Which preferred providers are really preferred? Effectiveness of insurers’ channeling incentives on pharmacy choice

  • Lieke H. H. M. Boonen
  • Frederik T. Schut
  • Bas Donkers
  • Xander Koolman
Article

Abstract

Efficient contracting of health care requires effective consumer channeling. Little is known about the effectiveness of channeling strategies. We study channeling incentives on pharmacy choice using a large scale discrete choice experiment. Financial incentives prove to be effective. Positive financial incentives are less effective than negative financial incentives. Channeling through qualitative incentives also leads to a significant impact on provider choice. While incentives help to channel, a strong status quo bias needs to be overcome before consumers change pharmacies. Focusing on consumers who are forced to choose a new pharmacy seems to be the most effective strategy.

Keywords

Preferred provider choice Status quo bias Pharmacy market Willingness to pay Discrete choice experiments 

JEL Code

C1 I11 G22 

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Copyright information

© Springer Science+Business Media, LLC 2009

Authors and Affiliations

  • Lieke H. H. M. Boonen
    • 1
  • Frederik T. Schut
    • 1
  • Bas Donkers
    • 2
  • Xander Koolman
    • 1
    • 3
  1. 1.Institute of Health Policy and ManagementErasmus University Medical CenterRotterdamThe Netherlands
  2. 2.Marketing DepartmentErasmus UniversityRotterdamThe Netherlands
  3. 3.IPSE Studies, Faculty of Technology, Policy and ManagementDelftThe Netherlands

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