Cost-effectiveness of Financial Incentives for Improving Diet and Health Through Medicare and Medicaid: A Microsimulation Study

Background: Economic incentives through health insurance may promote healthier behaviors. Little is known about health and economic impacts of incentivizing diet, a leading risk factor for diabetes and cardiovascular disease (CVD), through Medicare and Medicaid.

Methods And Findings: A validated microsimulation model (CVD-PREDICT) estimated CVD and diabetes cases prevented, quality-adjusted life years (QALYs), health-related costs (formal healthcare, informal healthcare, and lost-productivity costs), and incremental cost-effectiveness ratios (ICERs) of two policy scenarios for adults within Medicare and Medicaid, compared to a base case of no new intervention: (1) 30% subsidy on fruits and vegetables ("F&V incentive") and (2) 30% subsidy on broader healthful foods including F&V, whole grains, nuts/seeds, seafood, and plant oils ("healthy food incentive"). Inputs included national demographic and dietary data from the National Health and Nutrition Examination Survey (NHANES) 2009-2014, policy effects and diet-disease effects from meta-analyses, and policy and health-related costs from established sources. Overall, 82 million adults (35-80 years old) were on Medicare and/or Medicaid. The mean (SD) age was 68.1 (11.4) years, 56.2% were female, and 25.5% were non-whites. Health and cost impacts were simulated over the lifetime of current Medicare and Medicaid participants (average simulated years = 18.3 years). The F&V incentive was estimated to prevent 1.93 million CVD events, gain 4.64 million QALYs, and save $39.7 billion in formal healthcare costs. For the healthy food incentive, corresponding gains were 3.28 million CVD and 0.12 million diabetes cases prevented, 8.40 million QALYs gained, and $100.2 billion in formal healthcare costs saved, respectively. From a healthcare perspective, both scenarios were cost-effective at 5 years and beyond, with lifetime ICERs of $18,184/QALY (F&V incentive) and $13,194/QALY (healthy food incentive). From a societal perspective including informal healthcare costs and lost productivity, respective ICERs were $14,576/QALY and $9,497/QALY. Results were robust in probabilistic sensitivity analyses and a range of one-way sensitivity and subgroup analyses, including by different durations of the intervention (5, 10, and 20 years and lifetime), food subsidy levels (20%, 50%), insurance groups (Medicare, Medicaid, and dual-eligible), and beneficiary characteristics within each insurance group (age, race/ethnicity, education, income, and Supplemental Nutrition Assistant Program [SNAP] status). Simulation studies such as this one provide quantitative estimates of benefits and uncertainty but cannot directly prove health and economic impacts.

Conclusions: Economic incentives for healthier foods through Medicare and Medicaid could generate substantial health gains and be highly cost-effective.