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Behavioral Economics in Health
- 2. + Traditional Economics Health economics is a branch of economics concerned with issues related to efficiency, effectiveness, value and behavior in the production and consumption of health and health care. Assumptions of traditional economics People have rational preferences and act rationally People have complete self control People are selfish and seek to maximize their utility Are these assumptions true?
- 3. + Behavioral Economics Behavioral economics and the related field, behavioral finance, study the effects of psychological, social, cognitive, and emotional factors on the economic decisions of individuals and institutions and the consequences for market prices, returns, and the resource allocation “Imperfect people are making imperfect decisions, and behavioral economics does a better job than mainstream economics of explaining and predicting this reality.”
- 5. + End-of-Life Care Decisions Three groups randomized to receive one of three advance directive forms Form 1 (Opt-In): A standard advance directive form with two choices to express preference for care: life-extending or comfort-oriented Form 2 (Opt-Out): A default option was selected, and patients could opt-out of the default option if desired: comfort-oriented care Form 3 (Opt-Out): A default option was selected, and patients could opt-out of the default option if desired: life-extending care What percent of patients selected comfort-oriented care? Form 1 (Opt-In): 61% Form 2 (Opt-Out, Default Comfort Care): 77% Form 3 (Opt-Out, Default Life-Extending Care): 43%
- 6. + Vaccination Reminders Two forms of reminder mailings were sent to patients to remind them to receive the flu vaccine Form 1: Standard reminder (“Remember to get your flu vaccine”) Form 2: Reminder + “Write down a date and time you plan to get the flu shot” Did the type of form matter? Those who wrote down a date and time had a 4.2 percentage point higher vaccination rate than those who received a standard reminder
- 7. + Concepts in Behavioral Economics
- 8. + Concepts in Behavioral Economics
- 9. + Concepts in Behavioral Economics
- 10. + Concepts in Behavioral Economics Scenario One: Potential Heart Attack A 60-year-old male patient (who was just fired from his job) is admitted in an emergency ward with the following symptoms: pain radiating to left arm, skin eruption, accelerated pulse rate, pressure on the chest, pain while passing urine, strong leg pain, shortness of breath, sore throat, and low level of oxygen pressure in the blood Scenario Two: Potential Heart Attack A 60-year-old male patient is admitted in an emergency ward with the following symptoms: pain radiating to left arm, skin eruption, accelerated pulse rate, pressure on the chest, pain while passing urine, strong leg pain, shortness of breath, sore throat, and low level of oxygen pressure in the blood Stress Reaction: 26% Heart Attack: 74% Stress Reaction: 0% Heart Attack: 100%
- 11. + Concepts in Behavioral Economics Scenario One: You are working in a hospital and you notice a male lying down in the waiting room. When doing your assessment you notice the following: smell of alcohol on his breath, slurred speech, uneven gait, and a weakness in his right arm. Scenario Two: You are working in a hospital and you notice a male lying down in the waiting room. When doing your assessment you notice the following: slurred speech, uneven gait, and a weakness in his right arm. Stroke: 27% Inebriation: 73% Stroke: 98% Inebriation: 2%
- 12. + Concepts in Behavioral Economics Scenario One: You are working in a hospital and you notice a male lying down in the waiting room. When doing your assessment you notice the following: smell of alcohol on his breath, slurred speech, uneven gait, and a weakness in his right arm. Scenario Two: You are working in a hospital and you notice a male lying down in the waiting room. When doing your assessment you notice the following: slurred speech, uneven gait, and a weakness in his right arm. Stroke: 27% Inebriation: 73% Stroke: 98% Inebriation: 2%
- 13. + Concepts in Behavioral Economics
- 14. + Concepts in Behavioral Economics
- 15. + Concepts in Behavioral Economics
- 16. + Concepts in Behavioral Economics
- 17. + Concepts in Behavioral Economics
- 18. + Concepts in Behavioral Economics
- 19. + Concepts in Behavioral Economics
- 20. + Concepts in Behavioral Economics
- 21. + Concepts in Behavioral Economics
- 22. + Concepts in Behavioral Economics Present Bias
- 23. + Concepts in Behavioral Economics
- 24. + Concepts in Behavioral Economics
- 25. + Concepts in Behavioral Economics
- 26. + Concepts in Behavioral Economics
- 27. + Behavioral Economics In Action
- 28. + Behavioral Economics In Action
- 29. + Concepts in Behavioral Economics
- 30. + Concepts in Behavioral Economics
- 31. + Concepts in Behavioral Economics The U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the exact scientific estimates of the consequences of the programs are as follows: If program A is adopted, 200 people will be saved. If program B is adopted, there is a one-third probability that 600 people will be saved and a two-thirds probability that no people will be saved. Which of the two programs would you favor? The U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the exact scientific estimates of the consequences of the programs are as follows: If program C is adopted, 400 people will die. If program D is adopted, there is a one-third probability that nobody will die and a two-thirds probability that 600 people will die. Which of the two programs would you favor?
