Using Behavioral Economics and Psychology to Create Effective Provider Incentives

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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:
$100,194.00
Approval Date:
January 6, 2014

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