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Screening and preventable illness.

M M Byrne1, P Thompson

  • 1Department of Veterans Affairs Medical Center, Health Services Research and Development Center of Excellence, Houston, TX 77030, USA. mbyrne@bcm.tmc.edu

Journal of Health Economics
|January 5, 2002
PubMed
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Individuals with myopia, or a constant discounting of the future, need commitment devices for optimal health strategies. Financial incentives can correct suboptimal health choices in screening and disease prevention.

Area of Science:

  • Health economics
  • Behavioral economics
  • Public health

Background:

  • Agents who do not discount the future at a constant rate (myopia) may struggle to achieve optimal strategies without commitment devices.
  • This concept is applied to health behaviors, specifically screening and disease prevention, where suboptimal choices can occur.

Purpose of the Study:

  • To explore how financial incentives can correct suboptimal health choices in the context of screening and disease prevention.
  • To analyze the optimal interventions for screening and prevention efforts when agents exhibit myopia.

Main Methods:

  • The study applies a theoretical model to analyze decision-making under conditions of non-constant discounting (myopia).
  • It examines the impact of financial incentives, such as taxes and subsidies, on screening and prevention behaviors.

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Main Results:

  • Myopia does not necessarily lead to under-screening.
  • The optimal intervention for prevention effort is a subsidy that is invariant to the state.
  • Optimal intervention for screening may involve a tax or a subsidy, depending on the context.

Conclusions:

  • A simple and practical subsidy, equal to one minus the discount factor, is indicated for both screening and intervention when these behaviors are coincident.
  • Financial incentives can be tailored to correct for myopic health choices and improve overall health outcomes.