Can Behavioral Economics Improve Health Care?

Can Behavioral Economics Improve Health Care? Many researchers think that it can, and are putting their money into attempts to understand how patients and physicians make health care decisions and what techniques can be used to influence those decisions for the better. For example, The Robert Wood Johnson Foundation invested $2.5 million to test out some theories of behavior: why do some people get a flu shot and not others? What makes an impact on physician hand washing? What would help patients take their medication and be more compliant with their health care treatment?

It used to be thought that people were rational and made decisions based on what was best for them, a kind of cost/benefit evaluation process. But if that were really true, then everyone would avoid French fries and floss their teeth daily. Yet this is not the case. The field of behavioral economics investigates how individuals actually behave as opposed to how they would behave if they were perfectly reasonable and made decisions on their best interest.

Research shows that our behavior is influenced by many factors: our emotions, who we are, our environment, and the manner in which alternative choices are presented to us. The field of behavioral economics began by trying to explain such economic issues as why people didn’t save for retirement or why they spent money on some things and not others, but has moved into explaining health behaviors. Behavioral economics recognizes that people make decisions by instinct, by default, using subtle cues that they may not even be aware of; they take the line of least resistance, need positive reinforcement, and may be selfish. Decisions are complicated. Assuming people will act in their best interest turns out to be naïve.

For example, a study about obesity prevention found that the quantity of food one ate was related to the size of the plate or container, the packaging, rather than about hunger or even the tastiness of the food. Plate size has nothing to do with appetite and yet it was found to be the salient factor in overeating (B. Wansink, Mindless eating: why we eat more than we think. Bantam Books, NY, 2006). Our predilection for maintaining the status quo rather than changing routines can be used to manipulate healthier behaviors. Something as simple as displaying healthy food at eye level or putting healthy choices on the top of menus can make a difference (Downs, Loewenstein, Wisdom, Strategies for promoting healthier food choices. American Economic Review, 99, 2009, 1277-1283). Stressing the power of default can also be manipulated to a healthier advantage. If health care workers are mandated to have a flu vaccine unless they opt out in writing, there is an increase of compliance with vaccinations.

The method in which options are presented make a difference as well. A study of how terminally ill patients were influenced showed that a preselected option (the default) that chose a comfort approach was chosen more frequently than a blank box giving an open choice between aggressive and comfort care. Also positive choices usually trump negative ones, so that winning 100 dollars feels twice as good as losing $100 feels bad. Patients are more likely to opt for surgery when framed in terms of survival (95% survival) rather than mortality (5% mortality).

Daniel Kahneman, who received the Nobel Prize in Economics in 2002 and is the author of the best-selling 2011 book Thinking Fast and Slow, describes how people make decisions based on intuition and reasoning. Intuitive decisions are quick, automatic and emotionally charged. Reasoning processes are much slower, reflective, deliberate and effortful. Research shows that most of us make decisions using intuition far more than reasoning. He also points out that our capacity for mental effort is limited so that in a stressful situation where speed is a factor we operate using impulsive emotional factors rather than reflective ones. In health care this makes a huge difference.

Dhruv Khullar, a physician who confessed to making decisions based on various subtle cues in his New York Times article, “How Behavioral Economics Can produce Better health Care (April 13, 2017), says he may prescribe a medication not because he knows it is superior to any other medication but because it is the default option in the hospitals’ electronic medical system.  He says that the signs reminding him to wash his hands when he enters a patient’s room actually provoke him to do so (when of course he should do it as a matter of course for infection control).

Medical decisions are fraught with emotions, uncertainly, and complexity – all reasons to use our instincts. So researching the field of behavioral economics and its insight into health care decisions can have huge benefits for everyone.