Business

04.10.13

Workers Earn Money on the Job for Losing Weight

Wages may not be rising much. But an increasing number of workers are finding they can make more money at work by losing weight.

If you’ve tried all-cabbage soup diets and juice cleanses and still can’t slim down, consider the new diet craze sweeping the nation: cash for weight loss. 

Group workouts for money are set to replace Atkins and South Beach as the most motivating weight-loss regime.

Companies and insurance companies have been experimenting with offering monetary carrots to encourage employees to eat more carrots. The Affordable Care Act—a.k.a. Obamacare—offers more financial incentives for employees trying to get healthy by losing weight or quitting smoking. And a recent study found that employees who joined group weight-loss programs at work for communal cash benefits lost more weight than individuals trying to lose weight for money.

The study, conducted by researchers at the University of Michigan, looked at two groups of employees trying to lose weight at the Children’s Hospital of Philadelphia. Members of one group was offered $100 each for every month its members lost weight, while the other group had to split $500 for every month, meaning that some members of the group could win more than others. The second group did far better than the first in exceeding their weight-loss goals.

So third-party companies like HealthyWage are cropping up to help groups win cash for weight loss. HealthyWage, founded in 2009 by former financier David Roddenberry, has branded itself with the motto “wellness is valuable.”

And being in the weight-loss-for-cash business is valuable, too—HealthyWage has more than 500 corporate clients, including 7-11 and Office Depot, as well as entire school districts in Houston and Dallas. “In five to 10 years, this is going to be a huge industry,” Roddenberry says.

HealthyWage offers three types of weight-loss groups—all with a cash prize for meeting or exceeding goals.

The 10% Challenge allows people to bet on themselves. After paying a $150 fee, individuals can make $300 after six months if they drop 10 percent of their body fat. Obese people can make up to $1,000 to drop to a normal Body Mass Index (BMI) within a year. And HealthyWage’s most successful program, the Matchup, pits teams of five against each other for a grand prize of $10,000 to the group that loses the most weight.

Roddenberry says the heaviest people in offices are the most valuable for Matchup teams because they have the most weight-loss, and therefore monetary, potential. “It’s the opposite of gym class in high school,” he says. “Everyone wants them on their team.”

Roddenberry says the heaviest people in offices are the most valuable for Matchup teams because they have the most weight-loss, and therefore monetary, potential. “It’s the opposite of gym class in high school,” he says. “Everyone wants them on their team.”

Roddenberry says his client base expanded quickly after the Affordable Care Act was validated by the Supreme Court last year. Companies are increasingly trying to manage their health-care costs by rewarding healthy employees—and sometimes by punishing overweight employees or smokers with higher premiums.

Jon Whicker, who works in mortgage servicing in Salt Lake City, says he weighed 400 pounds when he started competing in a HealthyWage group with his family. He lost 80 pounds and his group won the $100,000 grand prize after his group lost a combined 225 pounds. He used his $2,000 share to spruce up a 1968 Mustang.

Whicker tried out for The Biggest Loser before trying HealthyWage. But after failing to make the cut at the reality-TV show, he felt unmotivated to lose weight. “Money was the carrot I needed,” Whicker says. He has lost more than 150 pounds since starting the program.

And cash for weight loss isn’t the only financial incentive for health-making headlines. A recent study published in The European Journal of Health Economics found that gay men in Mexico City would pledge to take regular HIV tests and attend regular safe-sex talks to stay HIV free for an average of $288 a year. Male prostitutes in Mexico City said they would do the same for $156 a year.

Paying gay men to practice safe sex could save Mexico’s public-health system serious money: the government spends $7,000 per year on drug treatments for each HIV-infected person.

But while cash incentives for getting healthy are effective, some professionals still say the premise is absurd. “It’s like rewarding a kid with a Tootsie pop for cleaning up their room,” says Dr. Josh Bloom of the American Council on Science and Health.

“I’m not going to tell you it doesn’t work, because it probably works,” he says. “But if somebody can lose weight for a stinking $100 they can lose weight without the stinking $100. Is human life really that cheap?”

As behavioral economists have been telling us for years, people aren’t always rational when it comes to making choices. Sometimes a little extra cash can provide the nudge to encourage people to do what they should be doing for the sake of self-preservation.

Correction: The original version of this article incorrectly stated the amount of the grand prize of HealthyWage's Matchup program. It is $10,000, not $100,000.