Behavioral Economics
by Jack Stevens, PhD
Psychologist, Nationwide Children's Hospital
Associate Professor of Pediatrics, The Ohio State University
Dr. Stevens will be featured in HCGC's April and May Webinar Series on Behavioral Economics. Find registration information for the webinar series here
What is behavioral economics?
Behavioral economics (BE) is an interdisciplinary field featuring concepts from psychology and economics to help people obtain their long-term goals. BE is often associated with the word “nudge,” a strategy that encourages people to make positive changes while preserving choice and freedom.
BE has often been utilized to help people make better financial decisions, such as saving more for retirement or decreasing their home energy bills. However, over the last decade, BE has been applied for health purposes in terms of assisting clinicians as well as patients.
Who are the leaders in behavioral economics across the United States?
The book Nudge was written by Richard Thaler (a University of Chicago Booth School of Business professor who won the 2017 Nobel Prize for Economics) and Cass Sunstein (a Harvard Law School and Harvard Kennedy School of Government professor).
In 2016, the University of Pennsylvania School of Medicine was the first health care system to establish its own formal behavioral economics team. BE work from this “Nudge Unit” has been featured in the New England Journal of Medicine as well as the Journal of the American Medical Association Network journals.
What are some of the success stories from behavioral economics?
BE strategies have led to positive health outcomes such as:
Reducing medication costs by tens of millions of dollars by encouraging the use of
generic versus brand name medication
Increasing organ donor registration rates among citizens in the United Kingdom
Reducing unnecessary prescribing of antibiotics for non-bacterial infections
Increasing hand hygiene compliance by health care workers
Reducing purchases of sugar-sweetened beverages
Increasing vaccination rates
Reducing use of unnecessary laboratory tests and radiology procedures
Why might behavioral economics appeal to clinicians, administrators, and health systems?
Past research has suggested that BE strategies often have a favorable benefit/cost ratio relative to alternative approaches. BE strategies are feasible to implement because they typically require a relatively low level of resource, such as rephrasing options for patients or altering screen displays in electronic medical record systems.
