Physician burnout in the US is reaching epidemic proportions as healthcare systems seek affordable solutions to optimize outcomes. Significant strides can be made towards the quadruple aim of better care, improved outcomes, at lower costs, with enhanced experiences if we could better influence the health-related decisions that take place between a clinician and a patient. Behavioral economics is useful in understanding this.
Our behavior is powerfully influenced by our emotions, identity, and environment, as well as by how options are presented to us. Traditional economics is rooted in the assumption that people make rational, self-interested decisions based on a strict cost/benefit analysis of their options. By contrast, behavioral economics acknowledges that common psychological factors, such as aversion to loss or the desire for fairness, also influence people’s decisions.
For optimal outcomes, finding gentle but effective ways to change the behavior of both clinicians and patients is essential. This can be achieved by providing a “healthy nudge.” A nudge is a behavioral economics concept which proposes positive reinforcement and indirect suggestions that influence the behavior and decision-making process of groups or individuals. This concept has shown to be effective in randomized trials. By creating a more favorable decision-making environment, we can take advantage of cognitive biases to encourage high-value care.
Nudges will look different based on the individual receiving the nudge. For example, physicians may increase referrals to cardiac rehabilitation for patients who have had a heart attack. While a best practice, a referral typically requires various steps on the part of the referring physician. Conversely, a nudge might be deployed to dissuade a physician from utilizing unnecessary diagnostic testing. For patients, nudges can promote adherence to exercise programs or medication regimens, or visits to a physician. Many elements of healthcare are dependent on the patient’s behavior. Though patients are highly motivated to improve their behavior, this can be difficult. Designing the right incentives for both patients and physicians may be the key solution.
One fundamental example of a nudge based in behavioral economics is the power of defaults. Defaults take advantage of the status quo bias — a preference for continuing the current state of affairs. Health systems can employ defaults in a myriad of ways to promote high-value care. For example, when electronic order-entry programs default to generic drugs instead of brand name ones, clinicians are more likely to prescribe generics.
A classic example of a nudge is lottery-based rewards. State lotteries capitalize on the innate regret aversion of the human mind. Providers can use the same approach on patients in tandem with pill-bottle technology that allows medication adherence monitored remotely. As an incentive, a lottery can be held each week, with a prize going to the patient whose number is drawn at random. However, patients are ineligible to win if they did not take their medication, which is a powerful motivator. A research study conducted by Dr. Kevin Volpp, a physician at the University of Pennsylvania and his team is proof of that. In order to get people to lose weight and exercise more, patients were given incentives by entering them into lotteries or into direct deposit contracts for meeting weight loss goals. Those in the lottery group were eligible for a daily lottery prize with frequent small payouts and occasional large rewards — but only if they clocked in at or below their weight loss goal. People in the deposit group invested their own money (generally a few dollars a day), which was then matched by researchers. They got their money back — and then some — if they met their goal at the end of the month. The study found that at four months, both incentive groups had lost a significant amount of weight.
Again, the phenomenon of loss aversion offers an avenue for changing clinicians' behavior. Research suggests that losses have about twice the psychological impact of commensurate gains — and the fear of a monetary loss can, therefore, produce a greater behavioral response than the opportunity to gain the same amount of money. According to New England Journal of Medicine (2015) – “Massachusetts General Hospital, for example, used a strategy of up-front incentive payments in an effort to improve hand hygiene, increase electronic prescribing and reduce emergency department use. Physicians received incentive payments in advance of the measurement period, separately from regular paychecks. A survey of participating physicians showed that 78% believed the program had increased clinicians' focus on the quality of care and 79% wanted it to continue” (p.2282).
Further, people have a strong psychological need to maintain a positive self-image. Pairing performance incentives, which appeal to self-image and professional identity, provides an additional lever for meeting quality and efficiency goals. Making public some component of physicians’ performance, at least within organizations, may enhance the effectiveness of monetary incentives.
The New York Times also says – “Health insurers are betting that behavioral economics can improve quality and lower costs. Blue Cross Blue Shield (B.C.B.S.) of Massachusetts is using a variety of behavioral economics concepts to pay its doctors — including delivering incentives at the organizational level; peer comparisons and bonus payments for continuous improvement instead of absolute thresholds. In Hawaii, Blue Cross Blue Shield is experimenting with joint incentives for doctors and patients to meet diabetes care goals” (Khullar, D.; 2017; para.17). Start-ups like the Brooklyn based company Wellth, for example, are also jumping into the nudge game by having developed an app to reward patients for taking their medications.
So then is behavioral economics better directed towards patients or toward clinicians? The evidence suggests both. Dr. David Asch, executive director of the Penn Medicine Center for Health Care Innovation led a study that consisted of four groups, each of which was seeking to achieve LDL cholesterol reduction in patients: Physician incentives ($1,024 per patient who achieved his or her cholesterol target after 12 months), patient incentives ($1,024 for achieving the target), shared incentives ($512 each to the physician and patient for achieving the target), and a control group. The results showed that patient incentives or physician incentives alone did not produce significantly greater cholesterol reduction than the control group. Nevertheless, shared incentives did boost results. According to Asch, “It takes two to tango. It takes a physician to prescribe and a patient to take it, and in many strategies to improve healthcare, we target one or the other. We do not think about using them together. We are taught that the clinician-patient relationship is important than why aren’t we using this effectively?” (Hutt, N.; 2018, para. 29).
Hence, health is fundamentally the product of daily decisions made by doctors and patients, and by uncovering what truly motivates, we may be able to nudge one another toward wiser decisions and healthier lives.
Kullar, D. (2017). How Behavioral Economics Can Produce Better Healthcare. New York Times. Retrieved from https://www.nytimes.com/2017/04/13/upshot/answer-to-better-health-care-behavioral-economics.html
Khullar, D., Chokshi, D., Kocher, R., Reddy, A., Basu, K., Conway, P., & Rajkumar, R. (2015). Behavioral Economics and Physician Compensation — Promise and Challenges. The New England Journal of Medicine, 372(24), 2281-2283.