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Why UFI nudges will get stuck in the policy process.

Joshua Lawson¹, Brendan Howard

¹KPMG Management Consulting, Toronto, Ontario.

Healthcarepapers

|May 30, 2013

Summary

User financial incentives (UFI) can influence Canadian health policy but face moral and practical challenges. While not transformative, UFI and behavioral policy approaches are expected to grow in prominence.

Area of Science:

Public Policy
Behavioral Economics
Health Policy Analysis

Background:

Traditional health policy relies on information, but behavioral economics offers new tools.
User financial incentives (UFI) represent a novel approach within behavioral public policy.
The integration of UFI into the public sphere presents unique challenges and opportunities.

Purpose of the Study:

To explore the potential impact of User Financial Incentives (UFI) on Canadian health policy.
To analyze the limitations and challenges associated with implementing UFI and behavioral nudges.
To assess the likely transformative effect and future prominence of UFI in public policy.

Main Methods:

Conceptual analysis of UFI within the framework of behavioral public policy.

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Examination of potential moral, efficacy, and cost-benefit challenges.

Consideration of political and bureaucratic impediments to policy implementation.

Main Results:

UFI and nudges face significant moral, efficacy, and cost-benefit hurdles.
Political and bureaucratic factors impede the transformative potential of UFI.
Despite limitations, the theory behind UFI and behavioral policy is gaining traction.

Conclusions:

UFI and behavioral public policy offer exciting potential but require realistic expectations.
Implementation challenges will likely prevent UFI from revolutionizing public policy.
The adoption of UFI principles is expected to increase through broader learning and acceptance.