Do we have it backwards? Should we invest in health to get productivity? Or reward productivity to get better health? Entry 8 – 2009


An interesting study completed last year should make us all reconsider our typical assumptions about how to improve community health. In short, the study found that communities that experienced a significant influx of jobs and economic opportunity not only had expected improvements in their standard of living, but also increased their practice of healthy behaviors, had improved physical and mental health, less chronic illness, lower reported disability, and felt better.

This unique, natural experiment compared tribal populations before and after they opened casinos, to similar tribes who did not have economic development from casinos (1). Those not opening casinos certainly received attention and programs emphasizing tobacco cessation, eating right, taking care of one’s self, and dealing with mental health. But significantly greater health improvement happened when economics improved.(2)

This conclusion is the reciprocal dimension of what we often hear: “We need to improve health, so people can do better at work.” Instead, the lesson here was: “When people have an opportunity and a reason to succeed in work, they take better care of their health.”

Perhaps these results are not surprising, but they have significant ramifications on health spending today. Not everyone is ready for findings like these, but they play out in our research time and again. People who have a reason to be at work, and who are well-rewarded for their work—on average—take better care of their health than those who do not:

  • Workers eligible for larger bonuses report that health is more important to their careers.
  • Workers eligible for bonuses and overtime are twice as likely to get a flu shot than those not eligible.
  • Larger bonuses are correlated with less smoking or lower BMI, independent of salary.

Why is it so hard to change our understanding about what drives health? Because it might change the way we make our living.

When I was challenged five years ago to think differently about health, it took me a while to let go of my old paradigm. It was uncomfortable to question a deeply-held set of assumptions about health and health behavior. But the evidence grew too compelling for me to ignore. Although I worried that this new approach would threaten my relationships with mentors and colleagues I’d worked with for decades, eventually the fear was outweighed by the discomfort of knowing I was perpetuating a flawed approach.

I could no longer support ever-expanding budgets for services that correct health misbehavior when that same money was being taken away from individual salaries and performance rewards that also positively influence health.

The old (one-direction) paradigm: invest in fixing workers’ health problems, and they will do better at work.
When I used to operate in ‘health management” or “health and productivity” circles, the primary research goal was to demonstrate how illness and health limitations reduced work output. Most research during that part of my career was supported by businesses hoping to prove that A) employee illness creates a business expense (medical, absence, turnover, and eventually, presenteeism) and B) that spending more on interventions (such as medicines or disease management) will reduce that business expense.

In general, advocates of a medically-oriented, disease-threatens-productivity approach are hoping to get more funding for interventions that will extend life, prevent illness, reduce suffering, increase vitality, and perhaps make a living while doing it. All are reasonable purposes.

And so, all kinds of resources in the form of time, money and effort, have been directed toward getting people to make changes that improve health. Or, if people won’t change, we work on helping them get closer to considering a change—hoping they become more ready. Time and time again, we see companies frustrated because “employees won’t do what they should do.” And recently this has started to provoke even more heavy-handed approaches to making people comply.

But where do hope, responsibility, opportunity and self-sufficiency fit into this get-healthier-and-cost-less-so-you-can-be-more-productive equation? In the case of some Native American tribes, where social problems and unemployment prevail, is there a chance that government attempts to encourage people to stop smoking, improve eating habits and manage depression seem disingenuous?

Is it different in the case of corporate America? Do people work in an environment that makes health intervention programs seem similarly contradictory? In a job where people feel under-valued, high performers receive no additional rewards, opportunities for advancement are limited, job training is scarce, and retirement seems farther away than ever, can health improvement programs be expected to outweigh broken systems and lack of motivation? If I don’t believe that company leaders really care about my life success, why would I believe their interest in my health is sincere?

The new paradigm: reward high performance and invest in human capital, and people will have more reasons to protect their health.
In what we call the health as human capital paradigm, the equation gets reversed. The right incentives create an environment encouraging health protection. First: reward performance, invest in skills, and give people hope and opportunity to succeed. Second: share responsibility for health (e.g., savings accounts, paid-time-off banks). Then, get out of their way as employees protect their health as an asset they naturally value more. Health improvement programs cannot substitute for aligned incentives, and will struggle to be effective among misaligned incentives.

Remember, health improvement efforts divert money from workers’ wages to fund the very services that will try and make them change. So, if workers share none of the direct value for improved behaviors, then the company is sharing cost without sharing any benefit. Instead of asking employees to pay for behavior-change programs, imagine a work setting that makes success rewarding and fulfilling. Imagine growth opportunities that improve life-long self-reliance. Make work excellence something from which workers can tangibly gain. Put success in their hands, and put enough risk in their hands that failure matters too. Allow personal responsibility at work and in schedules. Then, give people the flexibility to care for themselves in the way they need to.

The casino study showed that as people saw opportunity, they changed their health habits. When we have something that matters to us, success we can strive for, a reason to get up in the morning, we have more of a reason to care. Maybe the best health promotion tool in that setting was hope for a brighter future.

Why this matters: Health is just one of three human capital assets: skills, motivation and health. They are connected and affect each other. Having opportunity to use one’s human capital to earn rewards gives us greater reason to improve and protect those assets. The standard medical paradigm has excluded the influence of skills and motivation, insisting that health alone will lead to better work performance. In a tough economic time where funds are limited, spending “smarter” is preferable to spending more. The health as human capital paradigm demonstrates that investing in people’s overall wellbeing is the most powerful step to improving health, and that giving people control over their human capital assets isn’t just in their own best interest, but in the interest of employers as well.

1. Wolfe B, Jakubowski J, Haveman R, Goble H, Courey M. Casino revenue and American Indian health: the link between tribal gaming and the health status and behaviors of American Indians. Paper prepared for the 30th General Conference of The International Association for Research in Income and Wealth: Portoroz, Slovenia, August 24-30, 2008. Accessed April 10, 2009. Cited with permission of the author.

(2) Economists call this the “income effect,” where demand for certain things increases as income increases. These are called “superior goods,” and health factors fall within this category.


One Response to Do we have it backwards? Should we invest in health to get productivity? Or reward productivity to get better health? Entry 8 – 2009

  1. >I couldn’t agree more with Dr. Lynch’s causal pathway. In all my consulting work over 20+ years, no health promotion program in the world works in a toxic corporate environment. When you work on fixing the environment as she suggests, then suddenly (yes, within a year) all the productivity measures improve.

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