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Years ago, when Megan Piper was in college, she went to Colorado with her family to visit her grandparents.

Megan PIPER: My grandfather, whenever we would go to visit, he’d spend a lot of time looking at the tomatoes checking on the tomatoes, being out back in the garage. And I just figured he was tinkering or doing whatever he was doing.

But on this visit, Megan remembers standing in the kitchen and seeing her grandfather outside, through the window.

PIPER: I just happened to be watching him. Again, He was out with the tomato plants. And I I looked and I thought, ‘I think that’s a cigarette in his hand.’ And he had it way down by his side, and that’s when it all clicked. What he was doing out there was smoking. And I had no idea. I was 21 and I finally realized that my grandfather had been a smoker for my entire life. And in fact, he’d been a smoker since he had been in the army in World War II. They used to get free cigarettes.

Megan says smoking was a source of shame for her grandfather.

PIPER: This is an example of someone who is well-educated, strong religious beliefs, and yet was dealing with an addiction that he just couldn’t handle on his own. He struggled his whole life with this, struggled his whole life with the guilt around the fact that he was using tobacco. And that has really helped me think about people who smoke, people who vape, people who use chewing tobacco, as folks who are really struggling with something that the vast majority of them want to change, and they’re just not sure how to do it.

Of course, there are a lot of ways to quit smoking and lots of ways to just be healthier, in general. None of them are easy to do, some work better than others, and most of them typically share one feature: they cost you money. But what if the money flowed the other way? What if we paid people to be healthier?

From the Freakonomics Radio Network, this is Freakonomics, M.D. I’m Bapu Jena. I’m a medical doctor but I’m also an economist. Each episode, I dissect an interesting question at the sweet spot between health and economics. Today: Some of the biggest causes of death in the U.S. — heart disease, cancer, and lung disease — are often related to unhealthy choices we make: whether to smoke, what to eat, how much to exercise. So, in this episode, we talk to researchers who’ve paid people to try to change those very behaviors — essentially giving them money to be healthier. And we ask: does it work?

We humans do a lot of things that are bad for us. We eat too much salt, sugar, fat. We sit around too much. We don’t exercise enough. And some people smoke. Pretty much everyone knows smoking isn’t good for your health, but even today, it causes an enormous number of preventable deaths every year. About one in every five deaths in the U.S. is attributed to smoking, nearly half a million every year. The chemicals contained in cigarette smoke don’t just cause lung cancer. They cause other kinds of cancer, too, along with heart disease, lung disease, and diabetes. Those problems are estimated to cost more than 380 billion dollars every year, both in health care costs and lost productivity. But here’s the thing: Most smokers say they want to quit. It’s just that quitting, as we know, is incredibly difficult.

PIPER: The idea that it’s just a personal choice it’s not a helpful approach to dealing with the 34 million smokers that we have in this country.

Megan Piper, who you heard at the top of the episode, is now Professor Megan Piper. She’s a clinical psychologist at the University of Wisconsin.

PIPER: I’m also the associate director of research at the University of Wisconsin Center for Tobacco Research and Intervention.

Megan says she’s heard people say that quitting smoking is harder than quitting heroin. You probably already know that tobacco is addictive because of a chemical called nicotine. But the power of the nicotine in cigarettes is amplified by how often you inhale a puff of smoke.

PIPER: It causes a release of chemicals in the brain, specifically this chemical called dopamine, which helps you feel good, right? It gives you the buzz or gives you the high that you get from smoking. Because it releases so much dopamine in the brain, the brain starts to change.

Those changes in the brain cause cravings that are hard to ignore, and they lead to powerful withdrawal symptoms when people try to stop. They feel irritable, angry, or sad. They can’t concentrate.

PIPER: What happens to most people is that they know it’s bad. They know it’s expensive, they want to be able to quit and they just can’t do it.

So, given how costly smoking is in the United States, and given how hard it is for people to stop once they start, what can we do to give people a better shot at quitting? There are a lot of things that can work but it turns out one answer is to simply pay smokers to get treatment that could help them quit.

PIPER: It’s something called Thorndike’s law of effect. If you have a positive reinforcement for behavior, you’re going to keep doing that behavior. And so, if we pay people to quit smoking, they’re more likely to be able to continue quitting smoking.

