Rational implications

There’s plenty of evidence that, in general, physicians respond more rationally to financial incentives than do patients. If patients were more rational, under-use of low or no out-of-pocket products and services (even those with few to no side effects) would be less common. We’d see less of this or this. If physicians were less rational in response to financial incentives, we wouldn’t see things like this or this or this. George Loewenstein, Kevin Volpp, and David Asch spin out the implications. Among them are the following.

Attempts to address issues of overuse of low-value services should focus mainly on physicians rather than patients. Insurance payments for services of low value should be reduced. Given the fiscal consequences of poorly controlled health care spending, it makes no sense to pay just as much for services or procedures that are unnecessary as those that are life saving. […] One straightforward implication of the greater rationality shown by individuals facing repeated decisions is that the role of patient cost sharing should be different in the setting of chronic illnesses than in the setting of acute illnesses. Patients with acute conditions are likely to confront unfamiliar and emotional decisions and are therefore not appropriate targets of cost-sharing incentive programs that require a dispassionate evaluation of costs and benefits. In contrast, higher cost sharing for low-value services can make more sense for patients with chronic conditions who are more likely to face similar decisions repeatedly.

If you have access to their (short) paper, it’s worth reading.


Hidden information below


* indicates required
Email Format