Good insights including your discussion of "Predictibly Irrational" and "Nudge." There's been noticeable attention recently to the field of Behavioral Economics, which these works touch on, and how it relates to healt care.
Last week, Newsweek had this to say in their weekly health care column: "After failing to find answers with brute computing power, economics is now seeking help from psychology. Known as behavioral economics, this controversial combination of psychological insights and economic methods is moving fast into the mainstream. After Years as a fringe idea, it's being taught at Princeton, studied in Washington and preached at investment seminars from coast to coast. Business is paying close attention, too. Drugmaker Merck uses behavioral psychology to run its pension plans and to plot its bids for sales contracts. At an annual conference previously dedicated to number crunching, Prudential Securities introduced investors to a Harvard psychologist."
Last summer, as reported in Food USA Navigator, USDA's Economic Research Service (ERS) unit issued a report that "suggests behavioral economics - or consumer psychology - could aid in the understanding and modifying of consumption habits, where standard economics has failed. It comes in response to the growing realization that the divide between consumers' awareness and implementation of dietary guidance shows no sign of diminishing: almost 90 percent of consumers surveyed in 2005 knew that diet and exercise influence health, yet most Americans are still choosing diets out of sync with dietary guidance. According to the ERS report, economists usually address the issue by examining the usual economic suspects: prices, income, dietary information and time preferences. But this may not necessarily provide policymakers with any attractive options to reverse the trends, wrote the agency. In contrast, behavioral and psychological studies indicate that people regularly behave in ways that contradict some basic economic assumptions, seen, for example, in responses to changes in income, or to information processing. Incorporating such idiosyncrasies into economic analysis of consumer behavior can expand our understanding of what motivates food choices and health outcomes. This can help us think of new ways to encourage all people to choose more healthful diets, wrote the report."
Express Scripts just issued a press release announcing establishment of the Center for Cost-Effective Consumerism, an initiative to "accelerate development of an advanced understanding of the consumer and of what works - and what doesn't work - when trying to change the way consumers use health care." The initiative was spurred by Express Scripts application of consumer behavioral research that they claim yielded $600 million in savings linked to increasing consumer use of generic statin anti-cholesterol drugs, following the availability of generic Zocor in mid-2006. Express Scripts combined financial incentives with an advanced and aggressive communications program, and usage increased from 8% in mid 2006 to 53.2% in March 2008. As the Wall Street Journal reported it," Express Scripts' experiment with incentives is rooted in a discipline called behavioral economics, which draws heavily from principles of social and cognitive psychology. The field attempts to understand why people make economic decisions that aren't based solely on saving or making money."
