. After that new program started, fruit and vegetable consumption actually went down.
WENDY WOOD: More and more people continue to be convinced, but we're just not changing our behavior. And there's lots of good reasons for that.
TANYA OTT: One reason? Unlike the decision to become an organ donor or make a regular contribution to your retirement account—where you can set it and forget it—changing lifestyle behaviors takes making choices over and over and over again. It’s about resetting your habits. And that’s hard! Consider this experiment Wendy and her team conducted at the campus movie theater.
WENDY WOOD: We had people watch movie trailers, and we gave them bags of popcorn, supposedly as a reward for watching and rating these movie trailers.
Unbeknownst to them, half of the popcorn bags were full of stale popcorn, and half were full of fresh. And the stale popcorn was really stale. We had popped it a week earlier, and then put it in a plastic bag in the lab. And then served it to people.
TANYA OTT: Then they asked people how much they liked the popcorn.
WENDY WOOD: And those who got the stale popcorn, as you can see, gave a rating of close to two on this scale. Those who got the fresh popcorn, unfortunately, didn't like it whole lot better. We didn't even get to the scale mid-point with these people, but clearly, the people who got the stale popcorn hated it.
TANYA OTT: But how much did they eat? After the movie, the researchers collected the popcorn bags and weighed them.
WENDY WOOD: People who did not regularly eat popcorn in the movie cinema, if they liked popcorn, it was fresh, they ate more. If they did not like the popcorn, when it was stale, they ate less. That makes sense. That's what you would expect; that is what all of us would have predicted.
What is interesting, though, is what happens for people who did have habits to eat popcorn in the movie cinema. Because these are people who just sit there and eat. They told us they hated the popcorn, but they ate it anyway.
This is what happens when behavior is cued automatically. This is what it means to not be making decisions, right? You're not wondering, is this something I want to do. Instead, you're just doing it based on cueing.
TANYA OTT: So why do people do this? Wendy Woods says it’s because our brains are actually made up of multiple interrelated systems. Habits are pretty much a basic system.
WENDY WOOD: So you can change people’s thoughts, change people’s desires, and not necessarily have much impact on their habits. Habits change only slowly through doing. We get rewarded for a response, and over time with repetition, habits change.
TANYA OTT: She says environment can play a big role in encouraging change.
WENDY WOOD: How often do you go to the gym? Well, it depends. You couldn't predict, unless you knew how motivated they were, what their self-control was. We focus on internal driving forces in trying to figure out whether someone's gonna do something. And that's true. When you begin a behavior, it's all about how much do you want to do it, how much self-control do you have?
But once you actually get into it, it becomes much more dependent on external friction. A study of cellphone users tracked 7.5 million cell phones for a month. And tracked the distance their users traveled to the gym, to paid gymnasiums. When it's easy to get to the gym, we go more. There was an exception, of course; the exception was very high-end gyms. People were willing to travel more than 3.7 miles, maybe 4 or 4.2 to get to the really high-end gyms. Or maybe high-end gym users were willing to travel.
You see the potential issues with correlational data. But the whole point here is that there can be friction in our environments that we don't see, but that our behavior responds to. And that help us form, or not, habits that are beneficial for us.
TANYA OTT: Think about the friction in your environment. One of my kids is notorious for her late-night movie binging. It’s a real problem. But it’s not totally her fault.
WENDY WOOD: Auto play keeps people binge watching because it starts the next show right when the prior one ends. And you don't have to make a decision. All right, you're into it before you realize it. My god, now it’s 1 o’clock. Yeah, we’ve all been there.
TANYA OTT: So, whether it’s good or bad for a person, environmental friction is a thing. But what about self-control? Maybe people who are healthier or wealthier or happier just have better self-control?
WENDY WOOD: The last couple of years we’ve learned that that’s not correct. That actually, when you observe these people who have high self-control, when you watch all of us, what you find is that they know about environmental friction; intuitively they know to select into environments that allow them to meet their goals. And avoid environments.
They're not hanging out in bars if they're trying to drink less, right? They're not going to the burger bar if they're trying to eat less. These are people who study in the library. They have learned to avoid subjects with their spouse that will create challenging discussions; these are people who have figured out how to keep themselves in situations that are low friction to meet their goals.
