How healthcare organizations can use behavioral economics to get desired results from patients and staff

• Karen Horgan, co-founder and CEO of VAL Health, presented “Behavioral Economics to Drive the Last Mile of Health Engagement,” at HFMA’s Digital Annual Conference Aug. 14.
• Without behavioral economics, Horgan said, healthcare organizations are likely not to get the impact they want.
• Behavioral economics can be thought of as the science of understanding that humans act irrationally.

“Behavioral economics really can be used to transform healthcare,” said Karen Horgan, co-founder and CEO of VAL Health, during the Aug. 14 featured general session, “Behavioral Economics to Drive the Last Mile of Health Engagement,” at HFMA’s Digital Annual Conference.  The session was sponsored by Grant Thornton.

Without behavioral economics, Horgan said, healthcare organizations are likely not to get the impact they want. That would be the case even if they have the best program to improve patient health or the best intentions for getting patients to pay their bills or show up for their appointments.

Behavioral economics can be thought of as the science of understanding that humans act irrationally, Horgan said.

To help patients go down a desired path, Horgan said, there are three things to know:

Defaults: The right path should always be the easy path

Horgan explained that the University of Pennsylvania Medical Center wanted to increase the rate at which its physicians were prescribing generic drugs. Leaders changed the default choice in the medical records from brand-name drugs to the generic versions.

“Overnight the prescribing rate went from all over the map to essentially over 98% [of physicians prescribing generic drugs],” Horgan said. “Think about it: They could have done an informational campaign, they could have … talked about how important it is, how much money it’s going to save for the patient or the system … but all of this information would have not driven behavior change” like the default did.

Framing of words is more important than what is said

“Words really do impact behaviors; we cannot underestimate how important that is,” Horgan said. In a pre-COVID-19 example, patients needed to pick up devices so they could be monitored remotely for a digital diabetes management program.

Two sets of letters were sent to two different groups of patients. One letter said, “Please call us to schedule an appointment.” Among recipients, 13% actually made the appointment and showed up.

“A second set of letters … said, ‘I have scheduled an appointment for you. Please arrive at this date and time.’ Three times more people showed up with that default framing,” Horgan said.

Think about the words being used if you’re going to spend the money to send out direct mail, an email or call patients, Horgan advises. “It can truly drive the behavior change and triple the rate at which patients get engaged,” she said.

Two other aspects of framing deserve mention.

Framing as a loss is more powerful than framing as a gain. Horgan cautions that framing as a loss needs to be done in an appropriate way, so you do not come across as negative. 

In a framing as a gain example, a healthcare organization offered patients the chance to earn $1.40 a day, up to $42, for walking a requisite number of steps each day. In the corresponding framing it as a loss example, each patient in the walking program was gifted $42 into a virtual account, and they would lose $1.40 each day they did not meet their steps.

In the actual study, 29% more patients walked their required steps to retain the $42 compared with the cohort that could earn $1.40 a day.

“This just shows that losses are more powerful than gains,” Horgan said.

We are very much social beings. Because we are social beings, we are influenced by those around us, and we compare ourselves to others, Horgan said.

How might this work in a healthcare setting? In one study, emails were sent out to physicians about their prescription rates for opioids and antibiotics, both of which can negatively affect patients and communities if prescribed excessively. The letters played on the fact that no physician wants to be below average. We all want to be above average, according to Horgan.

The email campaign simply indicated a physician’s antibiotic prescription rate compared to top performers’ rates of 10%. Prescribing rates then went down by 50%.

“This is using peer comparison for good, and it is using peer comparison appropriately,” Horgan said.

Simplicity: Keep it simple to streamline decision-making

“We truly  shut down when there are too many choices,” Horgan said. “As hospital executives, you can bring your authority, and you can nudge people without taking away choice, giving them the direction you want [them] to go,” Horgan said.

In one VAL Health case study, Sutter Health in Sacramento wanted to push more patients to use its portal.

People could have been pushed to use the portal for several reasons, but to avoid choice overload, a single pain point was highlighted: Being able to schedule appointments at all hours of the day, not just between 9 and 5.

Instead of talking about the portal’s features, it was decided to let patients know they qualified for online appointment scheduling (because people don’t want features, they want to feel special, Horgan said).

“As a My Health Online member, you’re eligible to schedule online,” read the email headline, followed by how convenient (open 24/7), easy (four simple steps) and faster than scheduling by phone it was. The “show me how to use this exclusive feature” button was powerful. The outcome: 4.9 times more people scheduled appointments online.