Adherence to long-term prophylactic treatment : microeconomic analysis of patients’ behavior and the impact of financial incentives

The effectiveness of medical therapies depends crucially on patients’ adherence. To gain deeper insight into the behavioral mechanisms underlying adherence, we present a microeconomic model of the decision-making process of an individual who is initially in an asymptomatic clinical state and to whom a prophylactic therapy is offered with the aim of preventing damage to health in the future. The focus of modeling is the optimization of an intertemporal utility function, where time-inconsistent preferences are incorporated by a quasi-hyperbolic discount function. The predictions of the model concur with experience in clinical practice. Moreover, the introduction of time-inconsistency reveals a self-control problem of the individuals where resolutions made before may be given up at a later time. A more pronounced present bias leads to a decrease in adherence and, consequently, the gain in societal welfare resulting from the prophylactic therapy declines. Developing effective strategies to improve adherence is a major challenge in health care. As an example, the impact of financial incentives offered to the patients on adherence and welfare are investigated on the basis of the model. The results are consistent with empirical findings. The approach presented contributes to a better understanding of the complex interaction of the relevant determinants for adherence, particularly regarding the individuals’ self-control problem.