Cass Sunstein opened the 2014 Behavioral Economics, Law, and Health Policy Conference with a keynote address called “Choosing Not to Choose.”
His talk set the tone for the two-day conference organized by The Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard Law School, which drew nearly 200 lawyers, public health professionals, economists, and health policy analysts to the campus from May 2-3.
“It’s often best to honor and not disparage people’s choice not to choose,” Sunstein, Harvard’s Robert Walmsley University Professor and a Professor on the law faculty, said.
To many, the most appealing form of “choice architecture” is active choice, Sunstein said. They argue that “choice-making is a muscle, and we don’t want to let it atrophy,” Sunstein said.
However, he argued, sometimes people “choose not to choose,” and that choice should also be respected. “When people prefer not to choose, many private and public institutions are nonetheless requiring them to,” he said. In that instance, forcing them to make a choice is paternalistic.
“Many people want not to choose,” Sunstein said. It could be because the choice is troublesome to them, they have limited bandwidth to make a choice, they may not want to take the responsibility; or they might be aware of their own limited knowledge of the subject. “When people prefer not to chose, many private and public institutions are nonetheless requiring them to choose. In that instance, active choosing is paternalistic,” Sunstein said.
He suggested that an option is “simplified active choosing,” in which people are told that they have an active choice, but can opt out of making it. “If you want to choose to choose, you choose to choose,” he said.
“Active choosing is an overrated way of tracking people’s actual preferences,” Sunstein said. While some people might be willing to pay a premium to have the power to choose themselves, others would be willing pay a premium to have someone else choose for them. This could occur when people have to make complex decisions, such as choosing a health plan or a retirement plan or the proper course of treatment for a grave illness.
“A promising approach is to ask people to make an active choice, but have a default,” Sunstein said. This would simplify active choosing, minimize error cost, and protect autonomy.
Also on the first day of the conference, HLS Dean Martha Minow introduced the lunchtime plenary speaker, Harvard University Provost Alan M. Garber. “Long before it was common to combine economics and the study of healthcare, Alan Garber did so,” Minow said. Garber is also the Mallinckrodt Professor of Health Care Policy at Harvard Medical School; Professor of Economics in the Faculty of Arts and Sciences’ Professor of Public Policy at the Harvard Kennedy School of Government; and Professor in the Department of Health Policy and Management at the Harvard School of Public Health. Garber’s talk asked the question, “Can behavioral economics save healthcare reform?”
Underlying that question is an understanding of what healthcare reform is intended to accomplish. Garber said its aim is twofold: improving health and reducing cost. “Usually the fatal flaw in every health reform is it is simply too costly,” Garber said.
The federal budget deficit will continue to grow, driven largely by Social Security and Medicare, he said. The Affordable Care Act (ACA) has several features to grapple with Medicare costs. (Garber noted that although he was not involved with drafting the ACA, he helped create previous healthcare reform plans.) Some of the most promising features of the ACA, he said, are a shift to bundled payments, insurance exchanges, and Medicare expansion.
Adverse selection is important to understand in any plan, like the ACA, that give consumers choice, Garber said. The usual way to deal with this is to “risk adjust” – to force people to enroll and spread the risk across plans; the sickest individuals often choose the most generous plans.
The second major problem to address is “moral hazard.” If a service is subsidized, he said, people often consume more of it than they should. Cost sharing, such as copayments, is one way to address this. However, it doesn’t always work as intended, Garber said. For example, if people had a $10 copayment for a hypertension drug that provided $100 worth of benefit, an increase in price to $25 would not be expected to reduce their consumption of the drug, but it does. “People no longer believe that using traditional cost-control tools is really the best way to go,” he said.
Financial incentives work, but they may not be the best tools in every situation. Instead, “social norms can be powerful,” Garber said. When Massachusetts introduced its health care reforms in 2006, there was a public campaign to make it seem to everyone that to be a good citizen you have to get health insurance. Physicians can also be guided by professional norms not to overprescribe care.
Garber concluded by saying that across the healthcare spectrum, reformers can nudge people to do the right thing, taking note of the “extraordinary effectiveness of what seem to be fairly small tweaks.”
