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Applying behavioral economics to patients and providers


Financial incentives alone aren’t enough to drive behavioral change in patients and providers, says this piece in HealthcareDIVE.

Among the observations: “Behavioral economics suggests patients respond more strongly to incentives that are apparent immediately. In this study, incentives were somewhat hidden. For the delayed {insurance} premium adjustment group, the financial benefit wouldn’t be apparent for months. Even for the immediate premium adjustment group, incentives were distributed with regular paychecks. To make a program like this more effective, researchers suggested sending a separate check to participants along with a progress report. The incentive is salient when it is distinct from regular compensation, according to researchers.

“Another principle of behavioral economics suggests individuals react more strongly to incentives when they are framed as losses rather than gains. In a separate CHIBE study, published March 2016 by Annals of Internal Medicine, this theory held up.

“In this study, participants in a workplace wellness program were tasked with walking 7,000 steps per day over a 26-week period. Participants were …divided into four study groups. A control group received no financial incentive, a lottery group that offered a possible prize averaging $1.40 each day the goal was achieved, a gain group that received $1.40 for every day the goal was reached, and a loss group in which participants were given $42 at the start of each month with the catch that they would have to return $1.40 for each day the goal was not reached.

“Results to the study showed that the gain group and the lottery group performed similarly to the control group. Participants in these groups achieved the daily goal around 30% to 35% of the time. Participants in the loss group, on the other hand, achieved the daily goal 45% of the time.”

“The principle of loss aversion applies to providers the same as it applies to patients. Authors of the Annals of Internal Medicine article point to the Massachusetts General Physicians Organization (MGPO) incentive program as an example. This quality improvement program issued advance incentive payments so that it would feel like a loss to not receive the payments in subsequent years. {A}n October 2013 article in Health Affairs asserted the application of loss aversion helped to drive the program’s eventual success.”

“People generally care about how they compare to their peers and providers are no different. For instance, Dean Clinic in Wisconsin found that providers were more likely to change their behavior when monthly performance reports identified physicians within a department compared to when they released anonymous rankings. ”

To read the entire article, please hit this link.

Humana using using more behavioral economics



Humana, the big insurance company, is using lessons of behavioral economics to improve the wellness of its covered population in the hope of reducing claims and raising its profit margin.

As FierceHealthcare noted, citing an article in Insider Louisville: “Equipped with the knowledge that, in general, people make bad decisions even when they know those decisions are harmful, Humana is testing out new ways to change patient behavior when it comes to health habits…..”

For example, “Recently the company discovered that customers responded better to calls from their pharmacist and celebrities like The Brady Bunch actress Florence Henderson reminding them to take medication as prescribed. In another experiment, Humana discovered that synchronizing prescription refills led to improved adherence for patients taking multiple medications.

“Previously, insurers have used financial incentives as a primary motivator for improving wellness, but studies show that approach doesn’t always work. By using behavioral economics, Humana accounts for other psychological and emotional factors that could be more effective in steering patients in the right direction.”

To read a FierceHealthcare piece on  this, please hit this link.

To read the Insider Louisville story on this, please hit this link.

Unconscious biases against healthcare innovation


A HealthAffairs piece looks at why healthcare innovation in the U.S. is so slow.

Jaan Sidorov, the author, notes that “many health system executives struggle with reconciling innovation with the downsides of abandoning existing business models and disrupting long-standing culture and workflows.”

“Advocates for innovation also note that responsibility for fostering innovation also includes health care organizations’ boards of directors. Yet, boards are grappling their own governance challenges and, since many directors may not have experience in the healthcare sector, they may also be unfamiliar with the underlying market drivers and specialized technologies that often underlie innovation.”

The article notes some things that could help:

  1. “Addressing downside risks. For example, an initial rollout can be restricted to a limited number of enrollees who are mostly likely to benefit, followed by expansion of the program only if measurable mileposts are achieved.
  2. “Including measures of early leading indicators of impact.
  3. “Recognizing that there often non-financial and non-clinical impacts, including the prospect of improving the Triple Aim experience of care and enhancing the organization’s reputation in a competitive marketplace.
  4. “Citing examples of the success of similar technology in other settings.
  5. “Avoiding subtle program descriptors (such as “research”) that could prompt unwarranted skepticism.
  6. “Reviewing all the just-published or Web-based information on the status of similar initiatives.”

The article sums up:

“One reason for the slow pace of innovation in U.S. healthcare may be the unconscious biases that have been described in behavioral economics. As innovators work with understandably reluctant executives and boards, it’s wise to not only describe a compelling business and clinical case, but to be prepared to address the mental errors that can otherwise undermine a good idea. ”

To read the HealthAffairs piece, please his this link.

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