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

Author

Listed:
  • Augurzky, Boris
  • Reichert, Arndt R.
  • Schmidt, Christoph M.

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 eff ort and health care expenditures using a unique administrative dataset that covers all insurants of the health insurer between 2003 and 2008. We fi nd that the program has been successful in both increasing individual prevention eff ort and achieving net savings every year since its implementation in 2004. However, while the estimated eff ect on health care expenditures is statistically signifi cant in the fi rst year, the effects for the second, third, and fourth years turn insignifi cant. In the fi fth year, results for net savings are sensitive in terms of statistical signifi cance when accounting for dynamic selection into the treatment.

Suggested Citation

  • Augurzky, Boris & Reichert, Arndt R. & Schmidt, Christoph M., 2012. "The Effect of a Bonus Program for Preventive Health Behavior on Health Expenditures," Ruhr Economic Papers 373, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    • Handle: RePEc:zbw:rwirep:373
    DOI: 10.4419/86788428
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    References listed on IDEAS

    as
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    2. Stock, Stephanie & Schmidt, Harald & Büscher, Guido & Gerber, Andreas & Drabik, Anna & Graf, Christian & Lüngen, Markus & Stollenwerk, Björn, 2010. "Financial incentives in the German Statutory Health Insurance: New findings, new questions," Health Policy, Elsevier, vol. 96(1), pages 51-56, June.
    3. Augurzky, Boris & Bauer, Thomas K. & Reichert, Arndt R. & Schmidt, Christoph M. & Tauchmann, Harald, 2012. "Does Money Burn Fat? Evidence from a Randomized Experiment," IZA Discussion Papers 6888, Institute of Labor Economics (IZA).
    4. Michael Lechner & Ruth Miquel, 2010. "Identification of the effects of dynamic treatments by sequential conditional independence assumptions," Empirical Economics, Springer, vol. 39(1), pages 111-137, August.
    5. Wu, Stephen, 2003. "Sickness and preventive medical behavior," Journal of Health Economics, Elsevier, vol. 22(4), pages 675-689, July.
    6. Augurzky, Boris & Schmidt, Christoph M., 2001. "The Propensity Score: A Means to An End," IZA Discussion Papers 271, Institute of Labor Economics (IZA).
    7. Gary Charness & Uri Gneezy, 2009. "Incentives to Exercise," Econometrica, Econometric Society, vol. 77(3), pages 909-931, May.
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    9. Lechner, Michael, 2009. "Sequential Causal Models for the Evaluation of Labor Market Programs," Journal of Business & Economic Statistics, American Statistical Association, vol. 27, pages 71-83.
    10. 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.
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    Citations

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    Cited by:

    1. Arndt R. Reichert, 2015. "Obesity, Weight Loss, and Employment Prospects: Evidence from a Randomized Trial," Journal of Human Resources, University of Wisconsin Press, vol. 50(3), pages 759-810.
    2. Schmitz, Hendrik & Westphal, Matthias, 2015. "Short- and medium-term effects of informal care provision on female caregivers’ health," Journal of Health Economics, Elsevier, vol. 42(C), pages 174-185.
    3. Eilers, Lea & Pilny, Adam, 2015. "The effect of financial incentives on weight loss: Documentation of data from a randomized experiment," RWI Materialien 99, RWI - Leibniz-Institut für Wirtschaftsforschung.
    4. Ines Weinhold & Christian Schindler & Nils Kossack & Benjamin Berndt & Dennis Häckl, 2019. "Economic impact of disease prevention in a morbidity-based financing system: does prevention pay off for a statutory health insurance fund in Germany?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(8), pages 1181-1193, November.

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    More about this item

    Keywords

    financial incentives; health care expenditures; dynamic treatment effect; health prevention; inverse probability weighting; bonus program;
    All these keywords.

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health

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