Cost-effectiveness of incentives for physical activity in coronary heart disease in Germany: pre-trial health economic model of a complex intervention following the new MRC framework.

Objectives: The German Incentives for Physical Activity in Cardiac Patients trial is a three-arm, randomised controlled trial for secondary prevention of coronary heart disease (CHD). Guidance for developing complex interventions recommends pre-trial health economic modelling. The aim of this study is to model the long-term cost-effectiveness of the incentive-based physical activity interventions in a population with CHD. Methods: A decision-analytical Markov model was developed from a health services provider perspective, following a cohort aged 65 years with a previous myocardial infarction for 25 years. Monetary and social incentives were compared relative to no incentive. Intervention effects associated with physical activity were used to determine the costs, quality-adjusted life-years (QALYs) gained, incremental cost-effectiveness and cost-utility ratios. The probability of cost-effectiveness was calculated through sensitivity analyses. Results: The incremental QALYs gained from the monetary and social incentives, relative to control, were respectively estimated at 0.01 (95% CI 0.00 to 0.01) and 0.04 (95% CI 0.02 to 0.05). Implementation of the monetary and social incentive interventions increased the costs by €874 (95% CI €744 to €1047) and €909 (95% CI €537 to €1625). Incremental cost-utility ratios were €25 912 (95% CI €15 056 to €50 210) and €118 958 (95% CI €82 930 to €196 121) per QALY gained for the social and monetary incentive intervention, respectively. With a willingness-to-pay threshold set at €43 000/QALY, equivalent to the per-capita gross domestic product in Germany, the probability that the social and monetary incentive intervention would be seen as cost-effective was 95% and 0%, respectively. Conclusions: Exercise-based secondary prevention using inventive schemes may offer a cost-effective strategy to reduce the burden of CHD.

Risk and time preferences in individuals with lifestyle-related and non-lifestyle-related cardiovascular diseases: a pilot study.

OBJECTIVES: To (1) pilot a study of behavioural characterisation based on risk and time preferences in clinically well-characterised individuals, (2) assess the distribution of preferences in this population and (3) explore differences in preferences between individuals with 'lifestyle-related' (LS) and 'non-lifestyle-related' (NLS) cardiovascular diseases. DESIGN: Cross-sectional study with an economic online experiment to collect risk and time preferences, a detailed clinical characterisation and a sociodemographic and lifestyle survey. A definition of LS and NLS groups was developed. SETTING: Specialist outpatient clinics of the clinic for cardiology and pneumology of the University Hospital Düsseldorf and patients from a cardiology practice in Düsseldorf. PARTICIPANTS: A total of 74 individuals with cardiovascular diseases. OUTCOMES: Risk and time preferences. RESULTS: The implementation of the study process, including participant recruitment and data collection, ran smoothly. The medical checklist, the survey and the time preference instrument were well received. However, the conceptual understanding of the risk preference instrument resulted in inconsistent choices for many participants (47%). The remaining individuals were more risk averse (27%) than risk seeking (16%) and risk neutral (10%). Individuals in our sample were also more impatient (49%) than patient (42%). The participant classification showed that 65% belonged to the LS group, 19% to the NLS group and 16% could not be assigned (unclear allocation to lifestyle (ULS) group). Excluding the ULS group, we show that individuals in the LS group were more risk seeking, and unexpectedly, more patient than those in the NLS group. CONCLUSIONS: The process of the pilot study and its results can be used as a basis for the design of the main study. The differences in risk and time preferences between the LS and NLS groups provide us with a novel hypothesis for unhealthy behaviours: individuals never give up a bad habit, they simply postpone the latter, which can be tested alongside other additional research questions.

Strategic behaviour and decision making in competitive hospital markets: an experimental investigation.

We investigate quality provision and the occurrence of strategic behaviour in competitive hospital markets where providers are assumed to be semi-altruistic towards patients. For this, we employ a laboratory experiment with a hospital market framing. Subjects decide on the quality levels for one of three competing hospitals respectively. We vary the organizational aspect of whether quality decisions within hospitals are made by individuals or teams. Realized monetary patient benefits go to real patients outside the lab. In both settings, we find that degrees of cooperation quickly converge towards negative values, implying absence of collusion and patient centred or competitive quality choices. Moreover, hospitals treat quality as a strategic complement and adjust their quality choice in the same direction as their competitors. The response magnitude for team markets is weaker; this is driven by non-cooperative or altruistic teams, which tend to set levels of quality that are strategically independent.

A new look at physicians' responses to financial incentives: Quality of care, practice characteristics, and motivations.