Several years ago, Megan and her team at the University of Wisconsin started working on a study of Medicaid recipients. They recruited 1,900 smokers from doctor’s offices and callers to the Wisconsin Tobacco Quit Line, which provides coaching and support over a series of calls. They wanted to know if paying smokers to use the quit line up to five times might help them break the habit. Smokers were randomly assigned to either a control group or an incentive group. The incentive group got paid 30 dollars per call with the quit line, plus 40 dollars after six months, if they stayed smoke free. The researchers verified whether people had smoked with a carbon monoxide breath test or a urine test. During the calls, participants were not only coached, but also encouraged to use medications to help them stop smoking.

And the results were clear — smokers who got paid were more likely to take medications, they were more likely to make it through all five quit line phone calls, and after six months, nearly 22 percent of people were still smoke free, compared to about 14 percent in the control group. So, the majority of people in both the incentive and control groups couldn’t quit, but people who were paid to quit were a bit more likely to quit.

PIPER: Paying people to take calls from our quit line that was the driving factor that helped people quit. So, getting folks to stay in treatment, to continue working with someone on changing their life patterns, developing new coping skills, battling cravings, using their nicotine replacement products all of these were things that were helpful in helping people quit smoking.

Megan was then interested in finding out if the intervention would also be effective among one especially high-risk group of smokers: pregnant women. Not only do mothers suffer the consequences of smoking, but so do their kids — both before and after they’re born. Smoking is associated with low birth weight and higher risks of sudden infant death syndrome and asthma.

PIPER: Smoking during pregnancy has also been associated with behavioral issues and attention deficit in children whose mothers smoked while they were pregnant with them.

So, Megan and her team ran another study of Medicaid recipients, this time with more than 1,000 pregnant smokers. Half of the women were paid each time they saw someone for a pre- or post-birth visit, for each smoking cessation phone call that they took, and for testing negative for smoking after they gave birth.

PIPER: That’s a real key transition time where it’s stressful, it’s really hard to be home with a newborn. And we wanted to help women have an additional motivating factor to keep them engaged in treatment and also to keep them smoke-free.

And once again, paying people had a notable effect on quitting smoking. The women who were paid for each visit were more than one and half times more likely to be smoke free six months after giving birth. The results were published last year in the journal Preventive Medicine.

Megan’s findings aren’t unique. A systematic review looked at a number of studies in which smokers were given financial incentives to quit smoking. Most studies seem to suggest that people who get paid to take quit line calls or show up for counseling sessions — those people are much more likely to quit. Paying them provides a financial incentive on top of all the other interventions that already exist.

The review also suggested that while most people who get paid to quit smoking do relapse, for those who don’t, the positive effects can last well after they stop getting payments. Some studies have followed participants six, 12 or even 24 months after their last payment, and smokers who got paid were still much more likely to have stayed away from cigarettes.

It’s important to point out again that most people in Megan’s studies and others like them still didn’t quit smoking. As I mentioned, less than 15 percent of the incentive group in Megan’s study of pregnant women managed to stay smoke free after six months. So, paying people to quit smoking seemed to work somewhat but it wasn’t a panacea, at least not at the amounts of money that were studied. And that makes economic sense.

Think about it this way. The two main reasons to quit smoking are for your health and because it could save you money. Quitting smoking is itself a good financial decision. Every pack of cigarettes costs money, and a pack a day can mean a smoker spends thousands of dollars a year.

But the much bigger effect of smoking is on your health. Smoking can reduce your life by at least a decade and each cigarette is a step toward that outcome. A few episodes ago, I talked about how economists value changes in life expectancy and more generally, what a year of life is worth. It’s a morbid idea and leave it up to economists to have come up with this concept, but it’s incredibly important for policy. Policymakers use these estimates to weigh the costs and benefits of laws and regulations that affect our health.

Most estimates place the value of a year of life between $100 thousand and $200 thousand dollars, roughly, which means that the price that smokers pay for smoking — in terms of years of life lost — is easily on the order of a million dollars or more. That cost is enormous and it speaks to the very definition of addiction — continuing to engage in a behavior despite any negative consequences. But that cost also explains why paying people several hundred dollars or even a thousand dollars to quit smoking doesn’t work for most people. It may just not be enough money. Paying them tens of thousands of dollars to quit would cost much less than the financial toll smoking takes and might move the needle even more, but we haven’t studied incentives of that magnitude.

It’s clear, then, that one thing that addiction does is it counteracts people’s own valuation of their lives. They know they should quit so they don’t die prematurely, but they usually can’t. And while it may seem strange that adding just a few hundred dollars into the equation could help some people quit, we know from behavioral economics that immediate rewards — that gratification of getting paid to stay in treatment — can be powerful and may help overcome an addiction to cigarettes, at least for some people.