- 32. + Concepts in Behavioral Economics The U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the exact scientific estimates of the consequences of the programs are as follows: If program A is adopted, 200 people will be saved. If program B is adopted, there is a one-third probability that 600 people will be saved and a two-thirds probability that no people will be saved. Which of the two programs would you favor? The U.S. is preparing for the outbreak of an unusual Asian disease, which is expected to kill 600 people. Two alternative programs to combat the disease have been proposed. Assume that the exact scientific estimates of the consequences of the programs are as follows: If program C is adopted, 400 people will die. If program D is adopted, there is a one-third probability that nobody will die and a two-thirds probability that 600 people will die. Which of the two programs would you favor?
- 33. + Concepts in Behavioral Economics Loss Aversion
- 34. + Concepts in Behavioral Economics Germany Austria Sweden Denmark 12% ~100% 86% 4%
- 35. + Concepts in Behavioral Economics Germany Austria Sweden Denmark 12% ~100% 86% 4% Status Quo Bias
- 36. + Concepts in Behavioral Economics
- 37. + Concepts in Behavioral Economics Active Choice Active Choice
- 38. + Concepts in Behavioral Economics
- 39. + Concepts in Behavioral Economics Altruistic Capital Altruistic Capital
- 40. + Applying Behavioral Economics Define the health challenge Why aren’t people using mosquito nets? Why are women having unwanted pregnancies? Develop hypotheses about the reasons for the problem Practical reasons: cost, convenience, availability Motivations, cognitive and behavioral barriers Design the experiment Informed selection of comparators Deliver Inform current and future programs and interventions
- 42. + Applying Behavioral Economics It would be shortsighted to overlook simple, inexpensive, and powerful behavioral interventions that can help close the gaps in the global health system.
Editor's Notes
- Action bias is essentially, don't just stand there, do something. When patients visit a physician, they expect a physician to do something (whether it is) making a diagnosis, creating a treatment plan, writing a prescription, ordering an MRI (or) admitting the patient. There are a number of times, however, when the physician knows that there isn't really a need for any of that. The classic joke among physicians is that: “I can write a prescription and you'll get better in seven days, or I can not write a prescription and you'll get better in a week.” But what patients want is action. Regret Bias – 401K People Know what they they want and they can do what they want (iwllpower)
- 2:10
- 77 percent of patients in the comfort-oriented group retained that choice, while 43 percent of those in the life-extending group rejected the default choice and selected comfort-oriented care instead. Among the standard advance directive group, 61 percent of patients selected comfort-oriented care
- The researchers found that those who received a reminder mailing and were prompted to write down the date and time they planned to get a flu shot had a 4.2 percentage point higher vaccination rate than those who just received a reminder in the mail. Milkman et al Using Implementation Intention prompts to enhance influenza vaccination rates
- In both countries, clinical suspicion of West Nile fever sharply rose approximately 1 week after an increase in media coverage (Figure) and declined gradually following the decrease in media coverage. In both countries, most of the test results were negative for the disease, indicating exaggeration of clinical suspicion. In Connecticut, none of the 224 samples tested yielded positive results. In Israel, 491 of 2101 samples (23%) yielded positive results.
