The Stew BLOG

To Build a Culture of Health, Should We Offer Financial Incentives to Patients?

Amanda McIntosh, Senior Communications Associate | 12/23/2016

This is the final Finance Friday blog of 2016. All of us at ReThink Health wish you happy, safe, and peaceful holidays. See you in 2017!

As we pursue a culture of health, we hear a lot about experimental payment models and mechanisms that reward providers for keeping patients healthy. It appears that providers and those who are running the “system” are receiving some sort of cut, but not the patient. Is the reward for patients purely better health?

Providers are often viewed as credible, trusted resources to patients, and the idea of rewarding them for their role is widely accepted. But what about the role of the “most underutilized resource” in health care: the patient? Would we be any better at improving health outcomes and reducing costs if we offered financial incentives for people to take on new behaviors that would improve their own health, even if they could potentially fail? Why should patients be left out of the monetary rewards picture–especially considering their outsized role in contributing to their own health?

I recently explored the literature examining the effectiveness of financial incentives on patient behavior and learned they are successful (to a statistically significant degree) when implemented under specific conditions. Here are four:

1. The reward has to be of high-perceived value to the population being served. There are numerous types of incentives ranging from payment, coupons to gift cards to vacations. Research indicates that socioeconomic status can influence how individuals perceive or define the value of a reward; therefore, there is no standard incentive that appeals to all across the board.

2. The reward has to be provided immediately after the patient completes the desired behavior. For example, after members of a cohort passed a urine drug test, there was a better effect on behavior when the reward was immediately released.

3. The intervention must be implemented in a time-limited period. Studies found that, in smoking cessation efforts, quit rates between the incentivized group and the control group were no longer statistically significant after six months. However, short-term smoking cessation interventions are arguably valuable, for example, when motivating pregnant smokers to quit for the duration of their pregnancies.

4. The intervention must target a simple, discrete behavior change, such as appointment adherence, immunizations, and completion of short-term drug regimens. Most current literature does not suggest that financial incentives improve self-efficacy for changing complex, habitual, lifestyle behaviors, such as smoking, drug use, sexual behavior, or eating. (Although this study says incentives can triple smoking cessation in the long run!)

Digging into this last condition, I discovered that financial incentives can effectively heighten patients’ awareness and interest in healthy behaviors, and motivate them to kick-start new habits. This got me thinking: perhaps there is potential to catalyze people’s agency in their daily lives, outside of the clinical sphere, in the name of prevention? For example, financial incentives could be used to motivate patients to experiment with exercising or eating healthy (as opposed to just taking their meds or showing up for appointments). After all, how people behave beyond the clinical setting has a big influence on their health. And that’s not just a function of how people work with their physician.

Also, we are seeing innovative structures emerge to coordinate organizations that influence the social determinants of health, such as accountable communities for health (ACHs). Could the goals of these ACHs and value-based care models be strengthened through financial incentives to patients? What I mean is, could these comprehensive efforts to address both clinical and social needs be further enhanced through the extension of payments to individuals to increase their self-efficacy? Kevin Volpp, director of the Center for Health Incentives and Economic Behavior asserts:

Individual behavior is a key driver of poor health and high health costs . . . we know that providing people with information is necessary, but information alone is usually not sufficient to change behaviors. Behavior economics suggests that people are predictably irrational. Decisions affected by present bias, loss framing, emotions, social context, inertia, incentive delivery and design, and choice environment are critical in the effort to help people improve their health . . . by taking advantage of typical ‘decision errors’ we can steer people toward healthier behaviors.

When a patient leaves the doctor’s office, they are faced with a choice to heed or dismiss medical advice. But they do so while returning to–and being subject to–their environment. If there were an extra monetary push reinforcing individuals’ healthy behaviors upon returning to their environments, combined with new structures that support improvements in the social determinants, could the likelihood increase that we are creating conditions that help strengthen patient agency within the culture of health? Or, conversely, would paying the patient have a negative effect on creating a culture of health?

As we rethink traditional stakeholder dynamics and tinker with payment options, it might be worth considering whether our ideas about incentives are a little lopsided. If we called for incentives to be offered to patients as well as providers, perhaps we could influence the entire dynamic of care. As patient-centered care contends, patients aren’t merely objects to be ushered through care teams and regimens; and it’s possible that there would be more potential to change our tendency to treat them as such when we put them in the position to be highly utilized and valued stakeholders.

What do you think? Paying patients for compliance and adherence forever is obviously not sustainable, but should we consider giving providers or some other entities a modest financial tool to help activate patients into adopting healthier lifestyles? How would this help or hinder the projects YOU are working on in your community? Please comment below.

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