PIPER: We talk about something called urge surfing or surfing your cravings. Because they get really horrible, and people are just they feel absolutely terrible. It’s all they can think about. They so desperately want a cigarette. But whether they smoke or not, those cravings go away. And that idea of, well, boy, do I really want to throw away $25? Do I really want to throw away $40? That sometimes is enough to help people get past that big craving.

Smoking is obviously just one big killer in the U.S. But the country is also plagued by other preventable causes of death. So, can the lessons learned from paying smokers to quit be applied to other costly unhealthy behaviors? Can financial incentives help people lose weight, or exercise more — or even get a really important vaccine?

That’s coming up after the break.

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We just learned that paying people to quit smoking can help some people to quit, even with relatively modest amounts of money. But what if we pay people to exercise more or lose weight – or get a vaccine? To help answer those questions, I turned to a fellow physician economist, Kevin Volpp.

VOLPP: The research I do relates to trying to help people live healthier lives, using various insights from behavioral economics.

Kevin is a professor at the University of Pennsylvania and heads the school’s Center for Health Incentives and Behavioral Economics. If he sounds a little muffled, it’s because he’s wearing a mask.

Kevin’s led a number of studies examining incentives to get people to make healthier choices. And he’s done his own studies on smoking too. In one of them, people who were paid to quit smoking were more than two and a half times more likely to stay off cigarettes for at least a year.

But Kevin says, unfortunately, the results aren’t as clear when you look at other health behaviors. He says there’s some evidence to show that paying people to exercise may lead to lasting results, which we’ll get back to, but with weight loss, it’s another story.

VOLPP: We’ve done a number of studies on weight loss, where we found that incentives are effective at helping people achieve initial weight loss, but that after you stop paying the incentives, people tend to regain the weight. And on the one hand, that’s disappointing on the other hand, it’s not surprising.

That’s different from something like smoking, where once you get past the initial withdrawal, it can be easier — but still pretty hard — to stop for good. But with weight loss, it’s not like people can just stop eating altogether.

VOLPP: In terms of weight loss, it’s much more challenging, because high calorie, tasty food is very easy to come by and you can have it pretty much anywhere. In addition, our bodies tend to adapt to our weight and when we lose weight, bodies often actually slow down their metabolism so that we will regain the weight.. And it’s it’s a biological phenomenon, which has proven to be pretty robust and makes it much more difficult to lose weight once you become obese.

So, with smoking, paying people may work. For weight loss, not really. What about the thing that’s constantly on our minds and in the news these days — vaccines? Kevin says research done on flu vaccines shows that paying people can help. And with Covid-19 vaccines, some states and employers tried to entice people with money. Ohio, for instance, created a lottery with large cash prizes. The soap company Dr. Bronner’s offered employees $1,000 to get the vaccine.

But Kevin says that when it comes to the Covid-19 vaccine, studies of financial incentives suggest that they mostly haven’t helped. Part of the reason for that is that people who wanted to get vaccinated — they just did it. But by the time this research was done, many of the people left were people who DIDN’T want the vaccine.

VOLPP: This was a whole other ball game with the Covid vaccine. There’s on top of that, a whole layer of beliefs about not wanting to get vaccinated, some cases thinking this was a government conspiracy, and that none of this was based on science. And so, then having the government then offer money to get vaccinated in some sense could even feed that narrative, as opposed to offsetting those concerns.

So, to recap: financial incentives may work for smoking but may not work well for weight loss or Covid-19 vaccinations. But, what about exercise? It turns out there are ways to increase exercise — with and without money.

Mitesh Patel is a doctor and researcher with Ascension, which runs hospitals in several states. It’s his job to find ways to apply behavioral science in Ascension’s hospitals. But in his previous work at the University of Pennsylvania, Mitesh and a team of researchers found that how you explain financial incentives to people can matter a lot for whether those incentives change behavior. One of the insights he gained from his research was that paying people worked even better if you employ a concept called ‘loss aversion.’

PATEL: People are more motivated to engage in activity if they’re going to avoid losing something they feel is theirs.

Loss aversion comes up a lot in behavioral economics. It refers to the idea that people value what they have already more than something equivalent that they gain. So, if someone loses ten dollars — that experience is more powerful, they feel it more — than they would if someone gave them ten dollars.

So, Mitesh and his team wanted to apply that concept of loss aversion to design financial incentives to increase physical activity. They did an experiment in which for a month, they gave a group of people one dollar and 40 cents per day to meet a fitness goal. Pretty standard. The other group, though, was the loss aversion group.

