Using Behavioral Economics and Psychology to Create Effective Provider Incentives


One of the current areas of focus for the Fund’s new Breakthrough Opportunities Program is the potential to improve health care provider incentive programs (e.g., pay-for-performance programs) by applying insights from behavioral economics and psychology.  Pay-for-performance may be the most widely used reform to the long-standing fee-for-service based incentive system, but it essentially relies on classical economic thinking based on the assumption that physicians are perfectly rational.  These initiatives have also largely ignored non-monetary motivations.  This project will provide the opportunity to work with leading behavioral economists and produce a foundational framework paper on how behavioral economics can be used to better design and implement financial and non-financial incentives to more effectively influence the behaviors of health care providers.  In addition, a research agenda will be developed building on these theories, which can be used to test enhanced incentive designs in actual health delivery settings as a potential phase 2 of this project.

Grant Details

Grantee Organization:
Trustees of the University of Pennsylvania
Principal Investigator:
Kevin Volpp, M.D., Ph.D.
Award Amount:
Approval Date:
January 6, 2014

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