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PLoS Med. 2019 Mar 19;16(3):e1002761. doi: 10.1371/journal.pmed.1002761. eCollection 2019 Mar.

Cost-effectiveness of financial incentives for improving diet and health through Medicare and Medicaid: A microsimulation study.

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Friedman School of Nutrition Science and Policy, Tufts University, Boston, Massachusetts, United States of America.
Brigham and Women's Hospital, Boston, Massachusetts, United States of America.
Harvard T.H. Chan School of Public Health, Boston, Massachusetts, United States of America.



Economic incentives through health insurance may promote healthier behaviors. Little is known about health and economic impacts of incentivizing diet, a leading risk factor for diabetes and cardiovascular disease (CVD), through Medicare and Medicaid.


A validated microsimulation model (CVD-PREDICT) estimated CVD and diabetes cases prevented, quality-adjusted life years (QALYs), health-related costs (formal healthcare, informal healthcare, and lost-productivity costs), and incremental cost-effectiveness ratios (ICERs) of two policy scenarios for adults within Medicare and Medicaid, compared to a base case of no new intervention: (1) 30% subsidy on fruits and vegetables ("F&V incentive") and (2) 30% subsidy on broader healthful foods including F&V, whole grains, nuts/seeds, seafood, and plant oils ("healthy food incentive"). Inputs included national demographic and dietary data from the National Health and Nutrition Examination Survey (NHANES) 2009-2014, policy effects and diet-disease effects from meta-analyses, and policy and health-related costs from established sources. Overall, 82 million adults (35-80 years old) were on Medicare and/or Medicaid. The mean (SD) age was 68.1 (11.4) years, 56.2% were female, and 25.5% were non-whites. Health and cost impacts were simulated over the lifetime of current Medicare and Medicaid participants (average simulated years = 18.3 years). The F&V incentive was estimated to prevent 1.93 million CVD events, gain 4.64 million QALYs, and save $39.7 billion in formal healthcare costs. For the healthy food incentive, corresponding gains were 3.28 million CVD and 0.12 million diabetes cases prevented, 8.40 million QALYs gained, and $100.2 billion in formal healthcare costs saved, respectively. From a healthcare perspective, both scenarios were cost-effective at 5 years and beyond, with lifetime ICERs of $18,184/QALY (F&V incentive) and $13,194/QALY (healthy food incentive). From a societal perspective including informal healthcare costs and lost productivity, respective ICERs were $14,576/QALY and $9,497/QALY. Results were robust in probabilistic sensitivity analyses and a range of one-way sensitivity and subgroup analyses, including by different durations of the intervention (5, 10, and 20 years and lifetime), food subsidy levels (20%, 50%), insurance groups (Medicare, Medicaid, and dual-eligible), and beneficiary characteristics within each insurance group (age, race/ethnicity, education, income, and Supplemental Nutrition Assistant Program [SNAP] status). Simulation studies such as this one provide quantitative estimates of benefits and uncertainty but cannot directly prove health and economic impacts.


Economic incentives for healthier foods through Medicare and Medicaid could generate substantial health gains and be highly cost-effective.

Conflict of interest statement

I have read the journal's policy and the authors of this manuscript have the following competing interests: RM reports research funding from NIH, Bill & Melinda Gates Foundation, and Unilever and personal fees from the World Bank and Bunge. DM reports research funding from the National Institutes of Health and the Gates Foundation; personal fees from GOED, Nutrition Impact, Pollock Communications, Bunge, Indigo Agriculture, Amarin, Acasti Pharma, Cleveland Clinic Foundation, America’s Test Kitchen, and Danone; scientific advisory board, Elysium Health (with stock options), Omada Health, and DayTwo; and chapter royalties from UpToDate, all outside the submitted work. TAG has also received research funds and/or consulting fees from Astra Zeneca, Novartis, United Health Group, Teva Pharmacueticals, and Takeda in the past five years, all of which were outside the submitted work.

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