For example, in treatment of a complex disease like diabetes, there is a disproportionate benefit from devising therapies that are very easy to follow. Instead of multiple insulin injections each day, simple alternative regimens are easier for people to follow. The lesson from diabetes treatment applies to all kinds of care, Garber said. “If you make the right thing easier to do, it will be adopted.”
Keynote: Cass Sunstein, Robert Walsley University Professor, Harvard Law School
“Choosing Not to Choose”
- Yashar Saghai, Post-Doctoral Fellow, Director of Global Food Ethics Project, John Hopkins University – Public Health Nudges and the Principle of the Least Restrictive Alternative
- Jennifer Blumenthal-Barby, Assistant Professor, Baylor College of Medicine Center for Medical Ethics and Health Policy, Greenwall Faculty Scholars Program (with Zainab Shipchandler and Julika Kaplan, Rice University) – Incentives as “Nudges” for Childhood Vaccination in Rural India
- Nir Eyal, Associate Professor, Harvard Medical School – When is nudging just fine, and why?
- Jonathan Gingerich, Ph.D. student, Department of Philosophy, UCLA – The Political Morality of Nudges
- Moderator: Holly Fernandez Lynch, Executive Director, Petrie-Flom Center
Plenary: Alan M. Garber, Provost, Harvard University; Mallinckrodt Professor of Health Care Policy, Harvard Medical School; Professor of Economics, Faculty of Arts and Sciences; Professor of Public Policy, Harvard Kennedy School of Government; and Professor, Department of Health Policy and Management, Harvard School of Public Health
“Can Behavioral Economics Save Healthcare Reform?”
- David A. Hyman, H. Ross & Helen Workman Chair in Law and Director of the Epstein Program in Health Law and Policy, University of Illinois College of Law (with Thomas S. Ulen) – Nudges, Shoves, Pure Paternalism, or Leave Well Enough Alone? Applying Behavioral Economics to Health Law and Policy
- Mark D. White, Professor and Chair of the Department of Philosophy, College of Staten Island, CUNY – Bad Medicine: The Problems with Nudges in Health Care
- Andrea Freeman, Assistant Professor of Law, University of Hawaii at Manoa William S. Richardson School of Law – Behavioral Economics and Food Policy: The Limits of Nudging
- Moderator: I. Glenn Cohen, Faculty Co-Director, Petrie-Flom Center
- Christopher T. Robertson, Visiting Professor of Law, Harvard Law School and Associate Professor, James E. Rogers College of Law, University of Arizona (with David Yokum) – Cost-Sharing as Choice Architecture
- Brigitte Madrian, Aetna Professor of Public Policy and Corporate Management, Mossavar-Rahmani Center for Business and Government, Harvard Kennedy School of Government – Active Choice and Health Care Costs: Evidence from Prescription Drug Home Delivery
- Ameet Sarpatwari, Research Fellow, Brigham & Women’s Hospital, Harvard Medical School (with Niteesh K. Choudhry, Jerry Avorn, and Aaron S. Kesselheim) – Behavioral Economics and Physician Prescribing Practices: Legal and Ethical Considerations in the Use of “Nudges” to Promote Generic Drug Use
- Anupam Jena, Assistant Professor, Harvard Medical School; Assistant Physician, Massachusetts General Hospital (with Jie Huang, Bruce Fireman, Vicki Fung, Scott Gazelle, Mary Beth Landrum, Michael Chernew, Joseph P. Newhouse, and John Hsu) – Asymmetric Responses to Increases and Decreases in Cost-Sharing for Breast Cancer Screening
- Jim Hawkins, Associate Professor, University of Houston Law Center – Towards Behaviorally Informed Policies for Consumer Credit Decisions in Self-Pay Medical Markets
- Moderator: Matthew J. B. Lawrence, Academic Fellow, Petrie-Flom Center
- Aditi Sen, Doctoral Candidate, Department of Health Care Management & Economics, The Wharton School, University of Pennsylvania (with David Huffman, George Lowenstein, David Asch, and Kevin Volpp) – Do Financial Incentives Reduce Intrinsic Motivation for Weight Loss? Evidence from Two Tests of Crowding Out
- Kristen Underhill, Associate Research Scholar in Law, Yale Law School – Crowd Control: Extrinsic Incentives, Intrinsic Motivation, and Motivational Crowding Out in Health Law and Policy
- Moderator: Neel T. Shah, Harvard Medical Faculty Physicians (HMFP) practice; Division of Quality, Safety, and Performance Improvement in the Department of Obstetrics and Gynecology, Beth Israel Deaconess Medical Center (BIDMC); Ariadne Labs for Health Systems Innovation, Harvard School of Public Health
Russell Korobkin, Richard C. Maxwell Professor of Law, UCLA School of Law – The Choice Architecture Problem and Health Care Decisions
- Jennifer Zamzow, Post-Doctoral Fellow, Center for Ethics and Policy, Carnegie Mellon University – Affective Forecasting in Medical Decision-Making: What Do Physicians Owe Their Patients?
