Changes In Financial Incentives Research Articles

Provider responses to the expansion of public subsidies in healthcare: The case of oral chemotherapy treatment in Australia

We examine provider responses to the expansion of public subsidies in 2015 for innovative oral chemotherapy treatment, in a health system where providers were free to determine their own prices. The new treatment was known to have similar efficacy to its traditional intravenous alternative and was preferred by patients for its at-home administration. However, from a policymaker's perspective, the potential for misalignment between patient and provider preferences was significant given the shift to full reimbursement for the oral chemotherapy medication but no change in fee-for-service payments for associated chemotherapy services. Under this scenario, a shift away from traditional intravenous chemotherapy may entail reduced activity and revenues associated with infusions for providers, and we hypothesise that it may result in unintended policy consequences such as reduced take-up of the new therapy or higher prices. We implement a difference-in-difference model using national administrative data on services provided, and chemotherapy medications prescribed, by providers to 1850 patients in New South Wales, Australia. Our estimates indicate that the subsidies expanded access to oral chemotherapy for newly eligible patients by 15 percentage points. However, prices charged by providers for an episode of care rose by 23 percent, driven mostly by increases in service volumes. The results illustrate the importance of understanding differential provider responses to policy changes in financial incentives.

Understanding the rising trend in female labour force participation

AbstractFemale labour force participation has increased tremendously since World War II in developed countries. Prior research provides piecemeal evidence identifying some drivers of change but largely fails to present a consistent story. Using a rare combination of data and modelling capacity available in Australia, we develop a new decomposition approach to explain rising female labour force participation since the mid‐1990s. The approach allows us to identify the role of tax and transfer policy reforms as well as three other factors that have been shown to matter by earlier studies: (i) changes in real wages; (ii) population composition changes; and (iii) changes in labour supply preference parameters. For the first time, all these factors are identified through a single consistent decomposition framework. A key result is that – despite the ongoing emphasis of public policy on improved work incentives for women in Australia and elsewhere – changes in financial incentives due to tax and transfer policy reforms have contributed relatively little to achieve these large increases in participation. Instead, the other three factors drive the increased female labour force participation.

The two‐child limit and fertility decision making: When policy narratives and lived experiences collide

AbstractThe UK's two‐child limit restricts the child element in Universal Credit and Tax Credits to two children in a household. Given that the policy aims to influence the fertility decision making of parents in (or at risk of) poverty, it is important to explore the impact it has here. This article contrasts the policy rationale for the two‐child limit with everyday realities of fertility decision making. We share new empirical findings from qualitative longitudinal research with parents directly affected by the two‐child limit, contrasting these with the assumptions found in government speeches and statements on the policy. This exploration reveals a series of mismatches, which help explain the relative absence of fertility effects, which has been uncovered in previous quantitative analysis. We show how a government narrative of “choice” over fertility decisions is contradicted by situated realities, where choice is often absent or unresponsive to changes in financial incentives. We also find low levels of awareness of the two‐child limit, militating against it affecting fertility decision making. Our findings demonstrate the importance of better and more sustained engagement with qualitative evidence in the design and review of policies, essential if we are to prevent harms like those witnessed as a result of the two‐child limit.

Joint retirement behaviour and pension reform in the Netherlands

We examine the effects of a major pension reform in 2015 on the joint retirement decisions of working couples in the Netherlands. The reform abolished the partner allowance, a state pension supplement for a nonworking partner below the state pension age. At the same time, actuarially generous early retirement arrangements were made less attractive. Using rich administrative data, we estimate a multivariate mixed proportional hazards model that distinguishes between several sources of joint retirement: financial incentives, other causal mechanisms that make retirement of one spouse more likely when the other spouse retires (e.g., due to complementarities in leisure or social norms) and correlated preferences (observed and unobserved heterogeneity). We find that, conditional on observed and unobserved characteristics, the reform reduced the tendency to retire jointly and argue that this is not only due to a change in financial incentives but also to a change in the social norm.

Relabeling, retirement and regret

Can simply changing the public definition of a normal retirement age impact retirement, without any associated financial incentive changes? We study a reformulation of the retirement system in Finland that relabeled retirement ages with only modest and continuous changes in financial incentives. We find that relabeling matters: both graphical evidence and estimated hazard models reveal an enormous change in retirement when individuals face a newly defined “normal retirement” age. We also find evidence consistent with increased retirement “regret,” as the marginal workers induced to retire by relabeling are more likely to return to work.

