CQ TODAY ONLINE NEWS
June 3, 2009 – 12:04 a.m.
Health Care Overhaul in All Its Theory
By John Edgell, CQ Guest Columnist
Has trying to follow the attempted health care overhaul made you crazy yet? Feel like you need an hour or two of therapy to avoid paranoia? That’s certainly understandable, but before you reach for the phone to make an appointment with your favorite psychologist — stop!
What you need instead to get a grip is a behavioral psychologist, not a conventional psychologist. The latter may provide you temporary comfort, but the former will give you the enduring wisdom of understanding the motivational techniques of the Obama White House. And while you’re at it, throw in a tutorial or two on behavioral economics, game theory, prospect theory, and prisoner’s dilemma.
The Obama White House, after all, has had considerable success before in motivating the masses through behavioral psychology, of convincing millions of initially skeptical Americans during the 2008 presidential campaign to collectively embrace the still largely undefined concept of “change.” President Obama, a former community organizer, knows how to deploy the ”Nudge Factor,” where “change comes from the bottom up” and “we are the change we have been waiting for.” Indeed, he is a behavioral psychologist’s dream.
So, for now, forget about the daunting statistics of out-of-control health care costs, the growing number of the uninsured, the systemic inefficiencies, or the debilitating consequences on our economy and American families without systemic changes to the health care system. Put aside too the Democrats’ once-in-a-generation political alignment of Obama in the White House and a sizeable majority in the Congress.
What perhaps matters more is an understanding of how behavioral sciences will drive the dynamics of health care overhaul, and there’s no better place to start than the blog of Peter R. Orszag, now White House OMB director.
It was in the blog that Orszag, then director of the Congressional Budget Office, seized the importance that behavioral economics has on the health care delivery system: “A growing body of research on behavioral economics suggests that, in addition to financial incentives, norms and default options can exert a strong influence on individuals’ choices. Such findings could inform efforts to improve efficiency in the health sector.”
Beginning in early 2007, Orszag latched onto the seminal statistical date base and Web site compiled by a Dartmouth University research team and wrote persuasively in terms that resonated with health care policy wonks, industry insiders, and Capitol Hill policymakers. He then leveraged his writings with an effective Power Point presentation that told his story in pictures, coupled with archived video footage.
For example, using Dartmouth’s analysis of Medicare cost data, Orszag wondered why — during the last six months of life — did the average Medicare patient treated at NYU Medical Center stay 27 days, while the average Medicare patient at Stanford Medical Center stay only 10 days. The CBO director made a convincing case that increased spending did not necessarily result in improved patient care, and the Dartmouth findings backed him up: “Perhaps the most counterintuitive finding is that higher spending does not necessarily lead to better access to health care, or better quality of care.”
Indeed Orszag makes a convincing case that significant cost savings can be deployed through “comparative effectiveness research” where health care providers and procedures are tracked for efficiencies and outcomes. Included in the $787 economic recovery package (PL 111-5) was $1.1 billion to compare the outcomes on patient health care from medicines, medical devices, surgical procedures and treatments.
Perhaps it’s the embracing and funding of outcomes research, coupled with a Democratic Congress and the White House with a firm commitment to revamping health care, that has kept health care players such as insurance companies, drug firms, for-profit hospitals, specialty physicians, and medical device makers — in other words those with the most to lose financially from any large-scale system-wide changes — from joining together in opposition. This too may be the reasoning behind the effort to find $2 trillion in voluntary cost savings.
What may be at play also is what’s known as “Nash Equilibrium,” a key concept in game theory where competitors are fully cognizant of each others’ strategies, creating an eventual greater risk should they choose to alter their strategies. With outcomes better identified, and greater transparency and efficiencies driving overall spending decisions — for example, where expanded patient drug coverage derives considerable savings on future hospitalizations — what may also be in play is “prisoner’s dilemma,” another key concept of game theory. Or what may also be in play here is a fear of being on the wrong side of a “Pareto Efficiency,” a game theory where someone else gains at your expense.
Yes, there remain plenty of skeptics and doubters predicting the demise of health care reform. At this early stage in the legislative process, you’d be nuts to not be paranoid. But it’s even crazier not to better understand behavioral psychology.
John Edgell is a former Democratic congressional staffer.




Comments
Isn't all this a lot of fancy language to disguise the essential dynamic that 's in play here -- that is, keeping the health insurance companies in business? I understand why a lot of fancy footwork would be needed to do that, since single payer has 3% administrative costs, vs. the 30% that goes to executive compensation, profit, and the apparatus needed to deny people care under the health-care-for-profit model, meaning that single payer saves $350 billion a year, covering the uninsured easily without raising taxes on health benefits. For example, you write of the Nash equilibrium, where "competitors are fully cognizant of each others' strategies." However, since all "competitors" -- except the people -- have excluded single payer from the table and censored its advocates, clearly other forces than "nudging" are at play. Let's hope the Democrats come to their senses and do the right thing by August -- with all the players represented in this so-called "open" and "transparent" process.
It's so sad and true about chronic patients not being able to afford healthcare. I did some research online and stumble across a new search engine that finds generic prescriptions within your ZIP code. It's called Medtipster. I volunteer at a local community rec place and often hear stories from elders about skipping dosages and choosing grocery over medications. I started referring Medtipster to my friends and some of them have saved money and time from the website..If you're uninsured like me, look into other options http://medtipster.com/search.php
POST A COMMENT
Oops! The following errors must be addressed: