Large Financial Incentives Research Articles

The demand for skills training among Medicaid home-based caregivers

Medicaid spends nearly 100 billion dollars annually on home and community-based care for the disabled. Much of this care is provided by personal care aides, few of whom have received training related to the services they provide. We conducted a randomized controlled trial to estimate their demand for training. We find that 13 percent of these caregivers complete training without an incentive. Paying the caregivers four times their hourly wage increases training completion by roughly nine percentage points. Additional experimental variation suggests that among individuals confirmed to be aware of the training, the financial incentive increases completion from 35 to 58 percent. Demand curves based on these results suggest that while many caregivers value the opportunity to train, policies aimed at universal take up require large financial incentives.

Effects of large financial incentives on motivation to quit smoking and on cigarette dependence

BackgroundFinancial incentives enhance long-term smoking cessation rates, but their effects on motivation to quit in those who fail to quit are not well documented. AimTo test the effects of large financial incentives on motivation to quit smoking and on cigarette dependence in smokers who failed to quit despite receiving incentives. ParticipantsLow-income smokers in the general population in Geneva, Switzerland, in 2011–2013. MethodsA randomised controlled trial with follow-up after three, six and 18 months. Participants were assigned to receive either booklets plus access to a smoking cessation website (control group, n = 404), or the same intervention plus financial incentives (intervention group, n = 401). Incremental financial rewards, to a maximum of CHF 1500 (USD 1650, GBP 1000), were offered for biochemically verified smoking abstinence. No in-person counselling, telephone counselling, or medications were provided. MeasurementsIntrinsic and extrinsic motivation to quit, intention to quit, cigarette dependence. FindingsIn smokers at 6-month follow-up, intrinsic motivation decreased in the control group (-0.24 SD units, p < 0.001), extrinsic motivation increased in the intervention group (+0.35 SD units, p = 0.001), and twice as many participants in the intervention group (35 %) than in the control group (17 %, p < 0.001) said they intended to quit smoking in the next 30 days. Quit attempts were more frequent and their duration was longer in the intervention group than in the control group. The intervention had no impact on cigarette dependence scores. ConclusionsLarge financial incentives increased motivation to quit smoking in smokers who failed to quit smoking despite receiving incentives.

Association of Large Financial Incentives With COVID-19 Vaccination Uptake Among Employees of a Large Private Company

Association of Large Financial Incentives With COVID-19 Vaccination Uptake Among Employees of a Large Private Company

The Impact of Large Financial Incentives on C-Section Rates: Evidence from Iran

The Impact of Large Financial Incentives on C-Section Rates: Evidence from Iran

Performance-based incentives and community health workers' outputs, a systematic review.

ObjectiveTo review the evidence on the impact on measurable outcomes of performance-based incentives for community health workers (CHWs) in low- and middle-income countries.MethodsWe conducted a systematic review of intervention studies published before November 2020 that evaluated the impact of financial and non-financial performance-based incentives for CHWs. Outcomes included patient health indicators; quality, utilization or delivery of health-care services; and CHW motivation or satisfaction. We assessed risk of bias for all included studies using the Cochrane tool. We based our narrative synthesis on a framework for measuring the performance of CHW programmes, comprising inputs, processes, performance outputs and health outcomes.FindingsTwo reviewers screened 2811 records; we included 12 studies, 11 of which were randomized controlled trials and one a non-randomized trial. We found that non-financial, publicly displayed recognition of CHWs’ efforts was effective in improved service delivery outcomes. While large financial incentives were more effective than small ones in bringing about improved performance, they often resulted in the reallocation of effort away from other, non-incentivized tasks. We found no studies that tested a combined package of financial and non-financial incentives. The rationale for the design of performance-based incentives or explanation of how incentives interacted with contextual factors were rarely reported.ConclusionFinancial performance-based incentives alone can improve CHW service delivery outcomes, but at the risk of unincentivized tasks being neglected. As calls to professionalize CHW programmes gain momentum, research that explores the interactions among different forms of incentives, context and sustainability is needed.

Paying Americans to take the vaccine-would it help or backfire?