- In both countries, clinical suspicion of West Nile fever sharply rose approximately 1 week after an increase in media coverage (Figure) and declined gradually following the decrease in media coverage. In both countries, most of the test results were negative for the disease, indicating exaggeration of clinical suspicion. In Connecticut, none of the 224 samples tested yielded positive results. In Israel, 491 of 2101 samples (23%) yielded positive results.
- https://www.youtube.com/watch?v=KVh52Z_eHuE
- The Representativeness Heuristic: Influence on Nurses’ Decision Making
- The Representativeness Heuristic: Influence on Nurses’ Decision Making
- A series of studies led by psychologist Gabrielle R. Chiaramonte in 2008 provides some clues as to why that may be. In the first study, 230 family doctors and internists were asked to evaluate two hypothetical patients: a 47-year-old man and a 56-year-old woman with identical risk factors and the “textbook” symptoms—including chest pain, shortness of breath, and irregular heart beat—of a heart attack. Half of the vignettes included a note that the patient had recently experienced a stressful life event and appeared to be anxious. In the vignettes without that single line, there was no difference between the doctors’ recommendations to the woman and man. Despite the popular conception of the quintessential heart attack patient as male, they seemed perfectly capable of making the right call in the female patient too. But when stress was added as a symptom, an enormous gender gap suddenly appeared. Only 15 percent of the doctors diagnosed heart disease in the woman, compared to 56 percent for the man, and only 30 percent referred the woman to a cardiologist, compared to 62 percent for the man. Finally, only 13 percent suggested cardiac medication for the woman, compared to 47 percent for the man. The presence of stress, the researchers explained, sparked a “meaning shift” in which women’s physical symptoms were reinterpreted as psychological, while “men's symptoms were perceived as organic whether or not stressors were present.”
- Discount above the median: future oriented
- Discount above the median: future oriented
- Discount above the median: future oriented
- http://www.cdc.gov/pcd/issues/2015/14_0346.htm
- http://www.cdc.gov/pcd/issues/2015/14_0346.htm
- among participants who were below the median in mathematical ability, the majority said they preferred gold plans over bronze plans, regardless of which plan was labeled as gold.
- Christakis and Fowler (2007) is a well-known study of over 12,000 individuals tracked over the course of more than 30 years, which finds clear evidence that the spread of obesity can come through social ties. The risk of an individual becoming obese increased by 57 percent if a friend became obese in a given timeframe. Cochrane Review of 66 studies: no meaningful benefits
- Christakis and Fowler (2007) is a well-known study of over 12,000 individuals tracked over the course of more than 30 years, which finds clear evidence that the spread of obesity can come through social ties. The risk of an individual becoming obese increased by 57 percent if a friend became obese in a given timeframe. Cochrane Review of 66 studies: no meaningful benefits
- For instance, a famous experiment showed that when half the class was randomly allocated coffee mugs and then all students were asked how much they were willing to pay for the mug (if they did not have one) or how much they were willing to accept for the mug (if they had one), those with mugs demanded much higher payments than the students without mugs were willing to pay (Kahneman, Knetsch and Thaler, 1990). A real-world example of loss aversion in action is the tendency of many people to prefer lower-deductible, higher-premium insurance plans at a rate that is not predicted by risk aversion and the rational model alone: they overpay to avoid losses down the road The vast majority (83%) of homeowners in the sample paid for this extra coverage. The prototypical homeowner in the sample paid $100 to reduce the deductible from $1000 to $500. Yet with claim rates under 5%, this additional coverage was worth less than $25 in expectation. It is possible to calculate how much each lower-deductible customer would have saved or lost ex-post had they instead held the $1000 deductible. On average these customers paid Öve times more than the extra insurance provided by a lower deductible was worth.
