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April 4, 2012

Incentives in Health: Different Prescriptions for Physicians and Patients

Author Affiliations

Author Affiliations: Carnegie Mellon University, Pittsburgh, Pennsylvania (Dr Loewenstein); Penn CMU Roybal P30 Center in Behavioral Economics and Health, and Leonard Davis Institute Center for Health Incentives and Behavioral Economics (Drs Loewenstein, Volpp, and Asch), Departments of Medicine (Drs Volpp and Asch), and Health Care Management, Wharton School (Drs Volpp and Asch), University of Pennsylvania, Philadelphia; and Center for Health Equity Research & Promotion, Philadelphia Veterans Affairs Medical Center, Philadelphia, Pennsylvania (Drs Volpp and Asch).

JAMA. 2012;307(13):1375-1376. doi:10.1001/jama.2012.387

Financial incentives abound in health care. They are found in the ways physicians are paid and in the ways health insurance coverage, co-payments, and deductibles are structured for patients. The effects of these incentives are often understood through conventional economic principles, with the assumption that individuals are self-interest maximizers who respond directly to changes in incentives. In contrast, behavioral economics imports insights from psychology and recognizes that individuals often do not respond to incentives as rationally as they might. In some cases, individuals lack information, but in others, they just seem to act contrary to their own known interests, for example, when they overeat, fail to take medication, or neglect to wear seat belts.

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