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Publication Briefs

Health Affairs Commentary Focuses on Incentives to Impact Patient Engagement and Health Behavior

Patient engagement has increasingly become a focus of efforts to reform the U.S. healthcare system, and is particularly important for people with chronic conditions, who often have a hard time managing their own care. The importance of patient engagement also has been recognized in new healthcare financing arrangements, such as accountable care organizations, that turn patients from sources of revenue into sources of costs if patient behaviors leading to poor outcomes are not changed. Moreover, in a recent survey of employers, 61% identified "employees' poor health habits" as the top challenge to maintaining affordable benefits. Reflecting this confluence of interests, increasing numbers of insurers, employers, and providers are implementing wellness programs and incentives intended to promote healthy behaviors. This essay discusses a range of these efforts, and how they might be made more effective.


  • The Affordable Care Act permits the introduction of incentives for healthy behaviors that are potentially worth up to half of total insurance premiums, providing unprecendented opportunities for innovation in incentives and health benefit design to affect employees' health behaviors.
  • However, policies and programs that are not informed by data or that assume patients always behave in ways that are economically rational are likely to do little more than shift costs, when what we most want to achieve are healthy behaviors. For example, incentive programs that offer patients small and frequent payments for behaviors that would benefit them, such as medication adherence, can be more effective than programs with incentives that are far less visible because they are folded into a paycheck or used to reduce a monthly premium. Recent experience with financial incentives suggests that they are often deployed without careful consideration of the underlying psychology that can make programs effective or ineffective.
  • Insights from behavioral economics can lead to better-designed programs with the potential to increase patient engagement and deliver dividends for patients and favorable cost-effectiveness ratios for insurers, employers, health systems, and other entities.

Going forward, rigorous data on the comparative effectivenes of financial and social incentives, either in comparison or in conjunction with other types of interventions, will provide useful guidance to employers, insurers, benefit design consultants, health system managers, and policymakers.

This study was partly funded by HSR&D. Drs. Volpp and Asch are part of HSR&D's Center for Health Equity Research and Promotion, Philadelphia, PA.

PubMed Logo Loewenstein G, Asch D, and Volpp K. Analysis & Commentary: Behavioral Economics Holds Potential to Deliver Better Results for Patients, Insurers, and Employees. Health Affairs July 2013;32(7):1244-50.

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HSR requires notification by HSR-funded investigators about all articles accepted for publication. These journal articles are reviewed by HSR and publication briefs or summaries are written for a select number of articles that are then forwarded to VHA Central Office leadership to keep them informed about important findings or information. Articles to be summarized are selected by HSR based on timeliness of the findings, interest of leadership, or potential impact on the organization. Publication briefs are written for only a small number of HSR published articles. Visit the HSR citations database for a complete listing of HSR articles and presentations.

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