ABSTRACTThis research investigates the extent to which financial incentives (conditional cash transfers) would induce Americans to opt for vaccination against coronavirus disease of 2019. We performed a randomized survey experiment with a representative sample of 1000 American adults in December 2020. Respondents were asked whether they would opt for vaccination under one of three incentive conditions ($1000, $1500, or $2000 financial incentive) or a no-incentive condition. We find that—without coupled financial incentives—only 58 per cent of survey respondents would elect for vaccination. A coupled financial incentive yields an 8-percentage-point increase in vaccine uptake relative to this baseline. The size of the cash transfer does not dramatically affect uptake rates. However, incentive responses differ dramatically by demographic group. Republicans were less responsive to financial incentives than the general population. For Black and Latino Americans especially, very large financial incentives may be counter-productive.

Paying People to Take the Vaccine - Would it Help or Backfire?

This research investigates the extent to which financial incentives (conditional cash transfers) would induce Americans to opt for vaccination against COVID-19. We performed a randomized survey experiment with a representative sample of 1,000 American adults in December 2020. Respondents were asked whether they would opt for vaccination under one of three incentive conditions ($1,000, $1,500, or $2,000 financial incentive) or a no-incentive condition. We find that—without coupled financial incentives—only 58% of survey respondents would elect for vaccination. A coupled financial incentive yields an 8-percentage-point increase in vaccine uptake relative to this baseline. The size of the cash transfer does not dramatically affect uptake rates. However, incentive responses differ dramatically by demographic group. Republicans were less responsive to financial incentives than the general population. For Black and Latino Americans especially, very large financial incentives may be counter-productive.

The strange case of less C-sections: Hospital ownership, market concentration, and DRG-tariff regulation.

We evaluate the relationship between hospital ownership and responses to a policy providing large financial incentives for vaginal deliveries and financial disincentives for C-sections. We compare for-profit, nonprofit, and public hospitals operating in a public health care system organized according to the quasi-market model. We first theoretically show that hospital ownership matters insofar different hospitals are characterized by different ethical preferences. We also show that competition makes ownership less important. We then consider the case study of Lombardy in Italy. We exploit spatial variation in hospital ownership and in market concentration at the local level to evaluate the relationship between ownership and the probability of C-section. According to theory, empirical results strongly suggest that competitive pressures from alternative providers tend to homogenize behaviors. However, in local monopolies, in presence of a strong monetary incentive toward vaginal deliveries, we do observe less C-section from private for-profit hospitals than from public and private nonprofit hospitals, especially when C-sections are medically appropriate.

When Nudges Fail to Scale: Field Experimental Evidence from Goal Setting on Mobile Phones

Non-pecuniary incentives motivated by insights from psychology (“nudges”) have been shown to be effective tools to change behavior in a variety of fields. An often unanswered question relevant for public policy is whether these promising interventions can be scaled up. In cooperation with a large public utility in Germany, we develop an energy savings application for mobile phones that can be used by the majority of the population. The app randomizes a goal-setting nudge prompting users to set themselves energy consumption targets. The roll-out of the app is promoted by a mass-marketing campaign and large financial incentives. Results document low demand for the energy app in the general population and a tightly estimated null effect of the nudge on electricity consumption among app users. A likely mechanism of the null effect is unfavorable self-selection into the app: users are characterized by an already low baseline energy consumption and exhibit none of the behavioral biases that typically explain why goal setting affects behavior. We also find that the nudge significantly decreases the likelihood to use the app over time. Structural estimates imply that the average user is willing to pay 7.41 EUR to avoid the nudge and the intervention would yield substantial welfare losses if implemented nationwide.

When Nudges Fail to Scale: Field Experimental Evidence from Goal Setting on Mobile Phones

Non-pecuniary incentives motivated by insights from psychology (“nudges”) have been shown to be effective tools to change behavior in a variety of fields. An often unanswered question relevant for public policy is whether these promising interventions can be scaled up. In cooperation with a large public utility in Germany, we develop an energy savings application for mobile phones that can be used by the majority of the population. The app randomizes a goal-setting nudge prompting users to set themselves energy consumption targets. The roll-out of the app is promoted by a mass-marketing campaign and large financial incentives. Results document low demand for the energy app in the general population and a tightly estimated null effect of the nudge on electricity consumption among app users. A likely mechanism of the null effect is unfavorable self-selection into the app: users are characterized by an already low baseline energy consumption and exhibit none of the behavioral biases that typically explain why goal setting affects behavior. We also find that the nudge significantly decreases the likelihood to use the app over time. Structural estimates imply that the average user is willing to pay 7.41 EUR to avoid the nudge and the intervention would yield substantial welfare losses if implemented nationwide.

