Financial Incentives for Health: An Underutilized Tool

New research suggests financial rewards could effectively promote healthier lifestyles, yet remain largely untapped.


Summary: A study by Radboud University explores the potential of financial incentives to encourage healthier behaviors, highlighting both their effectiveness and the obstacles to their widespread implementation.

Estimated reading time: 5 minutes


Financial incentives could be a powerful tool in promoting healthier lifestyles and reducing health inequalities in the Netherlands, according to recent research. Despite growing evidence of their effectiveness, these incentives remain underutilized in health promotion strategies.

A team of researchers from Radboud University, Erasmus University, Delft University of Technology, and Leiden University investigated the barriers to implementing reward systems for healthy behaviors. Their findings, published this week in Economisch Statistische Berichten (ESB), shed light on why such incentives are not more widely adopted.

The Power of Financial Motivation

Koen van der Swaluw of Radboud University, a key researcher in the study, states, “Some lifestyle interventions are more effective than others, but in general, financial incentives are a ‘powerful tool to help reduce health inequalities in the Netherlands’.”

The research team examined various lifestyle intervention programs and found that financial incentives can indeed influence behavior change. However, they also identified several obstacles that prevent the widespread adoption of such strategies.

Addressing Common Concerns

One of the primary objections to financial incentives is the concern about long-term effects. Critics argue that behavior changes may not persist once the incentive ends. Van der Swaluw acknowledges this concern but points to successful examples: “For instance, there have been successful programmes to discourage smoking during pregnancy, programmes that have long-term effects.”

Another issue is the mismatch between rewards and recipients. The researchers found that rewards often fail to align with the preferences of the target audience. Van der Swaluw explains, “Simply put: don’t give away tickets to the opera, for example, but to football matches.” This misalignment can significantly reduce the effectiveness of incentive programs.

Cost Considerations and Potential Solutions

The cost of implementing financial incentive programs is often cited as a barrier. To address this, the researchers propose several solutions:

  1. Reimbursement through collective health insurance, similar to curative care, if proven cost-effective through social cost-benefit analysis.
  2. Employer involvement in encouraging healthy behavior and potentially covering part of the costs.

These approaches could make financial incentive programs more feasible and sustainable in the long run.

Beyond Individual Behavior

While the study highlights the potential of financial incentives, the researchers caution against viewing them as a cure-all solution. Van der Swaluw and his colleagues emphasize that healthy behavior results from a complex interplay of individual choices and environmental factors.

“In no way are they a replacement for policies aimed at structural aspects of unhealthy behaviour, such as exercise or food supply in the neighbourhood someone lives in, poverty, cultural influences and national or international laws and regulations,” the researchers note.

Future Research

The team is not stopping here. From November 2024, they will embark on the SPRINTS (‘Sports Pricing Research to INcrease Sport Participation’) project in collaboration with the HAN University of Applied Sciences. This initiative will investigate how pricing influences sports and exercise participation, further exploring the role of financial factors in promoting healthy lifestyles.


Quiz: Test Your Understanding

  1. What is the main focus of the research discussed in the article?
  2. What is one of the primary objections to using financial incentives for health promotion?
  3. According to the researchers, what should be considered when choosing rewards for health incentive programs?

Answer Key:

  1. The effectiveness and barriers to implementing financial incentives for promoting healthier lifestyles.
  2. Concerns about the long-term effects of behavior change once the incentive ends.
  3. Aligning rewards with the preferences of the target audience (e.g., football tickets instead of opera tickets).

Glossary of Terms

  1. Financial incentives: Monetary rewards or benefits offered to encourage specific behaviors or actions.
  2. Lifestyle interventions: Programs or strategies designed to promote healthier habits and behaviors.
  3. Cost-effective: Providing good value for money in terms of the outcome achieved for the cost incurred.
  4. Social cost-benefit analysis: An approach to estimate the strengths and weaknesses of alternatives by evaluating their costs and benefits from a societal perspective.
  5. Curative care: Medical care designed to treat and cure a condition that has already developed.
  6. Health inequalities: Differences in health status or in the distribution of health resources between different population groups.

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