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Behavioral Economics and Risk: Value-Based Payment Methods and Incentives

2nd term
Online Programs for Applied Learning
4 credits
Academic Year:
2021 - 2022
Instruction Method:
Auditors Allowed:
Grading Restriction:
Letter Grade or Pass/Fail
Course Instructor:
  • Douglas Hough
Douglas Hough

Must have completed all 1st year courses to enroll in this course


The Patient Protection and Affordable Care Act (PPACA) calls for a higher quality system that wastes less and encourages efficient and effective care by accelerating value measurement and Value-Based Reimbursement (VBR) efforts. VBR includes a variety of payment methods designed to establish and align incentives for efficient and effective care, hold providers accountable for adverse clinical events, and adopt transitional strategies to create the right infrastructure for support of VBR.

Provides students with tools from mainstream and behavioral economics that can be used for managing population health. Demonstrates the value – and limitations – of these approaches for influencing the decision-making of providers and the health behaviors of individuals, with particular attention to value-based payment methods and incentives. Examines the influence of payment design on provider and patient behaviors and applies concepts of behavioral economics to evaluate and propose essential elements of effective payment models and incentives designed to improve health and reduce costs. Draws on articles from the popular press and professional journals that illustrate how these approaches have been applied in experimental and real situations.

Learning Objectives:

Upon successfully completing this course, students will be able to:

  1. Compare and contrast the different approaches of mainstream and behavioral economics
  2. Articulate the advantages and limitations of economic principles – both mainstream and behavioral – to influence human behavior
  3. Apply the principles and concepts of mainstream and behavioral economics to design incentive-based interventions to improve individual health behavior
  4. Apply the principles and concepts of mainstream and behavioral economics to design payment systems that reward providers for addressing population health issues that their patients and communities face
Methods of Assessment:

Individual periodic assignments: 45%, Behavioral intervention proposal: 20%, Health economic issue analysis: 30%, Participation: 5%

Enrollment Restriction:

Restricted to students in MAS in Population Health Management

Instructor Consent:

No consent required