Accountable and Transparent Palliative Quality Measures Will Improve Care.

How do we build on the proven successes of hospice and palliative care and build clinical programs to serve those who need it in the context of real-world health care? Experiences with glide pathways have clearly shown that changes in financial incentives must always be implemented with counterbalancing measures that ensure that seriously ill patients are getting high-quality care consistent with their goals and values. There are quality measures for quality improvement and there are quality measures for accountability or transparency. We must balance any financial incentives with concrete quality measures that act as a check and balance to the care that is being provided. This area of investigation is rich in opportunity. Much research is needed to advance the craft of hospice and palliative care if the field is to move forward at scale in a timely manner. We need to democratize research and engage both "small r" and a "big R" researchers in the manner of other subspecialties such as oncology and cardiology. Future research should focus on building innovative systems and models of care to uncover needs of seriously ill patients and their caregivers and effectively cater to those needs.

Perceived care coordination among permanent supportive housing participants: Evidence from a managed care plan in the United States.

Homelessness is a pervasive public health problem in the United States (U.S.). Under the U.S. Affordable Care Act, the nation's public health insurance program (Medicaid) was expanded to serve more individuals, including those experiencing homelessness. Coupled with changes in financial incentives designed to reduce healthcare costs, health plans, hospitals and large health systems have started to operate permanent supportive housing (PSH) programmes as a healthcare benefit. To better understand patient perceptions of care coordination in a PSH programme operated by a large health plan in Southern California, we conducted 22 semi-structured in-depth patient interviews between October and November 2019. Two coders analysed these data inductively and deductively, using pre-identified domains and open coding. Coding reliability and thematic saturation were also assessed. Findings indicated positive experiences with care coordination for physical health and social supports, such as food distribution and transportation. Identified service gaps included mental health support and help securing public assistance (e.g., cash benefits). Opportunities to enhance PSH care coordination were also identified, such as the need for a simplified approach. Hospitals, health plans and systems considering PSH programmes may look to these results for implementation guidance.

Incentives modulate arousal and attention in risky choice

We investigated the effect of large changes in financial incentives on the process of decision-making by measuring autonomic arousal and visual attention during an incentivized lottery-choice task. High real stakes were accompanied by increased risk aversion and physiological arousal, and by shifts in attention toward safer alternatives. These effects were manifested both within and between individuals. We find no evidence that heightened risk aversion is a mistake. To capture the interactions of arousal and attention with subjective value during evidence accumulation, we developed and fit a new arousal-modulated Attentional Drift Diffusion model (aADDM). Our computational model demonstrates that arousal amplifies discounting of high-valued outcomes when participants attended to low-valued outcomes. Arousal and attention, and their interaction, are integral to the process of decision-making under risk.

Association of Discharge to Home vs Institutional Postacute Care With Outcomes After Lower Extremity Joint Replacement

Changes in financial incentives have led to more patients being discharged home than to institutional forms of postacute care, such as skilled nursing facilities (SNFs), after elective lower extremity total joint replacement (LEJR). To evaluate the association of this change with hospital readmissions, surgical complications, and mortality. This cohort study used cross-temporal propensity-matching to identify 104 828 adult patients who were discharged home following LEJR between 2016 and 2018 (after changes in financial incentives) and 84 121 adult patients discharged to institutional forms of postacute care (eg, SNFs) between 2011 and 2013 (before changes in financial incentives). A difference-in-differences design was used to compare differences in outcomes between these groups to a propensity-matched group of patients discharged to institutional postacute care in both periods. Data were collected from Pennsylvania all-payer claims database, which includes all surgical procedures and hospitalizations across payers and hospitals in Pennsylvania. Data were analyzed between August 2019 and February 2020. Type of postacute care (home, including home with home health vs institutional postacute care, including SNF, inpatient rehabilitation facilities, and long-term acute care hospitals). Main outcomes were 30- and 90-day hospital readmissions, LEJR complication rates, and mortality rates. Of 189 949 patients, 113 981 (60.0%) were women, and 83 444 (43.9%) were aged 40 to 64 years. The rate of discharge home increased from 63.6% (54 097 of 85 121) in 2011 to 2013 to 78.4% (82 199 of 104 828) in 2016 to 2018. In the adjusted difference-in-differences comparison, matched patients discharged home in 2016 to 2018 had significantly lower 30-day (difference, -2.9%; 95% CI, -4.2% to -1.6%) and 90-day (difference, -3.9%; 95% CI, -5.8% to -2.0%) readmission rates compared with similar patients sent to institutional postacute care in 2011 to 2013. Surgical complication and mortality rates were unchanged. Results were similar across payers and across hospital bundled payment participation status. In this cohort study, increases in discharges home following LEJR surgery did not seem to be associated with increased harm during a period in which changes in financial incentives likely spurred observed changes in postacute care.

