Behavioral Economics Tested In New Health Law

Modern Healthcare reports on efforts to apply behavioral economics to health care.

The new health law contains "many opportunities to nudge people toward better health choices. … 'In healthcare, for years and years and years there's been an interest in changing provider and consumer behavior,'" says Stanford professor Alan Garber. "What's new is that money is flowing into research on behavioral economics, and the government is getting involved, Garber and others said. … But some worry that behavioral economics could exacerbate health disparities, or inadvertently punish the elderly or people who suffer from chronic diseases."

One example in the health law "is a change in employer wellness program incentives. Starting in 2014, employers can offer workers rewards worth up to 30 percent to 50 percent of their cost of health coverage for participating in a wellness program and meeting health benchmarks. The law also sets up a 10-state pilot program for similar wellness initiatives on the individual insurance market. The idea is to create more incentives for workers than is allowed by law today to improve their health, and thus lower medical costs for everyone." Some advocacy groups, ranging from the American Diabetes Association to the AARP, say the incentives could penalize those with chronic diseases by forcing them to pay more for healthcare" (Vesely, 5/10).

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