Patients, Ostriches, and Psychology: How Behavioral Economics Can Inform Your Practice

Traditional economic theory states that we’re rational consumers who act out of educated self-interest. Behavioral economics counteracts this, instead examining our “limited rationality, social preferences, and lack of self-control” to see how these shortcomings affect our decision-making and market outcomes. What they’ve found is that we may not be rational, but we are predictable.
So why are economists just now figuring out what doctors have known all along? After all, don’t patients frequently work against their own self-interests?
Human error and noncompliance are physicians’ arch nemeses. Patients — and physicians themselves sometimes — don’t take their prescriptions, don’t wear seatbelts, don’t exercise, don’t sleep enough, smoke cigarettes, eat too much, eat too little … The number of easily overlooked and unquestionably healthy actions is too long to list.
“That distinction between behavior and education is a critical one and one we so often miss in healthcare,” says David Asch, MD, MBA. “We have a model … that people are rational and that, if you give them enough information, they’ll change.” We actually rely on behavioral reflexes more than rational thought, and these reflexes translate into mental distortions that can work against patient interests.

Case Study: Ostriches and the “Big C”

One study in particular observed how a group of women’s inclination to receive a mammogram changed after learning that a coworker was diagnosed with breast cancer. The goal of the study was to observe how an awareness of negative health outcomes affected future health decisions.  Researchers analyzed nearly 3,000 American women, between the ages of 50 and 64, whose employer provided complimentary mammogram screenings. Initially, the service was utilized by 70 percent of participants. However, following a coworker’s diagnosis of breast cancer, that rate dropped to 64 percent and stayed at that level for two years.
Why the dip? Shouldn’t the baseline remain steady or increase?
Concepts from behavioral economics come into play here. Foremost is the “availability heuristic.” A heuristic is a mental shortcut in which we use rules of thumb instead of logic to measure or assess situations. This shortcut inclines us to use stories that are easy to recall — or, “available” — when making decisions. Since participants had a coworkers’ malignant diagnosis on their minds, they unconsciously jumped to the conclusion that they too may have breast cancer, and rather than confront that potential fate, decided to remain in the dark.
Shankar Vedantam, host of NPR’s podcast Hidden Brain, notes how this reaction epitomizes the “ostrich effect” in which, rather than confront possibly negative news, people avoid information altogether. You likely have patients who act in the same predictably irrational way. For example, take patients who avoid annual visits or, even worse, cancel last-minute. Even though regular visits are correlated with better health, many patients still have an aversion to visits for fear of a negative diagnosis, one that might result in medical debt or a painful procedure. These pessimistic predictions deter patients from visiting altogether.
This tendency to avoid information or action is another way we work against our own best interests. This is called the “status quo bias” and indicates times when we routinely ignore the fact that things change and that more knowledge and proactive decisions are the best ways to handle change.

How Can You Leverage Behavioral Economics to Boost Your Practice

You undoubtedly see these illogical behaviors in your patients; it’s human nature. We oftentimes display a bias in which we prioritize the immediate inconveniences over future benefits. For example, while many patients conceptually understand the value of the doctor-patient relationship and routine medical visits, the long-term benefits of those are difficult to gauge. After all, how can one imagine what it feels like to be healthy 20 years from now?
The abstract feeling of healthiness down-the-road can lead to no-shows and is regularly dismissed in favor of saving the copay, avoiding the hassle of commuting, and receiving some potentially bad news. Primary care physicians experience the most no-shows, and averaging a $196 loss per skipped appointment — often with multiple missed visits per day — these routine occurrences are a major drain on revenue.
However, there are ways to account for and overcome patients’ hardwired biases and shortcomings as decision makers. This will help you avoid no-shows. Understanding behavioral economics is the first step, another is to read our free, interactive white paper by clicking here.