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Health Care: Who Knows ‘Best’?

Peter Orszag; drawing by John Springs

One of the principal aims of the current health care legislation is to improve the quality of care. According to the President and his advisers, this should be done through science. The administration’s stimulus package already devoted more than a billion dollars to “comparative effectiveness research,” meaning, in the President’s words, evaluating “what works and what doesn’t” in the diagnosis and treatment of patients.

But comparative research on effectiveness is only part of the strategy to improve care. A second science has captured the imagination of policymakers in the White House: behavioral economics. This field attempts to explain pitfalls in reasoning and judgment that cause people to make apparently wrong decisions; its adherents believe in policies that protect against unsound clinical choices. But there is a schism between presidential advisers in their thinking over whether legislation should be coercive, aggressively pushing doctors and patients to do what the government defines as best, or whether it should be respectful of their own autonomy in making decisions. The President and Congress appear to be of two minds. How this difference is resolved will profoundly shape the culture of health care in America.

The field of behavioral economics is rooted in the seminal work of Amos Tversky and Daniel Kahneman begun some three decades ago. Drawing on data from their experiments on how people process information, particularly numerical data, these psychologists challenged the prevailing notion that the economic decisions we make are rational. We are, they wrote, prone to incorrectly weigh initial numbers, draw conclusions from single cases rather than a wide range of data, and integrate irrelevant information into our analysis. Such biases can lead us astray.

The infusion of behavioral economics into public policy is championed by Cass Sunstein, a respected professor of law and longtime friend of President Obama; he is now in the White House, overseeing regulatory affairs, and will have an important voice in codifying the details of any bill that is passed. In Nudge: Improving Decisions About Health, Wealth, and Happiness, Sunstein and Richard Thaler, a professor of behavioral science and economics at the University of Chicago, propose that people called “choice architects” should redesign our social structures to protect against the incompetencies of the human mind.1 Those who understand thinking better can make life better for us all.

Thaler and Sunstein build on behavioral economic research that reveals inertia to be a powerful element in how we act. Most people, they argue, will choose the “default option”—i.e., they will follow a particular course of action that is presented to them instead of making an effort to find an alternative or opt out. Further, they write,

These behavioral tendencies toward doing nothing will be re- inforced if the default option comes with some implicit or explicit suggestion that it represents the normal or even the recommended course of action.

Sunstein and Thaler propose to use default options as “nudges” in the service of “libertarian paternalism.” For example, to promote a healthy diet among teenagers, broccoli and carrots would be presented at eye level in the cafeteria and would be easily available, while it would take considerable effort for students to locate junk food, thereby nudging them into accepting a healthier diet. But all choices should be “libertarian”—people should be free to opt out of “undesirable arrangements if they want to do so.” The soft paternalistic nudge Sunstein and Thaler envisage should try “to influence choices in a way that will make choosers better off, as judged by themselves.” They are very clear that nudges are not mandates, and that behavior should not be forcefully directed by changing economic incentives. Your doctor should not be paid less if she follows a course of treatment that she can defend as reasonable, even if she deviates from officially issued guidelines. To prevent policy planners from going down the slippery slope of coercion, there should, in Sunstein’s view, be safety rails. Whatever the proposal put forward, he has written, people must retain “freedom of choice” and be able to oppose the more objectionable kinds of government intervention.

Such freedom of choice, however, is not supported by a second key Obama adviser, Peter Orszag, director of the Office of Management and Budget. In June 2008, testifying before Max Baucus’s Senate Finance Committee, Orszag—at the time director of the Congressional Budget Office—expressed his belief that behavioral economics should seriously guide the delivery of health care. In subsequent testimony, he made it clear that he does not trust doctors and health administrators to do what is “best” if they do no more than consider treatment guidelines as the “default setting,” the procedure that would generally be followed, but with freedom to opt out. Rather, he said,

To alter providers’ behavior, it is probably necessary to combine comparative effectiveness research with aggressive promulgation of standards and changes in financial and other incentives. [Emphasis added.]