Expectations and Incentives: Parental Financial Support for College During the Transition to Young Adulthood

This study provides new insight into enrollment disparities by examining how the financial support adolescents expect to receive from parents as they transition to young adulthood differs by parent and family characteristics and whether they attend college. I do this by estimating expectations of cash and in-kind co-residency support in the year after high school completion using data from the National Longitudinal Survey of Youth. The results indicate that children whose parents are highly educated, who have high solidarity with their parents, and whose parents hold norms of adolescent financial dependency have particularly large financial incentives to attend college—particularly a four-year college—due to the amount and type of financial support they can expect from parents. This study suggests that policymakers and practitioners who wish to reduce socioeconomic disparities in college access should look more closely at how financial aid policies interact with the actual support parents provide their children.

Provider Incentives and Healthcare Costs: Evidence from Long-Term Care Hospitals.

We study the design of provider incentives in the post-acute care setting - a high-stakes but under-studied segment of the healthcare system. We focus on long-term care hospitals (LTCHs) and the large (approximately $13,500) jump in Medicare payments they receive when a patient s stay reaches a threshold number of days. Discharges increase substantially after the threshold, with the marginal discharged patient in relatively better health. Despite the large financial incentives and behavioral response in a high mortality population, we are unable to detect any compelling evidence of an impact on patient mortality. To assess provider behavior under counterfactual payment schedules, we estimate a simple dynamic discrete choice model of LTCH discharge decisions. When we conservatively limit ourselves to alternative contracts that hold the LTCH harmless, we find that an alternative contract can generate Medicare savings of about $2,100 per admission, or about 5% of total payments. More aggressive payment reforms can generate substantially greater savings, but the accompanying reduction in LTCH profits has potential out-of-sample consequences. Our results highlight how improved financial incentives may be able to reduce healthcare spending, without negative consequences for industry profits or patient health.

New opportunities and the valuation of energy assets

When the Coalition Government came to power in 2010, it was very keen to support the emerging renewable energy market to reduce CO2 emissions to comply with world and European directives. To boost the market, large financial incentives were introduced. These have virtually disappeared, but there are now a large number of energy assets that require specialist valuation work. A new ‘smart’ grid system is being introduced, replacing the old coal and nuclear power stations with a rapidly emerging market in energy storage, using battery and short term operating reserve (STOR) technology. This can supply power into the grid in a fraction of a second and ideally complement the intermittent power from renewable projects.

Effect of Patient Navigation and Financial Incentives on Smoking Cessation Among Primary Care Patients at an Urban Safety-Net Hospital

ImportanceWhile the proportion of adults who smoke cigarettes has declined substantially in the past decade, socioeconomic disparities in cigarette smoking remain. Few interventions have targeted low socioeconomic status (SES) and minority smokers in primary care settings.ObjectiveTo evaluate a multicomponent intervention to promote smoking cessation among low-SES and minority smokers.Design, Setting, and ParticipantsFor this prospective, unblinded, randomized clinical trial conducted between May 1, 2015, and September 4, 2017, adults 18 years and older who spoke English, smoked 10 or more cigarettes per day in the past week, were contemplating or preparing to quit smoking, and had a primary care clinician were recruited from general internal medicine and family medicine practices at 1 large safety-net hospital in Boston, Massachusetts.InterventionsPatients were randomized to a control group that received an enhancement of usual care (n = 175 participants) or to an intervention group that received up to 4 hours of patient navigation delivered over 6 months in addition to usual care, as well as financial incentives for biochemically confirmed smoking cessation at 6 and 12 months following enrollment (n = 177 participants).Main Outcomes and MeasuresThe primary outcome determined a priori was biochemically confirmed smoking cessation at 12 months.ResultsAmong 352 patients who were randomized (mean [SD] age, 50.0 [11.0] years; 191 women [54.3%]; 197 participants who identified as non–Hispanic black [56.0%]; 40 participants who identified as Hispanic of any race [11.4%]), all were included in the intention-to-treat analysis. At 12 months following enrollment, 21 participants [11.9%] in the navigation and incentives group, compared with 4 participants [2.3%] in the control group, had quit smoking (odds ratio, 5.8; 95% CI, 1.9-17.1; number needed to treat, 10.4; P < .001). In prespecified subgroup analyses, the intervention was particularly beneficial for older participants (19 [19.8%] vs 1 [1.0%]; P < .001), women (17 [16.8%] vs 2 [2.2%]; P < .001), participants with household yearly income of $20 000 or less (15 [15.5%] vs 3 [3.1%]; P = .003), and nonwhite participants (21 [15.2%] vs 4 [3.0%]; P < .001).Conclusions and RelevanceIn this study of adult daily smokers at 1 large urban safety-net hospital, patient navigation and financial incentives for smoking cessation significantly increased the rates of smoking cessation.Trial Registrationclinicaltrials.gov Identifier: NCT02351609

