Weight Loss Not an Easy Figure to Price
By: 
If you think it's hard losing those last ten pounds by yourself, imagine being a manager and trying to get a whole group of employees in shape.
That's the conundrum facing employers today as they struggle with rising rates of obesity and spiraling health care costs. (A study by Gallup found that absenteeism due to obesity and other chronic health problems costs employers $153 billion per year.)
And with a provision in the Affordable Care Act letting companies use a greater share of their insurance payments on incentive programs, more and are more are dangling money in front of employees to induce them to shape up.
That's all well and good — but making those incentives effective is not so simple. For example, CVS Caremark recently joined the parade of companies tying financial incentives to wellness, telling employees that they need to undergo a "wellness review" or pay an annual penalty of $600. The public reaction was swift — and negative.
"People are going in and just offering theses blanket cash incentives, but they're not really taking a step back and figuring out how to do them in an optimal way," says David Roddenberry, a co-founder of HealthyWage, a company that manages incentive-based weight loss programs for employers.
Roddenberry says CVS is clearly trying to encourage workers to become aware of their health status so they will take steps to improve it, and adds that he has no way to know what impact the program is having. But he warns that while cash incentives work, "you have to be really rigorous about what type of program you're rolling out."
(Read more: CNBC: Getting Corporate Wellness Programs Off the Couch)
A new study published in the Annals of Internal Medicine offers some pointers. The researchers tried offering a group of individuals five monthly cash payments of $100 each if they met their weight-loss goals each month.
Then they offered groups of five people - none of whom knew the identities of their fellow members — group monthly incentives of $500. Only the people who met their goal would receive a prize, so if only two people succeeded, each would receive $250.
The difference was clear. After six months, people receiving the group incentives lost an average of 4.6 kilograms, versus 1.7 for the individual prizes. The individual prizes were cheaper, kilo for kilo, but less effective.
Clearly the type of financial incentive you are offered will affect how hard you work at weight loss. But other research suggests there is another, cheaper way to slim down: with friends who don't let friends stay overweight. Nicholas Christakis, a professor of health care policy, sociology, and medicine at Harvard, has looked at the effect of social networks on health-related conditions like obesity.
He found that "If your friends are obese, your risk of obesity is 45 percent higher," he said in a TED talk. "If your friends' friends are obese, your risk of obesity is 25 percent higher."
The patterns also hold for weight gain, according to Christakis. "If your friend becomes obese, it increases your risk of obesity by about 57 percent in the same given time period." He has found that weight loss —- and quitting smoking — also tends to spread the same way.
The bottom line: at least when it comes to losing weight, money can't buy everything.