- Alexander Capron, University Professor; Scott H. Bice Chair in Healthcare Law, Policy and Ethics; Professor of Law and Medicine, Keck School of Medicine; Co-Director, Pacific Center for Health Policy and Ethics, USC Gould School of Law – Mobile Devices, Small Data, and Personal Healthcare Decisions: Behavioral Economics’ New Frontier and the Law
- Ester Moher, Postdoctoral Fellow, Electronic Health Information Lab, University of Ottawa (with Khaled El Emam) – The Perilous Promise of Privacy: Ironic Influences on Disclosures of Health Information
- Moderator: Robert D. Truog, Professor of Medical Ethics, Anesthesiology, & Pediatrics; Director of Clinical Ethics, Harvard Medical School; Senior Associate in Critical Care Medicine, Children’s Hospital Boston; Executive Director, Institute for Professionalism and Ethical Practice
- Matthew J. B. Lawrence, Academic Fellow, Petrie-Flom Center – Justice by Default: Solving Medicare’s Backlog Problem
- Abigail Moncrieff, Peter Paul Career Development Professor, Associate Professor of Law, BU School of Law (with Manisha Padi) – Libertarians, Cognitive Failures, and Transaction Costs: The Behavioral Case for the Individual Mandate
- Sarah Conly, Lecturer in Law and Philosophy Fellow, The Law School, The University of Chicago – Death Squads, Paternalism, and End of Life Care
- Nina Kohn, Professor of Law, Syracuse University College of Law (with Jeremy Blumenthal) – Improving Health Care Decisions Through a Shared Preferences and Values Approach to Surrogate Selection
- Barbara Evans, Professor of Law and George Butler Research Professor Director, Center on Biotechnology & Law, Affiliated Faculty, Energy, Environment, and Natural Resources Affiliated Member, Baylor College of Medicine Center for Medical Ethics and Health Policy, University of Houston – Preventing Harms to Patients Who Know Too Much About Their Own Genomes
- Moderator: Christopher T. Robertson, Visiting Professor of Law, Harvard Law School and Associate Professor, James E. Rogers College of Law, University of Arizona
Michael Hallsworth, Principal Advisor, The Behavioural Insights Team – Applying Behavioural Insights in Theory and in Practice
- Anna Sinaiko, Research Scientist, Harvard School of Public Health (with Richard Frank and Richard Zeckhauser) – Selection Effects Versus Default Power: The Choices of Terminated Medicare Advantage Clients
- David Tannenbaum, Postdoctoral Fellow, Anderson School of Management, UCLA (with Peter Ditto) – Default Behavior as Social Inference
- Elliot Doomes, Counsel, Subcommittee on Economic Development, Public Buildings, and Emergency Management, U.S. House of Representatives (with Aeva Gaymon Doomes) – How Choice Architecture Can Define a New Era of Providing Mental Health Treatment
- David Orentlicher, Samuel R. Rosen Professor of Law, Co-director of the William S. and Christine S. Hall Center for Law and Health, Indiana University – Presumed Consent to Organ Donation
- Moderator: Gregory Curfman, Executive Editor, NEJM