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The impact of financial incentives on health and health care: Evidence from a large wellness program

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  • Liran Einav
  • Stephanie Lee
  • Jonathan Levin

Abstract

Workplace wellness programs have become increasingly common in the United States, although there is not yet consensus regarding the ability of such programs to improve employees' health and reduce health care costs. In this paper, we study a program offered by a large U.S. employer that provides substantial financial incentives directly tied to employees' health. The program has a high participation rate among eligible employees, around 80%, and we analyze the data on the first 4 years of the program, linked to health care claims. We document robust improvements in employee health and a correlation between certain health improvements and reductions in health care cost. Despite the latter association, we cannot find direct evidence causally linking program participation to reduced health care costs, although it seems plausible that such a relationship will arise over longer horizons.

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  • Liran Einav & Stephanie Lee & Jonathan Levin, 2019. "The impact of financial incentives on health and health care: Evidence from a large wellness program," Health Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 261-279, February.
    • Handle: RePEc:wly:hlthec:v:28:y:2019:i:2:p:261-279
    DOI: 10.1002/hec.3840
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    1. Wee, C.C. & Phillips, R.S. & Legedza, A.T.R. & Davis, R.B. & Soukup, J.R. & Colditz, G.A. & Hamel, M.B., 2005. "Health care expenditures associated with overweight and obesity among us adults: Importance of age and race," American Journal of Public Health, American Public Health Association, vol. 95(1), pages 159-165.
    2. Baicker, Katherine & Cutler, David M. & Song, Zirui, 2010. "Workplace Wellness Programs Can Generate Savings," Scholarly Articles 5345879, Harvard University Department of Economics.
    3. Gary Charness & Uri Gneezy, 2009. "Incentives to Exercise," Econometrica, Econometric Society, vol. 77(3), pages 909-931, May.
    4. Damon Jones & David Molitor & Julian Reif, 2019. "What do Workplace Wellness Programs do? Evidence from the Illinois Workplace Wellness Study," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(4), pages 1747-1791.
    5. Cawley, John & Price, Joshua A., 2013. "A case study of a workplace wellness program that offers financial incentives for weight loss," Journal of Health Economics, Elsevier, vol. 32(5), pages 794-803.
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