- For instance, a famous experiment showed that when half the class was randomly allocated coffee mugs and then all students were asked how much they were willing to pay for the mug (if they did not have one) or how much they were willing to accept for the mug (if they had one), those with mugs demanded much higher payments than the students without mugs were willing to pay (Kahneman, Knetsch and Thaler, 1990). A real-world example of loss aversion in action is the tendency of many people to prefer lower-deductible, higher-premium insurance plans at a rate that is not predicted by risk aversion and the rational model alone: they overpay to avoid losses down the road
- For instance, a famous experiment showed that when half the class was randomly allocated coffee mugs and then all students were asked how much they were willing to pay for the mug (if they did not have one) or how much they were willing to accept for the mug (if they had one), those with mugs demanded much higher payments than the students without mugs were willing to pay (Kahneman, Knetsch and Thaler, 1990). A real-world example of loss aversion in action is the tendency of many people to prefer lower-deductible, higher-premium insurance plans at a rate that is not predicted by risk aversion and the rational model alone: they overpay to avoid losses down the road
- Active Choice: Select explicitly whether they preferred to remain in retail or switch to home delivery Kahneman (2011) describes the priming effect as, if you have recently heard or been exposed to the word EAT, then you are temporarily more likely to fill in the following missing letter to SO_P as SOUP. On the other hand, if you had just heard or read the word WASH, you are more likely to fill this word in as SOAP. Johnson and Goldstein (2004) show that rates of willingness to donate organs approach 100 percent in Austria but 12 percent in neighboring Germany, and 86 percent in Sweden versus just four percent in Denmark. The large differences are due primarily to what the default option is, and people failing to move away from the default; in places where the default is to presume somebody is willing to donate (an opt-out system), rates are higher. In the study, the authors would first spin a wheel of fortune that was made to stop only at the values 10 and 65. They would then ask their students in a classroom whether the share of African nations in the UN was bigger or smaller than the number on the wheel; next, they would ask the students for their best guess as to the correct percentage of African nations in the UN. The average estimates of those who saw 10 and 65 were 25 percent and 45 percent, respectively, clearly suggesting that even meaningless anchors matter. diminishing sensitivity, people tend to be more sensitive to the difference between $100 and $200 than between $900 and $1000
- Active Choice: Select explicitly whether they preferred to remain in retail or switch to home delivery Kahneman (2011) describes the priming effect as, if you have recently heard or been exposed to the word EAT, then you are temporarily more likely to fill in the following missing letter to SO_P as SOUP. On the other hand, if you had just heard or read the word WASH, you are more likely to fill this word in as SOAP. Johnson and Goldstein (2004) show that rates of willingness to donate organs approach 100 percent in Austria but 12 percent in neighboring Germany, and 86 percent in Sweden versus just four percent in Denmark. The large differences are due primarily to what the default option is, and people failing to move away from the default; in places where the default is to presume somebody is willing to donate (an opt-out system), rates are higher. In the study, the authors would first spin a wheel of fortune that was made to stop only at the values 10 and 65. They would then ask their students in a classroom whether the share of African nations in the UN was bigger or smaller than the number on the wheel; next, they would ask the students for their best guess as to the correct percentage of African nations in the UN. The average estimates of those who saw 10 and 65 were 25 percent and 45 percent, respectively, clearly suggesting that even meaningless anchors matter. diminishing sensitivity, people tend to be more sensitive to the difference between $100 and $200 than between $900 and $1000
- Chlorine tablet example Active Choice: Select explicitly whether they preferred to remain in retail or switch to home delivery Kahneman (2011) describes the priming effect as, if you have recently heard or been exposed to the word EAT, then you are temporarily more likely to fill in the following missing letter to SO_P as SOUP. On the other hand, if you had just heard or read the word WASH, you are more likely to fill this word in as SOAP. Johnson and Goldstein (2004) show that rates of willingness to donate organs approach 100 percent in Austria but 12 percent in neighboring Germany, and 86 percent in Sweden versus just four percent in Denmark. The large differences are due primarily to what the default option is, and people failing to move away from the default; in places where the default is to presume somebody is willing to donate (an opt-out system), rates are higher. In the study, the authors would first spin a wheel of fortune that was made to stop only at the values 10 and 65. They would then ask their students in a classroom whether the share of African nations in the UN was bigger or smaller than the number on the wheel; next, they would ask the students for their best guess as to the correct percentage of African nations in the UN. The average estimates of those who saw 10 and 65 were 25 percent and 45 percent, respectively, clearly suggesting that even meaningless anchors matter. diminishing sensitivity, people tend to be more sensitive to the difference between $100 and $200 than between $900 and $1000
