AHRQ Releases Consumer Financial Incentives Guide for Employers and Other Health Care Purchasers

Press Release Date: January 15, 2008

The U.S. Department of Health and Human Services' (HHS) Agency for Healthcare Research and Quality (AHRQ) today announced a new guide to help employers, private health plans, the federal government, and state Medicaid agencies as they consider consumer financial incentives as part of an overarching strategy to improve the quality of health care and get better value for what they spend on services.

Consumer financial incentives are either a reward offered to influence patients to behave in a particular way, or, less often, a penalty for failing to do so. By using financial incentives, health care purchasers hope to encourage patients to take actions that either may improve the results of their treatment—such as selecting a high-quality physician, reducing or eliminating high-risk behaviors and using preventive services—or may reduce costs by eliminating unnecessary emergency room visits and decreasing preventable hospitalizations.

"Because health care spending is growing much faster than improvements in quality or patient safety, we must find ways to achieve better value for our health care dollars," said AHRQ Director Carolyn M. Clancy, M.D. "To help reach that goal, AHRQ is supporting a number of initiatives, including new resources for purchasers exploring the use of consumer financial incentives."

Using incentives to promote better value in health care is one of the four cornerstones of HHS' Value-Driven Care Initiative, which has a goal of providing consumers with the information necessary, and the incentive, to choose health care providers based on value.

The decision guide was developed by a team of researchers led by R. Adams Dudley, M.D., M.B.A., an associate professor with the Institute for Health Policy Studies at the University of California, San Francisco, in partnership with representatives of the purchaser and consumer communities.

Dr. Dudley said, "A number of strategies to improve quality—public report cards and provider incentives in addition to consumer financial incentives—all start with performance measurement. To the extent that measures are aligned across these strategies, they can reinforce each other."

The decision guide consists of an evidence summary organized around a series of 21 questions that purchasers need to consider when implementing consumer financial incentives. They span incentive design and implementation decisions. The guide reviews the application of incentives to five types of consumer decisions, including selecting a high-value provider, selecting a high-value health plan, deciding among treatment options, reducing health risks by seeking preventive care, and reducing health risks by decreasing or eliminating high-risk behavior.

In addition to a summary of the evidence base, the guide includes examples of consumer financial incentives currently being offered, criteria for selecting performance measures, elements to enable patients to participate in medical decisionmaking and in managing their chronic diseases, and characteristics that increase the likelihood that a consumer will respond to financial incentives.

Consumer Financial Incentives: A Decision Guide for Purchasers is available at http://www.ahrq.gov/qual/value/incentives.htm and its companion, Pay for Performance: A Decision Guide for Purchasers is available at http://www.ahrq.gov/qual/p4pguide.htm. Printed copies of both guides may be obtained by calling the AHRQ Publications Clearinghouse at (800) 358-9295 or sending an E-mail to ahrqpubs@ahrq.hhs.gov.

For more AHRQ information about pay for performance, go to http://www.ahrq.gov/qual/pay4per.htm.

More information on Value-Driven Health Care is available at http://www.hhs.gov/valuedriven.

For more information, please contact AHRQ Public Affairs: (301) 427-1539 or (301) 427-1245.

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Internet Citation:

AHRQ Releases Consumer Financial Incentives Guide for Employers and Other Health Care Purchasers. Press Release, January 15, 2008. Agency for Healthcare Research and Quality, Rockville, MD. http://www.ahrq.gov/news/press/pr2008/consfincpr.htm

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