TANYA OTT: Basically, if we don’t pay attention to our environment, we end up acting in ways that are completely inconsistent with our goals. Like having dirty socks scattered all over the bedroom floor because the laundry hamper is in the closet.
But it’s bigger than us as individuals. There’s a lot that happens around us—that’s invisible to us—that has incredible power over us.
MITESH PATEL: I'd like to start off with thinking about the idea of human behavior as being the final common pathway for the application of nearly every advance in medicine.
TANYA OTT: Mitesh Patel leads Penn Medicine’s Nudge Unit. He says choice architecture—this idea that how choices are presented to us has an outsized effect on the choices we make—is a big issue when it comes to your health. Take, for instance, the choice architecture employed by a pizza chain on its website.
MITESH PATEL: You're ordering pizza. You're hungry. You go through, you order your pizza, you might add a soda, and then you go to hit pay. And they're able to look and see that you haven't added a dessert. And so, they ask you, would you like to add the chocolate lava crunch cake for just 4.99? We know you're hungry, you haven't had dessert. And in order to make it more enticing, they show the chocolate. I don't know if you can see this—it's seeping out of the chocolate cake. It's gooey, it's warm, and there's a choice here.
Now what people feel, that behavioral economics concept that people feel, is an anticipated regret. This idea that they're gonna finish their pizza, and they're anticipating that they’re going to regret the fact that they didn't order that dessert. And so more people are gonna say yes. And you know what they’ve done now, actually, is instead of having the buttons saying no and yes, there's just a big green button that says yes and the x in the top right-hand corner doesn't appear for about five seconds. So it makes it even more aggressive in terms of pushing you to order other stuff. You can think about how we might do that in health care.
MITESH PATEL: How do we apply this to health care? We found shocking statistics in preventative care, within our primary care practices. Patients who come in to see their doctor and are due for annual mammograms, breast cancer screening, nearly 60% of them haven't had a mammogram ordered by the time they leave the office visit, with their annual visit, with their primary care doctor. Patients who come in and are due for colon cancer screening come in to see their primary care doctor, 70% of them walk out the door never having colon cancer screening ordered before. Patients come in now during flu season—flu vaccines are recommended to essentially everybody now who's not allergic to them—80% of patients are not even ordered for a flu vaccine by the time they leave the clinic.
TANYA OTT: Maybe the conversations are happening, but a patient says, “I just don’t want to have a colonoscopy” or “I’m not getting that vaccine today.”
MITESH PATEL: But, 60, 70, 80% is quite high. There’s something going on in terms of the fact that physicians only have seven to 10 minutes with patients. Patients come in with a list of five or six things they want to talk about and none of these things are on that list. Right? It’s back pain, chest pain, it’s something else that they want to talk about. So how can we use active choice to address this? Essentially, what we did was we created a smart alert, which would prompt the physician—your patient is due for the flu vaccine. It would check to make sure they haven't already gotten it, they're not allergic to it, they haven't declined it already. Would you like to order it, yes or no? And they just had to click “yes,” it'd open an order set; they'd just click a button to sign it, and it's all set, or they click “no” and they can continue doing what they're doing.
TANYA OTT: Some doctors complained about the number of screens they had to click, but Patel and his team studied it over time and found the approach worked. And not just for flu vaccination. It also increased the percentage of patients who got a colonoscopy or mammography.
Eventually, the team turned its attention to what happens outside of the doctor’s office or hospital, when patients are at home. Many insurers offer financial incentives to get people to do biometric screenings, to be physically active, and to make other healthy choices in their daily lives. But the design of those incentives wasn’t really tested. They wanted to test different ways to frame financial incentives.
MITESH PATEL: We took 280 overweight and obese employees at our university. We asked them to download a smartphone app and strive for at least 7,000 steps a day. And we chose this because we didn't wanna get people who were already going for runs or the power walkers to just walk more. We wanted to get everybody above the minimum level. 7,000 steps is an area that the American College of Sports Medicine says is the minimum amount of activity you need to start getting your health benefits from physical activity. And so we followed them for three months and had a three-month follow-up period, but we randomly assigned them to a control group where you just got daily text messaging. Congrats, you met your 7,000-step goal or sorry, you didn't.