- Chlorine tablet example Active Choice: Select explicitly whether they preferred to remain in retail or switch to home delivery Kahneman (2011) describes the priming effect as, if you have recently heard or been exposed to the word EAT, then you are temporarily more likely to fill in the following missing letter to SO_P as SOUP. On the other hand, if you had just heard or read the word WASH, you are more likely to fill this word in as SOAP. Johnson and Goldstein (2004) show that rates of willingness to donate organs approach 100 percent in Austria but 12 percent in neighboring Germany, and 86 percent in Sweden versus just four percent in Denmark. The large differences are due primarily to what the default option is, and people failing to move away from the default; in places where the default is to presume somebody is willing to donate (an opt-out system), rates are higher. In the study, the authors would first spin a wheel of fortune that was made to stop only at the values 10 and 65. They would then ask their students in a classroom whether the share of African nations in the UN was bigger or smaller than the number on the wheel; next, they would ask the students for their best guess as to the correct percentage of African nations in the UN. The average estimates of those who saw 10 and 65 were 25 percent and 45 percent, respectively, clearly suggesting that even meaningless anchors matter. diminishing sensitivity, people tend to be more sensitive to the difference between $100 and $200 than between $900 and $1000
- Upfront qualitative work – a lot of work, but it makes sure you’re answering the right questions Kahneman (2011) describes the priming effect as, if you have recently heard or been exposed to the word EAT, then you are temporarily more likely to fill in the following missing letter to SO_P as SOUP. On the other hand, if you had just heard or read the word WASH, you are more likely to fill this word in as SOAP. Johnson and Goldstein (2004) show that rates of willingness to donate organs approach 100 percent in Austria but 12 percent in neighboring Germany, and 86 percent in Sweden versus just four percent in Denmark. The large differences are due primarily to what the default option is, and people failing to move away from the default; in places where the default is to presume somebody is willing to donate (an opt-out system), rates are higher. In the study, the authors would first spin a wheel of fortune that was made to stop only at the values 10 and 65. They would then ask their students in a classroom whether the share of African nations in the UN was bigger or smaller than the number on the wheel; next, they would ask the students for their best guess as to the correct percentage of African nations in the UN. The average estimates of those who saw 10 and 65 were 25 percent and 45 percent, respectively, clearly suggesting that even meaningless anchors matter. diminishing sensitivity, people tend to be more sensitive to the difference between $100 and $200 than between $900 and $1000
- Kahneman (2011) describes the priming effect as, if you have recently heard or been exposed to the word EAT, then you are temporarily more likely to fill in the following missing letter to SO_P as SOUP. On the other hand, if you had just heard or read the word WASH, you are more likely to fill this word in as SOAP. Johnson and Goldstein (2004) show that rates of willingness to donate organs approach 100 percent in Austria but 12 percent in neighboring Germany, and 86 percent in Sweden versus just four percent in Denmark. The large differences are due primarily to what the default option is, and people failing to move away from the default; in places where the default is to presume somebody is willing to donate (an opt-out system), rates are higher. In the study, the authors would first spin a wheel of fortune that was made to stop only at the values 10 and 65. They would then ask their students in a classroom whether the share of African nations in the UN was bigger or smaller than the number on the wheel; next, they would ask the students for their best guess as to the correct percentage of African nations in the UN. The average estimates of those who saw 10 and 65 were 25 percent and 45 percent, respectively, clearly suggesting that even meaningless anchors matter. diminishing sensitivity, people tend to be more sensitive to the difference between $100 and $200 than between $900 and $1000