Skilled Nursing Facility Characteristics Associated With Financially Motivated Therapy and Relation to Quality

ObjectivesIn October 2019, the Centers for Medicare & Medicaid Services (CMS) implemented a new payment model for skilled nursing facilities (SNFs) that eliminated financial incentives to provide high-intensity therapy. Yet high-intensity therapy in SNFs has been linked to better quality outcomes, potentially putting patients at risk if clinically indicated therapy is reduced under the new payment model. A metric to help differentiate between financially motivated vs clinically indicated therapy in SNFs is thresholding: the percentage of patients receiving therapy within 10 minutes of reimbursement thresholds. This study examined which SNF characteristics are associated with thresholding and how thresholding relates to quality outcomes. DesignSecondary analysis of 2016 CMS administrative data. Setting and Participants14,162 SNFs. MethodsSNF Public Use Files, Nursing Home Compare, and Provider of Services files were linked. We used linear regression models to (1) identify SNF characteristics associated with thresholding and (2) determine associations between thresholding and quality outcomes, controlling for SNF and patient characteristics. ResultsThresholding was 6.4 percentage points [95% confidence interval (CI) 5.4, 7.4] higher in SNFs with all contractor therapy staff vs all in-house staff. Compared with nonprofit SNFs, thresholding was 2.5 (95% CI 0.1, 2.9) and 1.6 (95% CI 0.4, 2.9) percentage points higher in governmental and for-profit SNFs, respectively. For each additional therapist per 1000 patient-days, SNFs had 2.9 (95% CI –3.4, −2.4) percentage points lower thresholding. Higher thresholding was significantly associated with worse quality outcomes, including lower rates of functional improvement and community discharge and higher rates of 30-day admissions, but magnitudes were small. Conclusions and ImplicationsSNFs with higher thresholding behavior may respond to changes in financial incentives under the new payment model by reducing clinically indicated therapy and should be monitored to ensure access to necessary therapy is maintained. Although thresholding behavior may indicate cost-intensive therapy practice, it may not have clinically significant implications for patients.

Financial incentives, fertility and early life child outcomes

This paper investigates the short term effects of financial incentives on fertility and early life child outcomes, by exploiting a substantial and unanticipated reform regarding maternity leave benefits: the switch from earnings dependent to fixed benefits, announced in April 2003 in Romania. Most employed women significantly gained from the reform, but high earning women were disadvantaged. Using Reproductive Health Survey data, I analyze the effects on live births, conceptions, abortions and early life child outcomes. The change in financial incentives did not influence short term conception rates but significantly decreased the probability of abortion, by a very large margin, leading to more live births. Outcomes related to early life chid development, such as prenatal maternal investments, child health at birth and breastfeeding, do not appear to be affected in the short run by the large average increase in maternity leave benefits.

Understanding the Rising Trend in Female Labour Force Participation

Female labour force participation has increased tremendously since World War II in developed countries. Prior research provides piecemeal evidence identifying some drivers of change but largely fails to present a consistent story. Using a rare combination of data and modelling capacity available in Australia, we develop a new decomposition approach to explain rising female labour force participation since the mid-1990s. The approach allows us to identify, for the first time, the role of tax and transfer policy reforms as well as three other factors that have been shown to matter by earlier studies. These are (i) changes in real wages, (ii) population composition changes, and (iii) changes in labour supply preference parameters. A key result is that –despite the ongoing emphasis of public policy on improved work incentives for women in Australia and elsewhere– changes in financial incentives due to tax and transfer policy reforms have contributed relatively little to achieve these large increases in participation. Instead, the other three factors drive the increased female labour force participation.

Understanding the Rising Trend in Female Labour Force Participation

Female labour force participation has increased tremendously since World War II in developed countries. Prior research provides piecemeal evidence identifying some drivers of change but largely fails to present a consistent story. Using a rare combination of data and modelling capacity available in Australia, we develop a new decomposition approach to explain rising female labour force participation since the mid-1990s. The approach allows us to identify, for the first time, the role of tax and transfer policy reforms as well as three other factors that have been shown to matter by earlier studies. These are (i) changes in real wages, (ii) population composition changes, and (iii) changes in labour supply preference parameters. A key result is that –despite the ongoing emphasis of public policy on improved work incentives for women in Australia and elsewhere– changes in financial incentives due to tax and transfer policy reforms have contributed relatively little to achieve these large increases in participation. Instead, the other three factors drive the increased female labour force participation.