PATEL: In the other group, we said, we’ll put $42 upfront in a virtual account. And you can lose a dollar and 40 cents each time you don’t meet 7,000 steps. So, by the end of the month, we would pay everybody whatever was in their account. So, it really didn’t matter whether you were in the gain-framed arm, where you got a dollar and 40 cents, or you were in the loss-framed arm where you lost a dollar and 40 cents. If you met your step goal 10 days, you would get $14 by the end of the month. But it had a huge impact in terms of how people behaved.

The people who felt like they were losing money when they failed to meet a goal — they exercised way more often. But one of the problems with these interventions is that they’re difficult to scale. Paying everyone to exercise could cost a lot of money, even though it might motivate some people to move more. So, Mitesh and his team wanted to know if they could get similar results without money. It turns out, they could, by combining a few different strategies.

One was something called gamification. Take away the money, and instead, use things like points and levels to motivate participants. Another strategy combined gamification with loss aversion. People didn’t just earn points — they were first given points that they could lose.

PATEL: So, we would give people 70 points upfront each week, 10 points for each day of the week, and they would keep those points, unless they didn’t do whatever behavior they were striving for. In that case, we would then take 10 points away. We also put them in different levels. We started people in the middle level, so that they automatically had some status when they started. And if they didn’t do well the first week, then they were dropped down a level, let’s say, going from silver to bronze. And they would feel that loss of status. And that would hopefully kick them in gear in the beginning of the intervention.

And on top of that, instead of using financial incentives, Mitesh and his team used social incentives. They had people work together, or against each other, to see if that got people moving.

PATEL: In some studies, we had families enter these programs together and we randomly picked someone from the family and the whole family would get a text message saying that this person didn’t meet their goal and the whole family would lose 10 points. You can imagine what would happen if that was you and you came home to your family, they’d probably make you go out on a walk. And so, losing points and this accountability in your family was really motivating. In fact, what we found is that for physical activity and trying to get people to exercise more, this worked just as well as paying people, except we weren’t paying people at all. We were giving them these virtual points and moving them through levels. And what was even more impressive is when we turned these programs off — we said, ‘Okay, the game’s done. And we want you to keep using your wearable device to, to walk a certain number of steps.’ People kept up the habit. In the financial incentive studies. A lot of times we find that that behavior goes away, but we found here that this was sustained as far as up to a year after we turned this off.

It’s possible you’ve seen these types of interventions to improve physical activity. Insurance companies and employers are using gamification and offering incentives for people to exercise, often in the form of discounts on their health insurance premiums. But talking with Kevin Volpp and Megan Piper, it seems like one of the most effective tools we have for helping people quit smoking – paying them to stop – isn’t being used as much in the real world. And that’s really important.

Part of the reason could be that there’s moral opposition to the idea of paying people for something they should be doing anyway. Non-smokers, or people who quit on their own, may say, ‘well I’m not smoking – why am I not getting paid?’ But Megan says using financial incentives wouldn’t just help smokers, it would help everyone. I already mentioned that smoking costs billions of dollars and hundreds of thousands of lives every year. Paying people to quit may cost more initially, but because it increases the chances they’ll quit, it may actually be cost effective. You spend less per person who quits, and insurers don’t have to shell out as much money for all the health problems that smoking causes. And that could keep everyone’s costs down.

PIPER: So, it becomes sort of a pragmatic decision. If I can set aside my beliefs about who this person is and just get real pragmatic about the money, investing in helping people quit smoking is going to save everybody thousands of dollars. There are so many reasons people have to quit smoking. What they need is help in being successful. And I feel like that’s where we could keep investing more money. If this small incentive, two to three hundred dollars, can actually help people engage in quit smoking treatment and be successful, that’s a solution that really is a win for everybody.

The other major issue to keep in mind is that quitting smoking is a matter of health equity. Megan says that smoking, in a way, is a public health success story. Almost half of the adults in the U.S. used to smoke — now it’s about 14 percent. But you might have noticed that the smoking cessation studies I mentioned earlier — they targeted people on Medicaid, the government’s insurance program for the poor. That’s because people on Medicaid are much more likely to smoke than the general population.

PIPER: it’s no longer everybody using across the board. It’s really gotten concentrated in certain populations. So, people who are Native American tend to smoke at much higher rates. People in the LGBTQ plus community tend to smoke at much higher rates. People with lower levels of education, lower socioeconomic status tend to smoke at higher rates. And finally, people with psychiatric comorbidities, folks that are dealing with schizophrenia there are estimates of 80 percent to 90 percent of people with such diagnoses are also smoking. And so, it’s become, rather than something everybody sort of did to be cool and trendy in the day, it has now really concentrated itself in particular populations, and in many respects, particular disadvantaged populations.

