Health Care: Who Knows ‘Best’?

Peter Orszag
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…


This is exclusive content for subscribers only.
Get unlimited access to The New York Review for just $1 an issue!

View Offer

Continue reading this article, and thousands more from our archive, for the low introductory rate of just $1 an issue. Choose a Print, Digital, or All Access subscription.

If you are already a subscriber, please be sure you are logged in to your nybooks.com account.