Trust, but Verify

One of the barriers to offering more frequent, smaller rewards in the smoking study was the cost of verifying that smokers were nicotine free, Volpp said. "We felt that we couldn't design a smoking study where we could do frequent tests." Studies better suited to frequent tests provided evidence that small recurring rewards keep people motivated.

One example is the weight loss study of 57 dieters at the Philadelphia Veterans Affairs Medical Center, which created two types of incentive plans built on small, frequent rewards. The 16-week study divided participants into three groups: one enrolled in a "deposit contract," another in a lottery, and a third in a weight loss program with no financial rewards.

Participants in the deposit contract were able to contribute between $.01 and $3 each day into an account. In addition to matching the deposit, researchers would add $3 for each day participants called in and reported a weight at or below their goal. Participants would receive a text message daily, telling them how much money they had accumulated. The catch: They would only receive the accumulated amount at the end of each month only if they reached their weight loss goal. So depending upon how much they invested and how much weight they lost, participants in the deposit contract group could accumulate as much as $252 per month, or lose up to $93.

The second incentive group got to play a daily lottery that offered a one in 100 chance of a $100 reward, or a one in five chance of a $10 reward. (Each patient was assigned a two-digit number, such as 27. Every day, the lottery would generate a random number. Participants would win $10 if the first or last digits of their number matched; if both digits matched, the participant would win $100.) Participants would only be eligible to win if they had met their weight loss goal for the day and had called in to report it before the lottery took place. Like the deposit group, participants were given daily text messages that told them how much they had accumulated and would only receive the payoff at the end of the month if they met their weight loss goal.

In addition to small, immediate rewards and the anticipation of a larger payoff, the study also tried to maximize the "threat of regret" as a motivating force. In both incentive groups, participants who failed to lose weight were given daily text messages reminding them how much they could have earned had they met their target. For those in the deposit contract group, forfeited money went to a pool that was distributed equally among successful participants who lost more than 20 pounds after 16 weeks. To top it off, participants in both incentive groups who lost more than 20 pounds by the end of the four-month study got a final bonus of $50.

Both incentive groups outperformed the control group. After 16 weeks, the deposit contract group lost a mean of 14 pounds, the lottery group a mean of 13.1 pounds and the control group a mean of 3.9 pounds. About half of the participants in the incentive groups met the 16-pound weight loss goal by the end of the study, while only 10.5% in the control group did.

A follow-up seven months later, however, showed that participants in all three groups gained much of the weight back, although the incentive groups remained at a lower weight than when they began the study, while the control group did not. "Substantial amounts of weight were regained between the end of the weight loss phase and the follow-up," Volpp wrote in a paper about the study. "Further testing of longer-term use of these incentives is needed to determine whether longer use would lead to sustained weight loss."

Volpp said he is excited about a follow up weight loss study that puts specially equipped scales directly in the workplace, allowing study participants to log verifiable weights daily instead of once a month. The scale will recognize the employee's ID and will take a photo each time the participant weighs in. "So we can run a daily incentive program with verifiable results, rather than using self-reported weight loss during the month and relying on in-person weights only at the end of the month," Volpp said.