Using Behavioral Economics to Design Physician Incentives That Deliver High-Value Care

In Annals of Internal Medicine, Ezekiel Emanuel and colleagues, including Judd Kessler, Ralph Muller, Amol Nayathe, and Kevin Volpp, discuss several principles of behavior economics, including inertia, loss aversion, choice overload, and relative social ranking. Designing physician incentives based on behavioral economics principles can improve their effectiveness through better alignment with performance goals. The study includes anecdotal examples of successful incentive programs that apply behavioral economics principles. Though the effectiveness of behavioral economic-based incentive programs is largely untested, application and rigorous evaluation of infrastructure changes and incentives can help design payment systems that incentive high-quality, cost-conscious care.