Over a decade ago, as a primary care physician with a Ph.D. in economics, Kevin Volpp, director of the Center for Health Incentives and Behavioral Economics (CHIBE) in the Perelman School of Medicine, noticed an interesting phenomenon in health care: across the board—from insurers, to providers, to patients—it had become normalized to spend great sums on health care services when a patient gets sick, but relatively little on keeping healthy patients healthy. For instance, there is a willingness to spare no expense when treating a heart attack or lung cancer, but less is invested on behaviors that increase risk for these conditions, like improving blood pressure or quitting smoking.
On a mission to understand this phenomenon and study ways to improve public health, Volpp founded CHIBE, which combines the clinical health expertise at Penn Medicine with the behavioral science and economic knowledge of faculty at Penn Medicine and Wharton to study how healthy behaviors can be rewarded and even encouraged.
Currently, as COVID-19 vaccines have become available to the general public and vaccination rates began to slow, there has been a boom in incentives for receiving the vaccine across the United States. States and businesses alike are rolling out rewards for people who provide proof of vaccination—from donuts, to beer, to guns, to Philadelphia’s own lottery for a chance to win up to $50,000.
“The data is still out on how effective each various incentive is, but any nonmonetary incentive appeals to some people but not others. For instance, if I don’t drink beer or like baseball, those things will not motivate me,” says Volpp.
“Monetary incentives have universal appeal, and for that reason they typically will work better,” he says. “The high stakes lotteries in places like Philadelphia and Ohio have gotten people’s attention since winning one of the big prizes ($50,000 or $1 million, respectively) have the chance to make a huge impact on someone’s life.”
Volpp sees the benefit of incentivizing healthy behaviors beyond the realm of public health. “Getting vaccinated against a deadly virus creates “positive externality” for other people, meaning that the act of being vaccinated benefits others besides oneself,” he says. “In a free market, people typically focus on how their decisions affects their own wellbeing; because of the positive externalities to having more people vaccinated, there is a compelling argument for the government to subsidize public health.”
This story is by Kelsey Odorczyk. Read more at Penn Medicine News.
