We have announced our second Call for Proposals in the field of behavioral economics. We’re actively seeking ideas that will help us to better understand how to discourage the consumption of low-value health services — those that provide more harm than benefit or which provide only marginal health benefits. In addition to improving health outcomes, this knowledge could contribute to lowering health care costs for us all.
Behavioral economics is an area of study by which I’ve personally grown increasingly intrigued and in which the Foundation has recently begun to invest. We all know, for example, that we need to exercise, eat right and be actively engaged in our own health care. But we don’t always do what we know we should do; knowing the “right” decision to make does not guarantee that we make that decision. The goal of behavioral economics is to uncover insights that could enable people to make better — more “rational” — choices for their health.
It’s not a given that the behavioral economic-driven solutions that have been shown to, for example, increase 401k savings will prove to be true when applied to the challenges of health and health care. But it’s a risk we want to take because we sincerely believe — if it does — that it could lead to the profound social impact that the Pioneer Portfolio, and the Robert Wood Johnson Foundation as a whole, is seeking.
Continue reading “RWJF Call for Proposals: Pioneering Use of Behavioral Economics”
Filed Under: THCB
Tagged: behavioral economics, Lori Melichar, RWJF, RWJF Pioneer
Mar 20, 2013
On occasion, your correspondent fights the northeast’s dreary weekend winter evenings with a dram of spirituous liquor like Macallan 12. Unlocked with a small splash of water and a single ice cube, a generous ounce of that pungent cinnamon leathery elixir turns the cold into cozy.
So naturally, your correspondent relies on spouse to help keep a therapeutic stock available. Both yours truly and spouse run errands and it shouldn’t be too hard for either to be proactive by periodically checking supplies, buying some Macallan when necessary and avoiding the unhappiness of a dispirited and cold author.
Unfortunately, spouse doesn’t always see it that way.
Welcome to the complicated world of behavioral economics. It tells us that it’s difficult for persons to expend effort today to reduce the tomorrow’s risk of an unlikely event. It’s why many persons chose to not take or pay for medications today to reduce the distant likelihood of disability or early death. There’s more on the topic here.
This also explains why persons don’t do a good job getting a flu shot for themselves or their loved ones. Check out this interesting information from athenahealth. According to their pooled electronic health record (EHR) data, 2.5% of children without a flu shot came down with the flu, versus only 0.9% of those who got the shot. While getting a shot reduced the relative risk of coming down with the disease by approximately two thirds, the vast majority of kids who went without immunization (97.5%) did OK. Data from the CDC in adults reflects the same kind of numbers: 80% of persons in the U.S. do not come down with the flu in the course of the year.
How can the population health and care management community leverage behavioral economics to increase immunization rates?
Continue reading “Behavioral Economics and Influenza Immunization”
Filed Under: Health Plans
Tagged: behavioral economics, Immunization Rates, Incentives, Influenza, Jaan Sidorov, Macallan approach, Population Health Management, Preventive medicine, risk prediction, Uncle Joe Fallacy
Feb 10, 2013
Researchers at USC recently published a study designed to find out how much people are willing to pay for better drug coverage from their health insurance plan. The question they posed to the general public was straightforward: How much extra money would you pay per month for a health insurance plan that would pay for “specialty drugs” if you need them?
Specialty drugs are expensive new treatments for diseases like leukemia, multiple sclerosis and rheumatoid arthritis. These drugs often cost tens of thousands of dollars, and in some cases even run into six figures per patient. But these high costs can be accompanied by significant benefit. Gleevec for example can dramatically increase life expectancy for people with otherwise fatal leukemia.
Keep in mind that not only are specialty drugs expensive but they are being used with increasing frequency. According to the USC team, 3 out of 100 people in the United States will use at least one specialty drug in the following year.
How much would you pay to make sure you aren’t responsible to pay for these drugs out of pocket? Would you be willing to give your insurance company an extra $5 per month? $10? Maybe even $20?
The USC team found that, on average, people were willing to spend around $13 extra per month to make sure their health insurance plans cover such specialty drugs. (The study was published in the April issue of Health Affairs, and was led by John Romney.) To put that into perspective, the actuarial cost of such coverage—how much insurance companies would expect to spend per person if everyone obtained such coverage—is around $5 per month.
Continue reading “Is Health Insurance Too Cheap?”
Filed Under: The Insider's Guide To Health Care
Tagged: behavioral economics, Featured, Gleevec, Health insurance, leukemia, Peter Ubel, Smart Medicine, specialty drugs, survey methodology, Surveys, USC, willingness to pay
Mar 30, 2012