The word “probably” is gone in the Senate health care bill. Doctors and hospitals that follow “best practices,” as defined by government-approved standards, are to receive more money and favorable public assessments. Those who deviate from federal standards would suffer financial loss and would be designated as providers of poor care. In contrast, the House bill has explicit language repudiating such coercive measures and protecting the autonomy of the decisions of doctors and patients.2

On June 24, 2009, when President Obama convened a meeting on health care at the White House, Diane Sawyer of ABC News asked him whether federally designated “best practices” would be mandated or simply suggested. That is, would he recommend Orszag’s shove or Sunstein’s nudge?

Obama: …Let’s study and figure out what works and what doesn’t. And let’s encourage doctors and patients to get what works. Let’s discourage what doesn’t. Let’s make sure that our payment incentives allow doctors to do the right thing. Because sometimes our payment incentives don’t allow them to do the right things. And if we do that, then I’m confident that we can drive down costs significantly.

Sawyer: Will it just be encouragement? Or will there be a board making Solomonic decisions… about best practices?

Obama: What I’ve suggested is that we have a commission… made up of doctors, made up of experts, that helps set best practices.

Sawyer: By law?

Obama: …If we know what those best practices are, then I’m confident that doctors are going to want to engage in best practices. But I’m also confident patients are going insist on it…. In some cases, people just don’t know what the best practices are. And certain cultures build up. And we can change those cultures, but it’s going to require some work.

Sawyer: But a lot of people… say…”I’m very concerned that there’s going be a reduction in treatment someplace in all of this.” And the question is if there is a board that is recommending, that’s one thing. If there is a board that is dictating through cost or through some other instruction, that’s another thing. Will it have the weight of law? Will it have the weight of regulations?

Obama: …I don’t think that there’s anybody who would argue for us continuing to pay for things that don’t make us feel better. That doesn’t make any sense. [Yet] that’s the reason why, in America, we typically pay 50 percent more for our health care than other advanced countries that actually have better health care outcomes.

Still, the President appears not to be entirely in Orszag’s camp. He has repeatedly deflected accusations of a “government takeover of health care” by asserting that no federal bureaucrat will come between the doctor and patient in clinical decision-making. The President has also repeatedly told physicians that reform would sustain them as healers, not make them into bean counters and paper pushers. In an interview on NPR two days before passage of the Senate bill, the President said that changes in how doctors and patients think about health care should come from giving them the “best information possible” and did not invoke the coercive measures favored by Orszag.

How do we reconcile this apparent difference between Sunstein and Orszag? The President contends that sound policies are built on data, but which data? Here the evidence is strongly in favor of Sunstein and his insistence on the need for freedom of choice and retaining the ability to oppose objectionable forms of government intervention. Over the past decade, federal “choice architects”—i.e., doctors and other experts acting for the government and making use of research on comparative effectiveness—have repeatedly identified “best practices,” only to have them shown to be ineffective or even deleterious.

For example, Medicare specified that it was a “best practice” to tightly control blood sugar levels in critically ill patients in intensive care. That measure of quality was not only shown to be wrong but resulted in a higher likelihood of death when compared to measures allowing a more flexible treatment and higher blood sugar. Similarly, government officials directed that normal blood sugar levels should be maintained in ambulatory diabetics with cardiovascular disease. Studies in Canada and the United States showed that this “best practice” was misconceived. There were more deaths when doctors obeyed this rule than when patients received what the government had designated as subpar treatment (in which sugar levels were allowed to vary).

There are many other such failures of allegedly “best” practices. An analysis of Medicare’s recommendations for hip and knee replacement by orthopedic surgeons revealed that conforming to, or deviating from, the “quality metrics”—i.e., the supposedly superior procedure—had no effect on the rate of complications from the operation or on the clinical outcomes of cases treated. A study of patients with congestive heart failure concluded that most of the measures prescribed by federal authorities for “quality” treatment had no major impact on the disorder. In another example, government standards required that patients with renal failure who were on dialysis had to receive statin drugs to prevent stroke and heart attack; a major study published last year disproved the value of this treatment.

