Aligning Incentives, Information, and Choice: How to Optimize Health and Human Capital Performance

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Health as Human Capital Fou, 2009 - Business & Economics - 232 pages
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Why would someone intentionally gain forty pounds in four months? Why are over thirty percent of doctor visits for reasons that the American Medical Association recommends against? Why would the size of someone's bonus pay affect his or her interest in health? Incentives, that's why. Incentives are imbedded into the rules and structures of our social systems, businesses, communities, and healthcare programs. Similar to the force of gravity, incentives pull behaviours in a particular direction. Maybe you don't pay attention to incentives now-after reading this, we think you will.
 

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o Hat’s off. Well done, as we know that “hard work always pays off”,
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Contents

A Different Paradigm
1
Figure 11 Human Capital defined
3
Figure 12 Lifestyle nowand cumulative limitations 25 to 30 years later
7
Some Things Worth Knowing about Healthcare
27
Chapter 2 Some Things Worth Knowing about Healthcare
29
Figure 21 Quintiles of annual health costs
34
Figure 22 How likelihood of higher costs influences average costs
36
Figure 23 Fouryear transition analysis
37
Figure 44 Impact of changes in healthcare coinsurance on cost migration to workers compensation
116
Figure 45 Correlates of change in long term disability rates
119
Figure 46 Changes in life expectancy and eligibility for full Social Security benefits
126
Figure 51 Percent of members hospitalized by type of plan
137
Figure 52 Why are they getting more tests?
140
Figure 53 Financial incentives in healthcare
143
Figure 54 Likelihood of annual physicals by copayment
149
Figure 55 Selection and participation rates in disease management programs
151

Figure 24 Percent having zero one or more phone contacts in a disease management program
40
Figure 25 Musculoskeletal cost trends by level of involvement in disease management
41
Figure 26 Percent of people in quintiles of cost
42
Figure 27 Percent of people and direction of change in costs from 2003 to 2004
43
Figure 29 Percent of diabetic people in quintiles of cost
44
Figure 210 Percent of diabetic people changing costs as a percent of 2003
45
Figure 211 Likelihood of high costs across a population
47
Figure 212 Likelihood of repeat high costs
48
Figure 213 Where are healthcare dollars spent?
56
Figure 214 Where are healthcare dollars spent? And by whom?
57
Figure 215 Medication adherence and cost outcomes
61
Figure 216 How adherence connects to future costs
62
What Economists Already Know
69
Figure 31 Healthcare utilization by level of coinsurance
77
Figure 32 Disability events in nonexempt employees by income replacement in different age and gender groups
78
Figure 33 Salary reimbursement levels affect duration of disability claims
81
Figure 34 Average annual number of sick days using sickness insurance per worker in Sweden
86
Figure 35 Claimant rates for specific procedures before and after the implementation of a health reimbursement account
89
Figure 36 Percent of age groups having medical costs below and above 1000
91
Figure 37 Percent of age groups having fewer or more than five days of illness absence
92
effects of plan versus effects of type of people
93
Figure 39 Healthcare cost during the 12 months after reaching deductible
99
Figure 310 Percent of doctors considering patient costs in their recommendations
103
Figure 311 Percent of doctors considering patient costs in their recommendations by patient income
105
Figure 312 Percent of doctors considering patient costs in their recommendations by HMO or solo practice
106
Figure 41 The benefits versus wages tradeoff
109
Figure 42 Decline in wages compared to benefits
112
Figure 56 Highcost intervention was not better at preventing serious outcomes
155
Figure 61 Medical costs and worker transition
161
Figure 62 Time off and worker transition
162
Figure 63 What makes health important?
165
Figure 64 What makes health more important? Clear guidelines about bonuses
166
Figure 65 Percent having a shorttermdisability claim by annual salary
168
Figure 66 Plan switching in anticipation of maternity costs
170
Figure 67 Odds ratios for choosing a highdeductible health plan by number of dependent children
171
Figure 68 Odds ratios for choosing a highdeductible health plan by salary group
172
Figure 69 Relative odds of new employees vs existing employees choosing a highdeductible health plan by age group
174
Figure 71 Variation in average procedure price
190
Figure 72 Variation in quality metrics
191
Figure 73 Rate of illness by deductible amount
193
Figure 74 Services sought per person by deductible amount
196
Figure 75 Average price of service by deductible amount
197
Figure 76 Likelihood of an adverse medical event by number of medications
200
Figure 81 A sample distribution of illness absences
206
Figure 82 A sample illustration of total compensation
207
Figure 83 What interferes with productivity? Personal health problems
209
Figure 84 What interferes with productivity? Low motivation
210
Figure 85 Effectiveness of absence control programs 2006 ratings
213
Figure 86 HSAs vs HRAs vs highdeductible PPOs
214
Figure 87 Job performance distribution
217
Figure 88 Job performance and voluntary turnover
218
Figure 89 Effects of promotions on turnover
220
Figure 810 Mitigating turnover with salary growth
221
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