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The Effect of a Bonus Program for Preventive Health Behavior on Health Expenditures

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  • Boris Augurzky
  • Arndt Reichert

    ()

  • Christoph M. Schmidt

Abstract

This paper contributes to the analysis of policy measures that attempt to reduce health care expenditures of insurers. We examine the impact of a cash bonus program for preventive health behavior of a German health insurer on prevention effort and health care expenditures using a unique administrative dataset that covers all insurants of the health insurer between 2003 and 2008. We find that the program has been successful in both increasing individual prevention effort and achieving net savings every year since its implementation in 2004. However, while the estimated effect on health care expenditures is statistically significant in the first year, the effects for the second, third, and fourth years turn insignificant. In the fifth year, results for net savings are sensitive in terms of statistical significance when accounting for dynamic selection into the treatment.

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Bibliographic Info

Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0373.

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Length: 34 pages
Date of creation: Oct 2012
Date of revision:
Handle: RePEc:rwi:repape:0373

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Related research

Keywords: Financial incentives; health care expenditures; dynamic treatment effect; health prevention; inverse probability weighting; bonus program;

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References

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  1. Boris Augurzky & Thomas K. Bauer & Arndt R. Reichert & Christoph M. Schmidt & Harald Tauchmann, 2012. "Does Money Burn Fat? – Evidence from a Randomized Experiment," Ruhr Economic Papers 0368, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  2. Byrne, Margaret M. & Thompson, Peter, 2001. "Screening and preventable illness," Journal of Health Economics, Elsevier, vol. 20(6), pages 1077-1088, November.
  3. Gary Charness & Uri Gneezy, 2009. "Incentives to Exercise," Econometrica, Econometric Society, vol. 77(3), pages 909-931, 05.
  4. Joffe, Marshall M. & Ten Have, Thomas R. & Feldman, Harold I. & Kimmel, Stephen E., 2004. "Model Selection, Confounder Control, and Marginal Structural Models: Review and New Applications," The American Statistician, American Statistical Association, vol. 58, pages 272-279, November.
  5. Wu, Stephen, 2003. "Sickness and preventive medical behavior," Journal of Health Economics, Elsevier, vol. 22(4), pages 675-689, July.
  6. Antonio Giuffrida & Hugh Gravelle, 1998. "Paying patients to comply: an economic analysis," Health Economics, John Wiley & Sons, Ltd., vol. 7(7), pages 569-579.
  7. Augurzky, Boris & Schmidt, Christoph M., 2001. "The Propensity Score: A Means to An End," IZA Discussion Papers 271, Institute for the Study of Labor (IZA).
  8. Alberto Abadie & Guido W. Imbens, 2006. "Large Sample Properties of Matching Estimators for Average Treatment Effects," Econometrica, Econometric Society, vol. 74(1), pages 235-267, 01.
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Cited by:
  1. Reichert, A.;, 2013. "Obesity, Weight Loss, and Employment Prospects: Evidence from a Randomized Trial," Health, Econometrics and Data Group (HEDG) Working Papers 13/20, HEDG, c/o Department of Economics, University of York.

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