People find paying a standard monthly fee and an upfront co-pay for visits attractive because they feel that they are losing less money and are motivated to keep visit for reimbursement, a new study on healthcare plans has found.
Research on the study was conducted by Princeton University's Institute for Advanced Studies and Survey Sampling International. SSI conducted the survey of 1,000 US respondents online in June 2007. Survey participants were randomly assigned two groups, the first to a payback plan and the second to a prepay plan.
The first group was asked to compare a standard insurance plan - requiring them to pay a monthly fee and co-pay for visits- with a payback plan, in which they would pay a higher monthly fee and would be paid to get important health tests and screenings. Participants in the first group revealed that 58 percent preferred the standard plan and 42 percent preferred the payback plan.
The second group was asked to compare the standard plan with a prepay plan where they would not only pay the monthly fee but would also prepay the co-pays for visits. The only stipulation being that if the visit was not made neither would the reimbursement. Participants in the second group revealed that 44 percent preferred the standard plan and 56 percent preferred the prepay plan.
"This suggests to us that people like the element of self-control," said Princeton researcher Janet Schwartz. "Payback is nice and reduces some of the negative emotion produced by having to pay for things that are unpleasant, but it's not really enough to make the plan more attractive than the standard plan. Pre-payment confronts two issues: one, that people shouldn't have to add the 'pain' of financial loss to the discomfort of having tests; and two, that the prepay plan addresses the issue of self-control. 'If I don't go for my mammogram, I lose $50.'"
Schwartz's colleague at Princeton Dan Ariely added, "We wanted to see if people would be willing to sacrifice money to gain control over their lives. We wondered if pre-paying could motivate people to get the preventive care."
The fact that people preferred the prepay plan over the payback plan "suggests that people are more attracted to plans that will motivate behavioral change and self-control than to pure economic incentives to engage in routine preventive care," said Schwartz.
Survey Sampling will be fielding additional rounds of the study to help determine the optimal alternative health care plan. Ariely said he plans to take the "best" plan to a small company, for one year, that pays for employees' health care but does not do so through a health care organization, and based on outcomes will approach health care providers.