Other “quality measures” recommended by the government were carried out in community health centers to improve the condition of patients with asthma, diabetes, and hypertension. The conclusion of subsequent research was that there was, as a result, no change in outcome for any of these three disorders. Finally, Medicare, following the recommendations of an expert panel, specified that all patients with pneumonia must receive antibiotics within four hours of arrival at the emergency room. Many doctors strongly disagreed with such a rigid rule, pointing out that an accurate diagnosis cannot be made so quickly, and the requirement to treat within four hours was not based on convincing evidence. But the government went ahead, and the behavior of physicians was altered by the new default setting—for the worse. Many cases of heart failure or asthma, where the chest X-ray can resemble a pulmonary infection, were wrongly diagnosed as pneumonia; the misdiagnosed patients were given high doses of antibiotics, resulting in some cases of antibiotic-induced colitis. The “quality measure” was ultimately rescinded.3

  1. 1

    Yale University Press, 2008; See the review in these pages by John Cassidy, “Economics: Which Way for Obama?,” June 12, 2008.

  2. 2

    On June 16, 2008, at the Health Reform Summit of the Senate Finance Committee, Orszag explicitly invoked behavioral economics to explain some of the deficiencies in American health care and as the basis for legislative interventions that would remedy rapidly escalating costs and gaps in quality.

    On August 7, 2008, addressing the Retirement Research Consortium in Washington, D.C., Orszag presented “Behavioral Economics: Lessons from Retirement Research for Health Care and Beyond.” Here, he states the likely need for aggressive measures. The Senate Finance Committee, under Max Baucus, was widely reported to have worked closely with the White House, and many of Orszag’s proposals are prominent in the bill that Majority Leader Harry Reid brought to the floor. See Senate Bill HR 3590, Title III—Improving the Quality and Efficiency of Health Care.

    The House rejected many of the ideas from the President’s advisers in favor of safeguards on patient–physician autonomy, causing Rahm Emanuel, the White House chief of staff, to quip that politics trumps “ideal” plans made in the shade of the “Aspen Institute.” See Sheryl Gay Stolberg, “Democrats Raise Alarms over Health Bill Costs,” The New York Times, November 9, 2009. Explicit language in the House bill is intended to safeguard patient–physician autonomy. See House Bill HR 3962, Title IV—Quality; Subtitle A—Comparative Effectiveness Research.

  3. 3

    These results, respectively, come from the NICE-SUGAR Study Investigators, “Intensive versus Conventional Glucose Control in Critically Ill Patients,” The New England Journal of Medicine, March 26, 2009; Silvio E. Inzucchi and Mark D. Siegel, “Glucose Control in the ICU—How Tight Is Too Tight?,” The New England Journal of Medicine, March 26, 2009; the Action to Control Cardiovascular Risk in Diabetes Study Group, “Effects of Intensive Glucose Lowering in Type 2 Diabetes,” The New England Journal of Medicine, June 12, 2008; the ADVANCE Collaborative Group, “Intensive Blood Glucose Control and Vascular Outcomes in Patients with Type 2 Diabetes,” The New England Journal of Medicine, June 12, 2008; Robert G. Dluhy and Graham T. McMahon, “Intensive Glycemic Control in the ACCORD and ADVANCE Trials,” The New England Journal of Medicine, June 12, 2008; Gregg C. Fonarow et al., “Association Between Performance Measures and Clinical Outcomes for Patients Hospitalized with Heart Failure,” The Journal of the American Medical Association, January 3, 2007; Bengt C. Fellström et al., for the AURORA Study Group, “Rosuvastatin and Cardiovascular Events in Patients Undergoing Hemodialysis,” The New England Journal of Medicine, April 2, 2009; Bruce E. Landon et al., “Improving the Management of Chronic Disease at Community Health Center,” The New England Journal of Medicine, March 1, 2007; Rodney A. Hayward, “Performance Measurement in Search of a Path,” The New England Journal of Medicine, March 1, 2007; Robert M. Wachter et al., “Public Reporting of Antibiotic Timing in Patients with Pneumonia: Lessons from a Flawed Performance Measures,” Annals of Internal Medicine, July 1, 2008.

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