Impact of Financial Incentives on Service Use, Spending, and Health in Medicaid

The Centers for Medicare and Medicaid Services provided grants to Medicaid programs through the Medicaid Incentives for Prevention of Chronic Diseases program to test whether financial incentives changed the use of healthcare services, Medicaid spending, and health outcomes. Six states implemented programs related to diabetes prevention, weight management, diabetes management, and hypertension management. The purpose of this study is to examine whether receipt of financial incentives increased use of services incentivized by the program; reduced expenditures, inpatient admissions, emergency department visits; and improved health outcomes.

State data on program participation and incentives (between 2011 and 2015) and 2 years of Medicaid claims data pre-Medicaid Incentives for Prevention of Chronic Diseases enrollment and >2 years of claims data after enrollment were analyzed using covariate-adjusted regression analyses. Negative binomial, logistic, and linear regressions were used, depending on the outcome variable of interest (services, inpatient admissions and emergency department visits, and total expenditures). Analyses were conducted in 2015 and 2016.

Incentive recipients attended, on average, one to two more diabetes prevention classes than control participants, but incentives did not significantly improve uptake of other types of services, such as meetings with a health coach or doctor, gym visits, or attendance at Weight Watchers meetings. Modest improvements in health outcomes, such as weight loss, were observed, yet there were very few significant changes in inpatient admissions, emergency department visits, and Medicaid expenditures.

Financial incentives are useful for engaging Medicaid enrollees in disease prevention programs, but program engagement may not necessarily lead to changing patterns of healthcare utilization and expenditures in the short run.