Insights (Essays)

Insights (Essays) January 2010

Commitment Vows: Accountability 2.0

Neil Seeman

 

So you want to lose weight? Spend more time with your kids? Or balance your hospital's finances? It is two weeks since the turn of the New Year, just about the time when most Resolutions fizzle. How do we sustain the commitment to do what Rational Self wants to do before Irrational Self takes over? Try a commitment contract online. It costs no legal fees and can be highly effective.
 
Commitment contracts have worked for individuals around the world whose aim is to lose weight, spend more time with their family, or quit drinking - but I think it can also work for hospitals, governments and CEOs who want to stamp out bad habits. Call it Accountability 2.0.

 

StickK.com is the most famous example of what I mean. Started by Dean Karlan and Ian Ayres of Yale, it is a Web Site that motivates people to make changes in their lives by gambling on their reputation. Almost 80 percent of users achieve their goals, as compared to 35 percent who put no money down. If they fail to achieve their self-declared goals, they're out of pocket and it's not hidden from public view. Others find out about it. In February 2009, the site had more than 23,000 users, the highest percentage of whom (42 percent) had contracted to lose weight.

The Commitment Contract concept is based on two unbending principles of human behaviour:

1. People don't always do what they want to do
2. Incentives work if tailored to individual desires

The site takes credit card information up front and charges the user's card weekly if he fails to meet his personal goal. StickK.com users set up whatever goals they like, and have the option of putting up as much money as they want. They designate a 'referee' (a friend, co-worker or spouse) who receives regular progress e-mails.

Forfeited money from unfulfilled promises goes to a charity or, depending on the user's preference, an 'anti-charity' - one the user doesn't support. This is a great incentive for goal completion. A person who feels strongly that abortion is wrong, for instance, can designate a pro-choice foundation as the recipient if he fails to meet his personal goal. These checks and balances mean that most users end up fulfilling their contracts (according to self-report; the actual success ratio is likely lower). Commitment contracts allow individuals to regulate the way they want to behave.

In the Philippines, a similar model has found success with smokers who wished to quit: after putting money into a zero-interest account, they got their money back six months later but only if they passed a test showing they had stayed nicotine-free for six months. If they failed, a charity got the cash. A colleague, Jen McCabe, started an exercise commitment contract model atgetupandmove.me. "Issue a challenge, barter with exercise!" Video-enabled smart phones can provide the evidence of you actually doing the push-ups to which you committed.

Accountability 2.0 for Healthcare Organizations

Many healthcare organizations, such as MD Anderson, have been early adopters of real-time accountability by using free tools like Twitter. Merely having an organizational presence on Twitter provides no-cost, real-time accountability measures - such as the organization's fluctuating "trust grade," or the number of "retweets" and dynamic Web links (akin to real-time scholarly citations) of information posted by the organization on Twitter.

Commitment contracts for healthcare organizations or governments could take accountability for results to the next level. Any company, government or healthcare organization today - even in a public payor model - is under fierce competition for resources, personnel and prestige. Yet up until now, ranking tools have been set up mainly by outside parties such as think tanks or media outlets.  

Prominent rankings in Canada include the Fraser Institute's rankings of hospitals and schools; the Conference Board'sranking of healthcare systems; and Maclean's rankings of universities. Online comparison tools include ratemds.comand ratemyprofessors.com. Most third-party evaluation tools around the world, from US News & World Report'scollege rankings to the Wall Street Journal's annual ranking of finance analysts, have been subject to occasional resistance and criticism.

Commitment contracts online offer a new approach. Those being evaluated set the terms of the contract.

Under a commitment contract, an organization, say, McDonald's, might pledge to serve a greater proportion of its lower-calorie offerings to clients. (Yes, there arelimited options). If McDonald's loses, a percentage of its profits could go to Burger King. Competing companies set the terms of the wager. Each organization has a profound interest in winning: more clients, more money, and a better image.

Hospitals could do the same with mutually-agreed measures that matter to them. These might include goals for fundraising drives, diversity hiring targets, or patient satisfaction scores. To soften the impact of competition, the 'losing' party could commit itself in advance to assisting with a fundraising event on behalf of the winning party. My contracts law professor taught me that true contracts are always win-win. Under Accountability 2.0, the customer comes out on top.

About the Author(s)

Neil Seeman is director of the Health Strategy Innovation Cell.

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