There is considerable controversy about what causes (in)effectiveness of physician performance pay in improving the quality of care. Using a behavioral experiment with German primary-care physicians, we study the incentive effect of performance pay on service provision and quality of care. To explore whether variations in quality are based on the incentive scheme and the interplay with physicians' real-world profit orientation and patient-regarding motivations, we link administrative data on practice characteristics and survey data on physicians' attitudes with experimental data. We find that, under performance pay, quality increases by about 7pp compared to baseline capitation. While the effect increases with the severity of illness, the bonus level does not significantly affect the quality of care. Data linkage indicates that primary-care physicians in high-profit practices provide a lower quality of care. Physicians' other-regarding motivations and attitudes are significant drivers of high treatment quality.

Performance Pay in Hospitals: An Experiment on Bonus-Malus Incentives.

Recent policy reforms in Germany require the introduction of a performance pay component with bonus-malus incentives in the inpatient care sector. We conduct a controlled online experiment with real hospital physicians from public hospitals and medical students in Germany, in which we investigate the effects of introducing a performance pay component with bonus-malus incentives to a simplified version of the German Diagnosis Related Groups (DRG) system using a sequential design with stylized routine cases. In both parts, participants choose between the patient optimal and profit maximizing treatment option for the same eight stylized routine cases. We find that the introduction of bonus-malus incentives only statistically significantly increases hospital physicians' proportion of patient optimal choices for cases with high monetary baseline DRG incentives to choose the profit maximizing option. Medical students behave qualitatively similar. However, they are statistically significantly less patient oriented than real hospital physicians, and statistically significantly increase their patient optimal decisions with the introduction of bonus-malus incentives in all stylized routine cases. Overall, our results indicate that whether the introduction of a performance pay component with bonus-malus incentives to the (German) DRG system has a positive effect on the quality of care or not particularly depends on the monetary incentives implemented in the DRG system as well as the type of participants and their initial level of patient orientation.

Sorting into payment schemes and medical treatment: A laboratory experiment.

In this study, we introduce the opportunity for physicians to sort into capitation or fee-for-service payment. Using a controlled medically framed laboratory experiment with a sequential within-subject design allows isolating sorting from incentive effects. We observe a strong preference for fee-for-service payment, which does not depend on subjects' prior experience with one of the two payment schemes. Further, we identify a significant sorting effect. Subjects choosing capitation deviate ex ante less from patient-optimal medical treatment than subjects who sort into fee-for-service payment. Particularly the latter become even less patient-oriented after introducing the choice option. Consequently, the opportunity to choose between fee-for-service and capitation payment worsens patient treatment, if at all. Our results hold for medical and for nonmedical students.

Quality competition and hospital mergers-An experiment.

On the basis of a Salop model with regulated prices, we investigate quality provision behaviour of competing hospitals before and after a merger. For this, we use a controlled laboratory experiment where subjects decided on the level of treatment quality as head of a hospital. We find that the post-merger average quality is significantly lower than the average pre-merger quality. However, for merger insiders and outsiders, average quality choices are significantly higher than predicted for pure profit-maximising hospitals. This upward deviation is potentially driven by altruistic behaviour towards patients. Furthermore, we find that in the case where sufficient cost synergies are realised by the merged hospitals, there is a significant increase in average quality choices compared to the scenario without synergies. Finally, we find that our results do not change when comparing individual decisions to team decisions.

The Effects of Introducing Mixed Payment Systems for Physicians: Experimental Evidence.

Mixed payment systems have become a prominent alternative to paying physicians through fee-for-service and capitation. While theory shows mixed payment systems to be superior, causal effects on physicians' behavior when introducing mixed systems are not well understood empirically. We systematically analyze the influence of fee-for-service, capitation, and mixed payment systems on physicians' service provision. In a controlled laboratory setting, we implement an exogenous variation of the payment method. Medical and non-medical students in the role of physicians in the lab (N = 213) choose quantities of medical services affecting patients' health outside the lab. Behavioral data reveal significant overprovision of medical services under fee-for-service and significant underprovision under capitation, although less than predicted when assuming profit maximization. Introducing mixed payment systems significantly reduces deviations from patient-optimal treatment. Although medical students tend to be more patient regarding, our results hold for both medical and non-medical students. Responses to incentive systems can be explained by a behavioral model capturing individual altruism. In particular, we find support that altruism plays a role in service provision and can partially mitigate agency problems, but altruism is heterogeneous in the population. Copyright © 2015 John Wiley & Sons, Ltd.