Ezekiel J. Emanuel, Peter A. Ubel, Judd B. Kessler, Gregg Meyer, Ralph W. Muller, Amol S. Navathe, Pankaj Patel, Robert Pearl, Meredith B. Rosenthal, Lee Sacks, Aditi P. Sen, Paul Sherman, and Kevin G. Volpp
E. J. Emanuel, P. A. Ubel, J. B. Kessler et al., “Using Behavioral Economics to Design Physician Incentives that Deliver High-Value Care,” Annals of Internal Medicine, published online Nov. 24, 2015.
A number of health systems and provider organizations are turning to behavioral economics to encourage doctors to follow evidence-based guidelines and deliver better-coordinated care to their patients. Many are seeing promising results, although more evaluation is needed to identify the most effective physician incentive designs.
The field of behavioral economics is built on the premise that human behavior is not always rational. Our decisions are often shaped by recognizable foibles, including a tendency to give greater weight to potential losses than to gains, and a desire to maintain the status quo even when it does not serve our interests. Such principles have been harnessed to alter retirement planning and savings decisions but are infrequently applied to health care, despite their potential to redirect physicians’ and patients’ behavior.
The authors of this Commonwealth Fund–supported study focus on nine behavioral economics principles that are most relevant to influencing physicians’ practice patterns and performance—among them, loss aversion, choice overload, and relative social ranking.
Health care organizations are increasingly entering into contracts that reward them for improving outcomes and reducing spending. But they often struggle to translate these goals into effective incentive programs for physicians making the decisions that are key to achieving cost savings and quality improvements. Monetary incentive programs fail to account for the way emotions and social status, among other variables, factor into providers’ decisions.
Insights from behavioral economics can help health care organizations engage providers by working with human limitations rather than fighting against them.