Moving Beyond Nudges to Improve Health and Health Care Policies

August 16, 2017

By Shilo Rea

With countries around the world struggling to deliver quality health care and contain costs, a team of behavioral economists led by Carnegie Mellon University’s George Loewenstein believes it’s time to apply recent insights on human behavior to inform and reform health policy.

A report published in Behavioral Science & Policy outlines how behavioral science could be used to improve the quality and cost effectiveness of American health care. To do this, the research team argues that policies targeting individual behaviors—nudges—need to be augmented with more far-reaching and systemic interventions.



The report proposes interventions based on the most promising applications of behavioral insights, including ways to encourage individuals to pursue healthier lifestyles and enroll in suitable insurance plans. Recommendations for employers feature ways in which they can design and test corporate wellness plans and what insurance plans they should offer to their employees. Advice for insurers and health practitioners focuses on promoting cost-effective treatments and dissuading the use of ineffective procedures; and policymakers will find ideas for increasing organ and other medical donations and improving end-of-life care.



Physician offices around the country are adopting electronic medical records. These offer particularly promising opportunities to discourage ineffective use of antibiotics and encourage the use of equivalent but cheaper treatments, like the use of generics.



“There can be no real progress on healthcare without tackling the problem of costs,” said Loewenstein, the Herbert A. Simon University Professor of Economics and Psychology and co-founder of the behavioral economics field. “But what is often lost is that cost reduction does not mean depriving people of the care they need. In fact, many commonly performed and costly surgeries can make patients worse off.”



Another major focus of the report is on how to reduce the prevalence of unhealthy behaviors, such as smoking and poor diet, which collectively account for nearly 40 percent of premature deaths in the U.S. Researchers have tested behaviorally-inspired interventions, including incentive programs, but the results have often been short-lived. Responding to the lack of programs of proven effectiveness, the report outlines the kind of research that is needed to advance the science of behavior change.



“The belief that big problems require grandiose solutions can be debilitating,” said David Hagmann, a Ph.D. student in the Department of Social and Decision Sciences. “We do need to think big, but we should also be targeting big problems with smaller, evidence-based interventions. Cigarette taxes alone, for example, cannot explain the decline in smoking over the past decades. But they signaled that the behavior harmed the smoker and others nearby and, in combination with restrictions on advertising and smoking in public spaces, led to a cultural change in how smoking is viewed, and to major changes in behavior.”



Simply increasing the share of resources devoted to health care does not guarantee better outcomes. In 2016, $1 trillion was spent on unnecessary and ineffective care. At the same time, 28 million nonelderly Americans currently lack insurance and with it access to care that could substantially improve their health. Improving the administration of health insurance—simplifying health insurance to make it more understandable, and reducing the burden and complexities of signing up for health insurance – is one of the many ways that behavioral insights could lead to better medical care.



“A key feature of behavioral insights is that they are often cost-neutral or cost-saving to implement. Leveraging behavioral insights as we continuously modify and create health policy can help bring the efficiency and cost savings that our healthcare system will always need,” said Janet Schwartz, assistant professor of marketing and Tulane University.



Health care reform has been a vexing political issue in the United States and around the world. Costs are increasing at alarming and unsustainable rates even in countries in which the government targets cost containment. This report presents a new, evidence-based, and nonpartisan avenue for delivering effective medical care. The policy recommendations suggest ways to improve the health and wellbeing of people at the same or reduced cost, while guidance for policymakers on how to better enable research in the health domain could lead to many more insights in the years to come.



CMU’s Saurabh Bhargava, Boston University’s Keith Ericson, University of Pennsylvania’s Judd B. Kessler, Baylor College of Medicine’s Jennifer Blumenthal-Barby, New York University’s Thomas D’Aunno, the University of California, Berkeley’s Ben Handel and Jonathan Kolstad, University of Chicago’s David Nussbaum, University of Missouri’s Victoria Shaffer, Dartmouth College’s Jonathan Skinner, Duke University’s Peter Ubel and the University of Michigan’s Brian J. Zikmund-Fisher also contributed to the report.