Friday, March 5, 2010
Behavioral health economics?
One of the biggest economics issues of our time is health care. Can we use the Homo Communitatis framework (see posted paper), which is essentially a mathematical version of the concepts of behavior and communities in Descriptive, to get a better handle on the economics of health care? For example, about 10% of the health care costs in the US today are due to obesity-related problems. That will rise to 20% in 8 years. We know what it takes to change that: change the diet and exercise habits of the populace. But we know how hard it is to do that. If we formulate the decisions using the 4-dimensional formulation of value (H, P, E, E), rather than the undifferentiated notion of "value" used in economics (even behavioral econ) today, and deliberate action, can we get any insights into what might work?
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4 comments:
The "Homo Communitatis" paper is at:
www.descriptivepsychologyinstitute.org/HomoCommunitatis.pdf
This is a vast topic, Joe, and I think we have to eat this elephant one bite at a time. Here’s a first nibble.
Clearly what economists call “incentives” are at issue here all over the place. “Incentive”, however, is classic Critic language and people do what they do (including eat) as Actors. Not surprisingly, weight-reduction programs designed around incentives have a very mixed track record.
Perhaps we can do a little better. Take this principle: A person will value a real something over the “same” possible something. Then if we want to use incentives we would give them to people up front. Say, agree on a weight-loss goal for this week, and put a 20% refund on this week’s health insurance premium in their bank account, with the stipulation that they will lose it if they don’t meet their weight goal.
If we look at it closely I bet we can find comparable ways of arranging organizational or system incentives.
I suspect there are a number of status-dynamic moves that might help as well. Making merely possible actually possible, for example? Accreditation? Anyone have a thought here?
One of the things trumpeted as a deep insight by the current BE guys is that people are "loss averse." From Wikipedia:
In prospect theory, loss aversion refers to people's tendency to strongly prefer avoiding losses to acquiring gains. Some studies suggest that losses are twice as powerful, psychologically, as gains. Loss aversion was first convincingly demonstrated by Amos Tversky and Daniel Kahneman
This is interesting in a couple of ways, not the least being the correspondence to "a person will not choose less behavior potential over more." I was fascinated to see Tony's formulation in terms of valuing a real something vs. the potential of that thing.
His proposal fits this very, very nicely: the 20% in the bank vs a promise of 20% in the future.
One thing I've noticed is that my decisions as to what I eat take place mostly in the grocery store. What I don't buy, I don't eat; this applies to restaurants as well, although there are other factors at restaurants (many small decisions, limited selection, gigantic portions) which make restaurants harder. Even there, I can choose which one to walk into.
Perhaps what's needed is a phone app that helps you to make good choices in the grocery store, find healthy food on the go, and rewards good behavior on the spot by some kind of game-like system? Ideally it would help you figure out how to shop for and prepare meals that you like, that have the right profile for health.
Weight-loss, unfortunately, is a false incentive, as any wrestler can tell you. You'd have people sweating themselves down to get extra drinking money on the weekend. But with better metrics this could work.
The simplest solution might just be to offer insurance-subsidized lessons in how to buy, prepare and cook a healthy, nourishing plant-based diet. The community which can form there would provide all the health incentives most people would need.
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