Economics and Healthcare:

Incentivizing Better Healthcare Choices

Although health is priceless, affording good health and healthcare has grown increasingly costly, particularly in the United States. Stakeholders with an interest in improving both the populations health while still keeping healthcare costs contained include patients, patients families, providers, employers who provide health insurance to employees and wish to keep employees sick days at a minimum, insurance providers, and government policy-makers. Healthcare considerations encompass reducing the pervasiveness of chronic diseases, such as type 2 diabetes, as well as reducing the spread of infectious disease. These concerns are not limited to the current concerns about coronavirus but also the spread of measles, mumps, and other diseases once thought to be eradicated by vaccination.

It is true that economic incentives to encourage good health can be used to promote healthy behavior. These may include techniques...

In terms of positive reinforcement, offering care at little or no cost, such as subsidized health insurance through the Affordable Care Act (ACA), free vaccines to promote the public good, and free public health screening would all be considered direct economic incentives designed to improve population health, reducing the immediate economic pain to seeking out screening and earl treatment. Negative economic reinforcers include so-called sin...…health, which can be more difficult to conceptualize.

From a healthcare standpoint, reducing primary care costs is critical. Incentivizing wellness behaviors is ultimately more effective than using more intensive secondary and tertiary treatments to address illness once it has manifested. There are also more general, less tangible benefits to increasing overall health of the population, including reduced sick time from work, reduced stress and anxiety, overall improved quality of life, and even increased socioeconomic mobility, as healthier people are better able to work for their personal and family social betterment (Hale, 2000). Behavioral economics is not a perfect solution, but it can be used as one…