Tobacco companies actually target poorer communities, and they spend billions of dollars a year to promote their products. And the effects of tobacco – the problems that come up later in life, like heart disease and cancer – those issues play out differently depending on your background.

PIPER: For example, we know that African American smokers actually smoke on average, fewer cigarettes per day. They start smoking later in life, but they are significantly more likely to die from smoking related disease than their white counterparts. Given that helping people quit smoking becomes an issue of racial equity in health. If we want to really help African American people who smoke, helping them quit was probably the No. 1 way to reduce their mortality rates so that they don’t have to suffer the expense, the personal pain and suffering the family’s pain and suffering. As we know, investing in healthy behaviors and helping people change and battle addictions is not real popular in many, places. And so, my hope is that our research will ultimately get translated into real-world practice, but it’s not really there yet.

Megan says it often takes years for research to be applied in the real world. But the results you get from paying people to quit smoking are large, and it’s not as if this idea is new. The research has been there for over a decade. She says if the government starts implementing this — specifically, Medicare and Medicaid — other insurers will probably follow.

I want to end by making an observation about how American health care is structured and why insurers may not always invest in things that we think will have long term benefits for patients, like paying them to quit smoking. Think about a typical health plan. The people that it covers may stick around in that health plan for five to 10 years. That could be well before any cost savings and health improvements from getting people to quit smoking are realized. For health plans, paying people to quit smoking may not feel like an investment, because the potential cost savings wouldn’t accrue to them. They’d be realized by other health plans. And that reflects a failure in the market. Treatments that have long-term benefits to patients and to society should be encouraged, even if individual health plans don’t think that they’ll reap the benefits. This isn’t just an issue for paying people to quit smoking, by the way. It’s much broader than that. New medical treatments are being developed every day, some of which cost insurers hundreds of thousands of dollars or more, per patient. The benefits of those therapies to insurers might not be realized immediately, which may give them pause, but that doesn’t mean that those treatments aren’t worth investing in. So, the lack of programs that pay people to quit smoking is part of a broader problem that’s hard to solve.

Anyway, that’s it for today’s episode of Freakonomics, M.D. A big thank you to Megan Piper, Kevin Volpp, and Mitesh Patel for taking the time to talk to me. As always, if you’d like, please send me your thoughts about this or any episode. I’m at That’s B-A-P-U at And, if you’d be so kind, leave us a review wherever you listen to this show. It really helps out. If you’re interested in learning more about the show, or if you want to check out the transcript for this episode, that’s all at Thanks for listening.

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Freakonomics, M.D. is part of the Freakonomics Radio Network, which also includes Freakonomics Radio, No Stupid Questions, and People I (Mostly) Admire. This show is produced by Stitcher and Renbud Radio. You can find us on Twitter and Instagram at @drbapupod. Original music composed by Luis Guerra. This episode was produced by Jake Harper and mixed by Eleanor Osborne. The supervising producer was Tracey Samuelson. Our staff also includes Alison Craiglow, Greg Rippin, Zack Lapinski, Mary Diduch, Ryan Kelley, Rebecca Lee Douglas, Morgan Levey, Emma Tyrrell, Jasmin Klinger, Lyric Bowditch, Jacob Clemente, and Stephen Dubner. If you like this show, or any other show in the Freakonomics Radio Network, please recommend it to your family and friends. That’s the best way to support the podcasts you love. As always, thanks for listening.

PIPER: There was one community that was running a shot and a beer campaign. You came into the bar, and you got your shot, and then you got a free beer. It was very popular. But there are lots of incentives for vaccinations these days.

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  • Megan Piper, professor of medicine at the University of Wisconsin.
  • Kevin Volpp, professor of medicine and medical ethics & policy and founding director of the Center for Health Incentives and Behavioral Economics at the University of Pennsylvania.
  • Mitesh Patel, vice president for clinical transformation and national lead for behavioral insights at Ascension Health.




NOTE: In addition to the studies on financial incentives and smoking cessation that focused on Medicaid recipients, there have been major trials in large employer settings, led by Kevin Volpp and Scott Halpern, which found that financial incentives roughly tripled smoking cessation rates at 6-12 months and that increased cessation rates were sustained for several months post-intervention. Following these results, employers such as CVS Health, General Electric and others have sought to incentivize smoking cessation, typically by charging smokers more for their insurance premiums than non-smokers. For more information on these studies, see:

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