Relabeling, Retirement and Regret

Focal retirement ages are a central feature of Social Security programs around the world, and provide a potentially powerful tool for policy makers who are interested in reforming retirement systems to address the growing funding shortfalls. But these tools often come hand in hand with significant changes in the financial structure of Social Security that can have independent, and potentially deleterious, impacts on retirees. In this paper, we use a major reformulation of the retirement system in Finland, featuring a relabeling of retirement ages with modest and continuous changes in financial incentives allows us to separately estimate the impact of relabeling from financial incentives in driving retirement decisions. We find that relabeling is particularly powerful as a determinant of date of retirement. Both graphical evidence and estimated hazard models reveal an enormous change in retirement when individuals face a newly defined “normal retirement” age. We also present a new approach to assessing the welfare implications of induced earlier retirement: looking at the impact on return to work. We show that the marginal workers induced to retire by relabeling are much more likely to return to work over the next three years than is the typical worker. This suggests that there is a marginal increase in regret among those who respond to this change in retirement ages. Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Value from Healthcare and Why It Is Needed in Canada.

Canada's high level of spending on healthcare and lagging performance are leading policy makers and system managers to explore the concept of value. The concept, applied to healthcare, is appearing in medical media and policy documents with increasing frequency and is being used to describe patients' outcomes vis-à-vis the costs of achieving the outcomes. A uniquely Canadian interpretation of value is needed that recognizes that patients', providers' and society's perspectives of the value of the same health service or medical technology differ. This issue of Healthcare Papers presents complementary articles whose authors explore options for improving the value from public spending on healthcare. Commonalities among the articles indicate that improving value from healthcare should focus on understanding what matters to patients and their caregivers and measuring health and health outcomes and that changes in financial incentives are overdue to support a higher degree of integration between providers and their organizations.

Financial incentives for mortgage prepayment behavior: Evidence from Dutch micro data

This paper exploits a unique set of Dutch micro data between 2006 and 2014 to analyze the heterogeneous responses in prepayment behavior to changes in financial incentives. Prepayment is defined as paying back a part of the mortgage on top of the contractual payment schedule, excluding refinancing. Because interest rates on savings have decreased while the rates on existing mortgages are generally fixed for some years, the value of prepaying a mortgage has increased. This corresponds with the surge in prepayments at the Dutch mortgage market. Using various econometric specifications, that take into account unobserved heterogeneity and endogeneity, the paper finds that incentives to prepay explain only a part of prepayment behavior. However, incentives to prepay explain a much larger part of prepayments for wealthier households and for households with a high net-of-tax interest rate differential.

Professionals' perspectives towards health promotion in residential aged care: an explorative study in Austria.

Following the trend in most developed countries, in Austria the oldest old are the fastest growing population group. Among this group, there is a high prevalence of multimorbidity, functional impairment, dementia and psychiatric conditions. While health promotion (HP) has been considered relevant in coping with the challenges of an aging population, it has so far been viewed as a foreign concept in relation to the oldest old, especially those living in residential aged care (RAC) facilities. Although there is an acknowledgement that HP should be integrated into routine nursing, there has been little research on how professionals working with RAC interpret and implement HP. In this study, 13 semi-structured interviews were carried out with professionals from four major Austrian RAC providers. The data were analysed using thematic analysis. The findings show that, typically, professionals understand HP as a concept that is oriented towards maintaining potentials and resources, thereby promoting self-determination, autonomy and social integration, including frail and functionally impaired elderly residents. However, data analysis also revealed a gap between the conceptual understanding and positive attitudes towards HP and its implementation in practice. Implementation of HP seems to occur in isolated cases, related to specific health issues. It seems that more complex HP approaches, especially the 'settings approach', are hardly practiced. To implement more comprehensive and systematic HP in Austrian RAC, support from external HP agencies as well as changes in financial incentives are needed.

Who gets a family physician through centralized waiting lists?

