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Market-Based Solutions to Vital Economic Issues


Kenan Institute 2024 Grand Challenge: Business Resilience
Market-Based Solutions to Vital Economic Issues
Jan 19, 2021

Focusing Provider Attention: An Empirical Examination of Incentives and Feedback in Flu Vaccinations


Background: Influenza imposes heavy societal costs through healthcare expenditures, missed days of work, and numerous hospitalizations each year. Considering these costs, the healthcare and behavioral science literature offers suggestions on increasing demand for flu vaccinations. And yet, the adult flu vaccination rate fluctuated between 37% and 46% between 2010 and 2019.

Aim: Although a demand-side approach represents one viable strategy, an operations management approach would also highlight the need to consider a supply-side approach. In this paper, we investigate how to improve clinic vaccination rates by altering provider behavior.

Methodology: We implement and study a flu vaccine intervention among 145 clinics from 9 different states. This intervention randomly assigned these clinics to a control group or one of two separate treatment arms that received either relative performance feedback or financial incentives.

Results: We find clinics that received relative performance feedback outperformed all others: Our intervention led to a 12% increase in flu shots for this group of clinics. Moreover, we also find clinics in this group exhibit rank response behavior, specifically Last-Place Aversion; in particular, clinics near Last-Place outperform the corresponding control clinics by 23 percentage points.

Conclusion: Overall, we find that clinic-level performance feedback can effectively drive operational improvement. Even a small increase in the US adult flu vaccination rate might confer hundreds of millions of dollars in societal benefits and prevents thousands of hospitalizations. We discuss the implications of our work for healthcare operations theory, healthcare providers, and healthcare administrators.

Note: Research papers posted on SSRN, including any findings, may differ from the final version chosen for publication in academic journals. 

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