So Irrational, It Just Might Work

At Governing's Managing Performance conference last week, Delaware Budget Director J.J. Davis touted a policy being tested in her state as the answer to runaway health care costs. Her solution is to pay people to stay healthy.

nurse-and-patient.jpg As Davis described it, a pilot program offers citizens free medical exams, nutritional counseling and regular reminders to exercise. Then, a year later, if the recipient has become healthier they are given $150.

The idea that $150 would convince someone to be more mindful of his or her health is, of course, completely absurd. If the thought of dying young isn't enough to convince you to stay fit, it doesn't make sense that a relative pittance would make much difference either.

Luckily, Delaware residents, like many of us, don't act so rationally. Although the final results aren't in yet, Davis said that anecdotal evidence is showing positive results. Participants who were given $150 were much more likely to improve their health then those who weren't. Apparently, the money was a key factor.

One lesson from Katrina is that governments get into trouble when they assume people to be rational actors. It might make sense to evacuate in the face of a Category 4 hurricane, but officials need to plan for the fact that some people won't, even if they have transportation available. The genius of Delaware's program is that it not only recognizes irrational behavior among its participants, but harnesses it to improve their health.