Better health through financial incentives?

Arthritis, diabetes, Crohn’s disease, or asthma – chronic illnesses are among the most widespread and most economically significant health problems wealthy countries face. Many of the medications used for treating chronic illnesses are intended as long-term treatments and do not show immediate effects. For this reason, many patients have a tendency to let their illness go untreated – often with severe consequences. In a recent study, Marcel Bilger, health economist at WU, shows that small financial incentives can provide an inexpensive but nonetheless effective way of improving patients’ long-term health.

Poor adherence to medications for treating chronic illnesses is a global public health concern. It not only results in many unnecessary deaths and deteriorating illnesses but also causes considerable costs for public health systems. Experts estimate that in the US alone, poor or irregular adherence to medications causes 125,000 deaths and creates additional costs of US$100 billion. Recent studies indicate that even in rich countries, 50% of chronic illnesses go untreated. So far, efforts at increasing medication adherence – for example by lowering the cost of drugs – have only been moderately successful and relatively expensive. WU Professor Marcel Bilger, head of WU’s Health Economics and Policy Group, addressed this problem in an experimental study carried out together with researchers from Duke-NUS Medical School and the Singapore National Eye Center. The results show that rebates of as little as US$5.94 per month were effective in increasing the number of people who take their medication regularly and in the prescribed doses.

A novel incentive strategy

Leveraging insights from behavioral economics, Bilger and his team designed a new incentive strategy for their study, based on rebates that are conditional on the patients’ behavior. A total of 100 glaucoma patients participated in the study. Glaucoma refers to a group of eye diseases that result in irreversible damage to the optical nerve. Patients who take their medication regularly can slow down the progress of the disease and delay the onset of blindness. In many cases, however, patients don’t adhere to their medication because, despite the long-term benefits, they don’t see their symptoms improving in the short term. As part of the study, participants who took their medication as prescribed were rewarded with small rebates on treatment costs. The researchers found that adherence was significantly better in these patients as compared to the control group. After 6 months, the participants who received rebates on their treatment costs in reward for medication adherence took their medication as prescribed on 73.1% of all days – 12.2 percentage points more than in the control group.

A potentially cost-effective solution to improve health

As Marcel Bilger, lead author of the study, points out, “Untreated chronic illnesses are a significant problem globally – both for the people affected and for our public health systems. So far, efforts for making people adhere to their treatments more have not been very successful and have often proved to be very costly. The results of our study highlight a potential cost-effective way of achieving improvements. The short-term rewards granted to patients who adhere to their medication motivate them to continue the treatment. As a result, they stay healthier for longer.”

Bilger, M., Wong, T.T., Lee, J.Y. et al. Using Adherence-Contingent Rebates on Chronic Disease Treatment Costs to Promote Medication Adherence: Results from a Randomized Controlled Trial. Appl Health Econ Health Policy 17, 841–855 (2019).

The study