I recently wrote about a report that showed consumers' (bad) behavior leads to $163 billion in wasteful pharmacy-related costs each year. Now, as reported by Modern Healthcare's Rebecca Vesely, many insurers and employers are trying to get consumers to make healthier choices - in an effort to curb our country's health-care spending.
In her lengthy piece, Vesely explores the concept of behavioral economics and how consumers can be prompted to change their behavior. She talks about incentives built into the new health-care law - starting in 2014, for example, employers can offer workers rewards for participating in a wellness program and meeting health benchmarks - and she discusses the health-related "carrots and sticks" that some companies offer their employees.
Health economist Alan Garber, MD, PhD, commented that "there's definitely a general fascination about this area." But, as Vesely stresses in her piece, there are still a lot of unknowns when it comes to the ideal balance between incentives and penalties:
“Behavioral incentives can be powerful, but they are unlikely to overcome a powerful financial incentive,” Garber said. So, for some people, an expensive healthcare plan they have to pay for in monthly premiums could be less appealing than a once-a-year financial penalty [that, starting in 2014, people will have to pay for not owning any insurance].
The dangers of financial penalties in healthcare have been shown time and time again when examining prescription drug use. If copayments go up too high, then some people stop filling their prescriptions and wind up sicker.
On the other hand, financial incentives don't always work to change behavior, as evidenced by the disappointing results in physician pay-for-performance programs.
“We'll be seeing some interesting experiments unfolding over the next few years,” Garber said. “This will, in the end, play out in the market.”