The Effect of Out-of-pocket Costs and Financial Rewards in a Discrete Choice Experiment: an Application to Lifestyle Programs

Background: Both out-of-pocket costs and financial rewards can be used to influence health related behavior. However, it is unclear which of these two has a larger effect on health related behavior. The aim of this study was to explore the possible difference in effect size between out-of-pocket costs and financial rewards on the willingness of diabetes mellitus type 2 (DM2) patients to participate in a lifestyle program.

Methods: A discrete choice experiment (DCE) questionnaire was sent to 767 DM2 patients in a geographically defined area (De Leidsche Rijn, Utrecht) in The Netherlands and completed by 206 of them. The questionnaire comprised of 18 choice tasks of which 9 contained a financial reward for lifestyle program completion, while the other 9 included out-of-pocket costs for program participation. In a second version of the questionnaire, the order of out-of-pocket cost and financial reward choice tasks was counterbalanced to reduce bias with respect to the position (first or second) of the two types of choice tasks. Panel-mixed-multinomial-logit models were used for data analysis.

Results: Increasing out-of-pocket costs were associated with a decreasing willingness to participate in a lifestyle program and, contrary to our expectations, increasing financial rewards were also associated with a decreasing willingness to participate in a lifestyle program. In addition, this willingness to participate changed to the same extent for both increasing out-of-pocket costs and increasing financial rewards.

Conclusions: As expected, increasing out-of-pocket costs may prevent people from deciding to participate in a lifestyle program. However, offering a financial reward to persuade people to participate in a lifestyle program, may result in decreasing willingness to participate in a lifestyle program as well.