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Chapter foundations of PH

Foundations of public health

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14 views24 pages

Chapter foundations of PH

Foundations of public health

Uploaded by

markesee
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Chapter 20: Behavioral

Economics and Health


Overview

 Introduction

 Behavioral Economics

 Application

 Future Directions and Summary


Introduction
Introduction
• Non-communicable diseases account for
approximately 2/3 of deaths worldwide
– These diseases are primarily driven by behavioral
choices
– Health care advances, such as screening,
immunizations, and medical management have poor
adherence

• There is a large gap between what is theoretically


achievable and what is actually achieved
Introduction

• Many approaches to modify individuals,


environments, and policies to promote
health assume that healthcare decisions
are rationally-based economic transactions

– There is an assumption that the magnitude of


the incentive is more important than the
design, frequency, saliency, and framing of
the incentive
Introduction

• Behavioral economics focuses on how to


design interventions (including incentives)
based on how real people actually make
decisions, rather than on how perfectly
rational people ought to make decisions

– Behavioral economics takes the view that poor


decisions are errors, unlike traditional
economics which views poor decisions as
reflections of a hidden rational choice
Behavioral Economics
Neoclassical Economics
• To understand behavioral economics, it is important
to first understand neoclassical economics

• Neoclassical economics relies on expected utility


theory, which presumes that individuals make
rational decisions based on calculations of the
highest net present value
• However, neoclassical economics has limitations, including
presuming that people:
– Are fully rational
– Are primarily driven by self-interest
– Have stable preferences
Behavioral Economics

• Behavioral economists have described


how people’s decisions differ from the
standard neoclassical economic model

• Behavioral economics draws on Prospect


Theory, which provides a framework for
understanding behaviors that are not
explained by expected utility theory
Behavioral Economics

• How people feel about possible outcomes


depends on their starting point
– Having $5 million today when you had
$100,000 yesterday versus having $5 million
when you had $7 million yesterday

• People have a diminished sensitivity to


both gains and losses, depending on the
starting point
Behavioral Economics

• People tend to be more risk adverse when it


comes to gains, but more risk seeking when
it comes to losses
– Framing as a loss or gain may have a large
influence on behavioral decisions
• Asymmetric paternalism: attempting to
protect people without limiting freedom of
choice
– E.g.: When healthier foods are placed before
unhealthy choices in a cafeteria buffet
A Framework for Thinking about
Behavioral Economics

• Incentives
– How incentives are delivered can matter more
than their magnitude
• E.g.: The frequency can matter more than the
amount

• Present-bias
– The motivational impact of rewards and
punishments is increased when they are
immediate
A Framework for Thinking about
Behavioral Economics

• Over-optimism and Loss Aversion


– Over-optimism: being over-optimistic about
life outcomes, especially regarding self-
control
– Loss aversion: tendency to put greater weight
on losses than on similarly-sized gains
A Framework for Thinking about
Behavioral Economics

• Peanuts Effect
– Small gains or losses are not motivating
• Better to provide frequent feedback on rewards due to
present-bias, but better to bundle the delivery of
financial rewards

• Regret Aversion
– Anticipated regret can affect a variety of
preventative behaviors
• People who experienced illness show an increase in
vaccine uptake after illness
A Framework for Thinking about
Behavioral Economics

• Default Bias
– The tendency to continue doing what we have
been doing, even when superior alternatives
exist

• Rational-World Bias
– The assumption that people’s choices are
considered and rational
• An error in creating programs or policies related to
health
Application
Application: Medication Adherence

• At least 1/3 of patients do not adhere to medical


regimens

• A series of studies were conducted to see how


daily lottery-based financial incentives may
improve medical adherence
– Two pilot tests were run with a daily incentive
values of $3 or $5
– Patients needed to comply with their daily blood
thinner medication in order to receive the incentive
Application: Medication Adherence

• Pilot study results:


– Both amounts improved medical adherence similarly
– $5 day group: 97.7% adherence with incentives versus
22% historic adherence

• Intervention was scaled to a 2-arm RCT


– Results: no impact of the lottery incentive among those
with well-controlled anticoagulation at baseline
– Study highlighted the importance of targeting interventions
to non-adherent patients
– It was hard to distinguish if effects were due to the
incentive or the daily reminder that patients received
Application: Medication Adherence

• Lesson learned: to affect a behavior that


occurs frequently, you need to engage the
person at nearly the same frequency

– Example: if you want to influence daily


medication adherence, (near) daily contact is
recommended
Future Directions
and Summary
Future Directions

• Value-based insurance design


– Involves discounting services high in value

– Inspired by research showing that higher


insurance copays reduced the use of services
such as prescriptions, and ultimately increased
costs

– Lowering cost sharing for high-value activities may


increase adherence and reduce long-term costs
Future Directions

• Value-based insurance design


– The Affordable Care Act includes value-based
insurance design
• Preventative services must be offered at no charge

– However, there is no strong evidence that


value-based insurance designs are effective
• Changes resulting from intervention studies have
been small
Summary

• Behavior change and health policies


should not be structured around rational
models of behavior

• Behavioral economics offers a framework


for prevention, through the development
and testing of innovations to keep people
healthy
Summary

• Setting defaults to favor health promotion


may gently lead people toward individual
and population behavior change
– Behavioral economics be utilized by public
and private sector organizations
• Example: Employers making it easier to take the
stairs than the elevator

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