Healthcare Incentives

The financing of healthcare needs new methods that support innovations in prevention, diagnosis, and treatment for sustainable provision of effective services. Our work includes developing methods to pay for expensive, but high-value cures. We also analyze drivers of variation in healthcare expenditures, and discover ways to reward quality and eliminate waste.

Andrew Lo is developing new finance methods to pay for high-cost cures in a sustainable way, such as “drug mortgages”.

Danielle Li is working on projects that consider the economic incentives to develop novel pharmaceuticals to inform research-and-development investments and reforms of regulatory oversight.

Bob Pozen is studying how state healthcare reinsurance pools impact the costs and plans on the Affordable Care Act health insurance exchanges – and who benefits.

Levers to support innovations include financial and economic tools aimed at individual providers in a health system to provide guideline-adherent care, as well as tools that encourage organizations to develop innovative treatments and other care improvements.  

Mike Whinston is working on understanding the best ways to use financial incentives to inform and motivate healthcare providers to deliver guideline-adherent care.

Joseph Doyle studies which physician and hospital quality measures indicate differences that matter to patients choosing where to get care. Learn more

John Van Reenen has completed multiple studies analyzing the drivers of price variation across markets in the US, showing, for example, that increases in market concentration (fewer insurance companies, or fewer provider systems) lead to higher prices without increases in efficiency or quality. He suggests testable recommendations to reduce price variation, including injecting more competition into the marketplace, direct legislation of pricing, and changes in how hospital mergers are permitted.

Erez Yoeli and Jonas Jonasson are working on a project with the Staten Island Performing Provider System to study how signing an Opioid Prescribing Pledge changes the behavior of providers and impacts outcomes.

Financial and other incentives can result in behavior change by patients in a variety of ways. The goal is to nudge individuals to take evidence-based steps to improve their health. Such incentives can include paying patients for completing their wellness visits, or asking patients to consider the community-wide benefits from taking one's medications. Researchers have also studied the impact of social network-based information on health behaviors.

Joseph Doyle is working with United Healthcare to test financial incentives for wellness visits. Specifically, if one member of a family receives care, they want to know whether that encourages other members of the same family to do so as well.

David Rand and Erez Yoeli use behavioral insights, including reputational concerns and desires to support the public good, along with analytics, to develop and test robust digital health tools. Currently, in Kenya, they are testing a platform combining patient reminders and human interventions to improve adherence to TB and HIV medication. They plan to expand this study to other regions. Learn more

Sinan Aral used social-media data from a global social network of over one million runners over five years to study how we influence each other’s healthy behaviors to inform population-health interventions. His study showed that exercising is contagious. For example, on the same day, on average, an additional kilometer run by friends can inspire someone to run an additional three-tenths of a kilometer. An additional 10 minutes run by friends can inspire someone to run three minutes longer.