The Kansas PEAK 2.0 Program Facilitates the Diffusion of Culture-Change Innovation to Unlikely Adopters

Recent studies have shown that nursing homes adopting culture change are disproportionately not-for-profit and CCRC-affiliated, with greater quality of care. Through the lens of diffusion-of-innovation theory, we examined whether Kansas' Medicaid pay-for-performance program PEAK 2.0, which incents the adoption of person-centered care (PCC) and worker empowerment, succeeded in its goal of spreading adoption to atypical- as well as typical-adopting nursing homes. We conducted a retrospective cohort study of 349 nursing homes in the state during PEAK 2.0's existence, 2012-2016. We constructed a data set combining state program data, provider characteristics from CMS data sets, and other demographic information from the 2010 Census. With a series of logistic regression models, we tested whether program joiners differed from nonjoiners by profit status and other demographic factors, as well as quality-related and case-mix factors. We found that in PEAK 2.0's first year, 2012, adopters were more likely to be not-for-profit and part of a CCRC, with higher occupancy rates and greater quality. However, by 2013 these associations became marginal, and in 2014 and 2015, we found no differences between program joiners and nonjoiners. The results show that by PEAK 2.0's third year, the program-with its large financial incentive and other potentially important characteristics-succeeded in attracting a large set of nursing homes whose demographics were representative of those in the state. This is important because other studies have found that the adoption of PCC is associated with improved health and well-being for residents.

Provider Incentives and Healthcare Costs: Evidence from Long-Term Care Hospitals

We study the design of provider incentives in the post-acute care setting – a high-stakes but under-studied segment of the healthcare system. We focus on long-term care hospitals (LTCHs) and the large (approximately $13,000) jump in Medicare payments they receive when a patient's stay reaches a threshold number of days. The descriptive evidence indicates that discharges increase substantially after the threshold, and that the marginal patient discharged after the threshold is in relatively better health. Despite the large financial incentives and behavioral response in a high mortality population, we are unable to detect any compelling evidence of an impact on patient mortality. To assess provider behavior under counterfactual payment schedules, we estimate a simple dynamic discrete choice model of LTCH discharge decisions. When we conservatively limit ourselves to alternative contracts that hold the LTCH harmless, we find that an alternative contract can generate Medicare savings of about $2,100 per admission, or about 5% of total payments. More aggressive payment reforms can generate substantially greater savings, but the accompanying reduction in LTCH profits has potential out-of-sample consequences. Our results highlight how improved financial incentives may be able to reduce healthcare spending, without negative consequences for industry profits or patient health.