BackgroundNorth American patients are experiencing difficulties in securing affiliations with family physicians. Centralized waiting lists are increasingly being used in Organisation for Economic Co-operation and Development countries to improve access. In 2011, the Canadian province of Quebec introduced new financial incentives for family physicians’ enrolment of orphan patients through centralized waiting lists, the Guichet d’accès aux clientèles orphelines, with higher payments for vulnerable patients. This study analyzed whether any significant changes were observed in the numbers of patient enrolments with family physicians’ after the introduction of the new financial incentives. Prior to then, financial incentives had been offered for enrolment of vulnerable patients only and there were no incentives for enrolling non-vulnerable patients. After 2011, financial incentives were also offered for enrolment of non-vulnerable patients, while those for enrolment of vulnerable patients were doubled.MethodsA longitudinal quantitative analysis spanning a five-year period (2008–2013) was performed using administrative databases covering all patients enrolled with family physicians through centralized waiting lists in the province of Quebec (n = 494,697 patients). Mixed regression models for repeated-measures were used.ResultsThe number of patients enrolled with a family physician through centralized waiting lists more than quadrupled after the changes in financial incentives. Most of this increase involved non-vulnerable patients. After the changes, 70% of patients enrolled with a family physician through centralized waiting lists were non-vulnerable patients, most of whom had been referred to the centralized waiting lists by the physician who enrolled them, without first being registered in those lists or having to wait because of their priority level.ConclusionCentralized waiting lists linked to financial incentives increased the number of family physicians’ patient enrolments. However, although vulnerable patients were supposed to be given precedence, physicians favoured enrolment of healthier patients over those with greater health needs and higher assessed priority. These results suggest that introducing financial incentives without appropriate regulations may lead to opportunistic use of the incentive system with unintended policy consequences.

National Agenda for Prevention of Healthcare‐Associated Infections in Dialysis Centers

Healthcare-associated infections (HAIs) are among the leading causes of morbidity and mortality in dialysis patients. To coordinate HAI prevention efforts, the U.S. Department of Health and Human Services established the National Action Plan to Prevent Healthcare Associated Infections in End-Stage Renal Disease Facilities. This comprehensive plan prioritizes HAI prevention practices and 5-year evaluation targets based on the burden of disease, level of scientific evidence, and anticipated impact from the recommended intervention. As such, the Plan focuses primarily on interventions to reduce vascular access-related complications and infections with hepatitis B and hepatitis C virus. Over the last decade, there have been several efforts to expand HAI surveillance and prevention efforts, including coordination of HAI reporting metrics across multiple national agencies, changes in financial incentives by the Centers for Medicare & Medicaid Services (CMS), and federal funding for expansion of state-based HAI prevention programs. As a result, a paradigm shift in HAI prevention has developed. Public health officials have assumed greater responsibility in reducing the burden of HAIs and healthcare providers have become more involved in HAI prevention. Since the Plan was initially drafted, several collaborative efforts in dialysis facilities have reported a reduction in HAIs through implementation of these interventions. These early successes highlight the potential impact of coordinated action to combat HAIs in dialysis settings and this National Action Plan provides evidence-based strategies on how best to achieve this.

Impact of remuneration on guideline adherence: Empirical evidence in general practice

Background and objective. Changes in the Dutch GP remuneration system provided the opportunity to study the effects of changes in financial incentives on the quality of care. Separate remuneration systems for publicly insured patients (capitation) and privately insured patients (fee-for-service) were replaced by a combined system of capitation and fee-for-service for all in 2006. The effects of these changes on the quality of care in terms of guideline adherence were investigated. Design and setting. A longitudinal study from 2002 to 2009 using data from patient electronic medical records in general practice. A multilevel (patient and practice) approach was applied to study the effect of changes in the remuneration system on guideline adherence. Subjects. 21 421 to 39 828 patients from 32 to 52 general practices (dynamic panel of GPs). Main outcome measures. Sixteen guideline adherence indicators on prescriptions and referrals for acute and chronic conditions. Results. Guideline adherence increased between 2002 and 2008 by 7% for (formerly) publicly insured patients and 10% for (formerly) privately insured patients. In general, no significant differences in the trends for guideline adherence were found between privately and publicly insured patients, indicating the absence of an effect of the remuneration system on guideline adherence. Adherence to guidelines involving more time investment in terms of follow-up contacts was affected by changes in the remuneration system. For publicly insured patients, GPs showed a higher trend for guideline adherence for guidelines involving more time investment in terms of follow-up contacts compared with privately insured patients. Conclusion. The change in the remuneration system had a limited impact on guideline adherence.