[Others got] a standard gain priming. This is the way most wellness and insurance programs are launched still today, which is if you do something, we'll then pay you for it after you do it. So every day you meet your goal of 7,000 steps you get a US$1.40.
The next was a lottery, where people had a 1 in 5 chance of winning US$5 or a 1 in 100 chance of winning US$50, and the lottery runs every day regardless of what you do. Mathematically, this comes out to US$1.40 a day over the course of a month.
Or a loss-framed arm where we tell you that US$42 has been put in a virtual account with your name on it, but each day, you don't meet your goal we take US$1.40 away. This idea that people are motivated by losses rather than gains.
Now what's interesting is mathematically, these are all the same. No matter what intervention arm you're in, if you meet your goal 10 times at the end of the month, you're gonna get about US$1.40 per day. In fact, we don't actually pay you any different. Everybody gets paid at the end of every month for their accumulated earnings, so the payments not different. But even though mathematically they're the same from a psychological perspective, they're really different, because as much as people like to get US$1.40 per day, they really hate to lose US$1.40 a day.
TANYA OTT: Here’s what they found. The control group—the ones who just got a text saying, “Congrats, you did it!” or “Sorry, you didn’t”—met the 7,000 step a day goal 30 percent of the time. The gain incentive group—the ones that got US$1.40 for each day they met the goal—they met the goal 35 percent of the time. Statistically that was no different than not paying people at all. The lottery group did a little bit better, but the loss incentive group—those who were told they had US$42 in a virtual account and lost US$1.40 every day they didn’t make the step goal—they did the best!
MITESH PATEL: Again, no difference in the way we paid people. Just the difference in the way we framed it. Nobody could be worse off than when they started, because you could only make money. You actually had no money to lose. There was no virtual account. We just told people that, but it makes a big difference in terms of how people behave.
TANYA OTT: Here’s one to ponder. One company uses this loss aversion form of motivation by selling employees an Apple Watch for US$25, but there’s a catch. If the employees don’t meet their monthly fitness goals, they have to pay back the entire cost of the Apple Watch. Talk about leverage loss aversion!
MITESH PATEL: In summary, medical decision-making is often suboptimal. I’ve shown you many examples of that. Subtle changes, just changing the default, asking physicians to make a choice now versus later, nudging people with prices, can have an outsized impact on our environment. And unfortunately, most of the environments have not really been evaluated for their design. And whether we like it or not, the current design is nudging us; it just may not be in the way that we want it to be. And so, Nudge Units are behavioral design teams that can really think about this process, use some of the expertise, and implement this in a systematic way to figure out how we can improve patient outcomes and ultimately save patients’ lives.
TANYA OTT: Dr. Mitesh Patel, professor of Medicine and Health Care Management at the Perelman School of Medicine at the University of Pennsylvania. He’s also director of the Penn Medicine Nudge Unit and was a keynote speaker at Deloitte’s Nudgeapalooza event last year at Georgetown University.
We also heard from University of Southern California psychology and business professor Wendy Wood and Deloitte’s chief data scientist Jim Guszcza in today’s episode of the podcast. The audio was recorded at Georgetown University at Deloitte’s Centers for Government Insights and Integrated Research’s annual Nudgeapalooza event.
On our website you’ll find a really interesting deep dive into behavioral economics and the idea of nudging. We talked with one of the pioneers, Nobel Prize-winning economist Richard Thaler…
RICHARD THALER: Early in my teaching days, I gave a very hard exam and the average grade on the exam was 72, and the students were furious with me. I was teaching at Cornell and the Ivy League students aren’t used to getting grades with such low numbers. And I had to figure out some solution to this problem. And after a few months of pondering, I decided that my next exam would be based on a maximum score of 137. And on this exam they didn’t do quite as well percentage wise, but the average score was well into the 90s and they were thrilled. And this is behavior that no economist would think is remotely sensible.
TANYA OTT: We talk about the early roots of nudges and recreate some of Thaler’s research. You’ll find it in the archive at deloitte.com/insights.
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