Effects of Large Financial Incentives for Long-Term Smoking Cessation: A Randomized Trial

BackgroundIt is not known whether large financial incentives enhance long-term smoking cessation rates outside clinical or workplace settings. ObjectivesThe goal of this study was to test whether large financial incentives improved long-term smoking cessation rates in low-income smokers, in a general population setting, without face-to-face or telephone counseling. MethodsThis was a 2-arm, parallel group, individually randomized controlled trial, with follow-up after 3, 6, and 18 months. Participants were 805 low-income smokers enrolled between 2011 and 2013 from the general population in Geneva, Switzerland. We randomly assigned participants to receive either booklets plus access to a smoking cessation website (control group, n = 404), or the same intervention plus financial incentives (intervention group, n = 401). Incremental financial rewards, to a maximum of U.S. $1,650, were offered for biochemically verified abstinence at 1, 2, and 3 weeks, and 1, 3, and 6 months. No in-person counseling, telephone counseling, or medications were provided. The primary outcome was continuous abstinence between 6 months (end of incentives) and 18 months (12 months after the incentives ended), verified by expired carbon monoxide and salivary cotinine. We also assessed biochemically verified 7-day abstinence at 3, 6, and 18 months. ResultsRates of continuous abstinence between months 6 and 18 were 9.5% in the incentive group and 3.7% in the control group (p = 0.001). Rates of 7-day abstinence were higher in the incentive group than in the control group at 3 (54.9% vs. 11.9%; p < 0.001), 6 (44.6% vs. 11.1%; p < 0.001), and 18 months (18.2% vs. 11.4%; p = 0.006). ConclusionsIn low-income smokers who did not receive face-to-face or telephone smoking cessation counseling, large financial incentives increased long-term rates of smoking cessation. (Financial incentives for smoking cessation in low-income smokers; ISRCTN04019434).

Wind and Solar Power in Brazil and China: Interests, State–Business Relations, and Policy Outcomes

This article examines developments in the renewable electricity sector in Brazil and China since 2000. The two countries share many interests with respect to solar and wind power, but institutional differences in state–business relations led to different outcomes. In China, in a context of corporatist state–business relations, state interventions were more far-reaching, with the state coordinating with state-owned banks, offering large financial and investment incentives to state-owned or state-connected enterprises. By contrast, in Brazil’s public–private partnerships, state support to promote renewable energies was shaped by a stronger preference for competitive auctions and stricter financing rules. The differences in state–business relations help explain the observed developmental trajectories in wind and solar power.

Incentives, Selection, and Teacher Performance: Evidence from IMPACT

Teachers in the United States are compensated largely on the basis of fixed schedules that reward experience and credentials. However, there is a growing interest in whether performance-based incentives based on rigorous teacher evaluations can improve teacher retention and performance. The evidence available to date has been mixed at best. This study presents novel evidence on this topic based on IMPACT, the controversial teacher-evaluation system introduced in the District of Columbia Public Schools by then-Chancellor Michelle Rhee. IMPACT implemented uniquely high-powered incentives linked to multiple measures of teacher performance (i.e., several structured observational measures as well as test performance). We present regression-discontinuity (RD) estimates that compare the retention and performance outcomes among low-performing teachers whose ratings placed them near the threshold that implied a strong dismissal threat. We also compare outcomes among high-performing teachers whose rating placed them near a threshold that implied an unusually large financial incentive. Our RD results indicate that dismissal threats increased the voluntary attrition of low-performing teachers by 11 percentage points (i.e., more than 50 percent) and improved the performance of teachers who remained by 0.27 of a teacher-level standard deviation. We also find evidence that financial incentives further improved the performance of high-performing teachers (effect size = 0.24).

Out of control: Diminished prefrontal activity coincides with impaired motor performance due to choking under pressure

There are three non-exclusive theoretical explanations for the paradoxical collapse of performance due to large financial incentives. It has been proposed that “choking under pressure” is either due to distraction, interference via an increase in top-down control and performance monitoring, or excessive levels of arousal in the face of large losses. Given the known neural architecture involved in executive control and reward, we used fMRI of human participants during incentivized motor performance to provide evidence to support and/or reconcile these competing models in a visuomotor task. We show that the execution of a pre-trained motor task during neuroimaging is impaired by high rewards. BOLD activity occurring prior to movement onset is increased in dorsolateral prefrontal cortex and functional connectivity between this region and motor cortex is likewise increased just prior to choking. However, the extent of this increase in functional connectivity is inversely related to a participant's propensity to choke, suggesting that a failure in exerting top-down influence on motor control underlies choking under pressure due to large incentives. These results are consistent with a distraction account of choking and suggest that frontal influences on motor activity are necessary to protect performance from vulnerability under pressure.