Participation in a bonus program for preventive behavior and its association with health care expenditures

Abstract This study examines the association between cash rewards for preventive health behaviors and subsequent health care expenditures under social health insurance schemes. We analyze a comprehensive dataset of all clients of a large German health insurance company, covering 1 year before and 5 years after the introduction of a cash bonus program. Program participation was associated with increased prevention efforts and reduced health care expenditures each year since its implementation. The estimated associations were more pronounced for individuals who participated in the program for multiple years. Statistically significant negative associations with health care expenditures are observed only in the first and fifth years. However, when dynamic selection is considered, the statistical significance of the associations in the fifth year becomes less clear. The estimated temporal effect dynamics highlight the complexity of strategies aimed at achieving long-term cost savings in health insurance.