The use of financial incentives to change health-related behaviors is becoming increasingly common. However, the results of incentive schemes in the past have been mixed.

One reason may be that the underlying psychology behind incentive programs still needs to be fully understood. For example, a lottery-based financial incentive scheme can encourage people to attend eye screening appointments but only increases vaccination rates if the incentive is immediate.

Motivate Patients

Incentives are often a key driver for improving patient behaviors and healthcare outcomes. Patients may be offered incentives to sign up for a wellness program or participate in a vaccination campaign. Employers may provide employees with cash rewards to encourage healthy eating and exercise. Many ‘know your HIV’ programs in developing countries offer incentives to ensure people pick up their results.

Payment per achievement, in the form of payments to physicians for performing certain procedures or achieving certain quality metrics, is one method healthcare systems use to motivate providers to deliver value-based care.

But how much do these incentives work? Studies have shown that incentives’ effectiveness depends on the reward behavior and subtle design details, such as how an incentive is delivered or framed. Using behavioral science to drive these programs could yield better results and cost savings. For example, one controlled study found that a targeted, micro-incentive approach generated eight dollars in cost savings for every dollar spent on the program.

Encourage Adherence

Incentives can be used to encourage people to stick with their health goals. This can be done through various approaches, including price signals such as sin taxes or subsidies and commitment devices such as public contracts where individuals agree to change their behavior for a set period in return for additional benefits.

Several studies have reported that incentives informed by behavioral economics can improve adherence. However, these incentives have rarely been tested among youth living with HIV despite the high need for enhanced compliance.

One study implementing an incentive-based model to increase adherence reported that the program improved viral load suppression outcomes. The study also included several complementary measures, such as regular client-centered adherence meetings, monthly adherence audits, and feedback reports. Incentive magnitudes vary widely across studies, with payments ranging from annual provider income. However, most studies need to report detailed information regarding the amount of incentives and how they are paid.

Encourage Routine Check-Ups

Incentives are one route to encouraging routine check-ups and other trends, such as value-driven purchasing, patient-centered care and clinical performance management. But it’s important to consider how incentives are framed and designed. Using price signals to encourage health behaviors can be successful; for example, increasing the cost of tobacco and alcohol has been shown to reduce consumption.

However, introducing rewards can also backfire. For example, freebies like doughnuts or movie tickets can discourage people from getting the COVID-19 vaccine.

Incentives can be offered to individuals, groups of providers or even entire health systems. They can be tied to individual, group, or network performance markers or even at the practice or integrated delivery system level. The size of these incentives varies widely, and their frequency can be monthly, quarterly or annually. Moreover, linking incentives to health outcomes or measures can be demotivating because improvements tend to plateau over time. Instead, focusing on measurable improvements in quality or cost may be more effective.

Encourage Self-Care

Incentives are often viewed as encouraging healthy behavior and reducing overall healthcare costs. However, supporters and critics disagree on whether incentives are appropriate and effective. Supporters generally believe that people should be encouraged where possible into behaviors that promote improved health outcomes and that appropriately targeted incentive schemes can provide a form of symmetric or libertarian paternalism that steers people toward better choices without necessarily limiting what those choices are.

For example, one study randomly assigned participants to receive0 cash incentive for visiting their primary care provider (PCP) after enrolling in a community-based primary care program. These low-income patients were newly eligible for free or low-cost health insurance because the state had not relaxed its stringent Medicaid eligibility requirements.

The researchers found that a small financial incentive increased the number of first-time visits relative to the non-incentivized group. They also found that incentives framed as gains were more effective than those framed as losses.