Thinking fast and slow about universal healthcare.
I have been thinking about healthcare reform in general and
universal healthcare in particular, for decades now. I am well aware of the
admonition of Uwe Reinhardt that, in healthcare reform, everybody’s 2nd
choice is the status quo, and thus reform is hard-fought. But, because of an
excellent book by Michael Lewis, The Undoing Project, about the world
changing work of Daniel Kahneman and Amos Tversky, and Daniel Kahneman’s own
book, Thinking Fast and Slow, I
have been able see more clearly why healthcare reform is so damned difficult.
The major concepts explored in Tversky and Kahneman’s
seminal work on Prospect Theory and in Kahneman’s book explain the failure of
healthcare reform in America better than nearly anything I have explored
before. The only caveat I will add to this is that as the late Uwe Reinhardt
pointed out, Americans have also steadfastly refused to have the moral argument
about whether or not we should even strive for universal healthcare, let alone
how we should get there! “A common incantation during debates on health reform…
is ‘that we all want the same thing; we merely disagree on how best to get
there.’ That is rubbish.”
Thinking is divided into fast and slow subsets. System 1
thinking is fast and intuitive. It is also confident. Overly confident,
according to Kahneman. System 2 thinking is slow and deliberate. It is more
difficult, it takes more time, it is less confident.
System 1 thinking leads many to believe that any changes to
the US healthcare system that would make it more like any other nations
healthcare systems would be bad. This thinking occurs with minimal or no actual
reference data, other than what it picks up from its favorite news sources. If
the person has seen a story or two about waiting times in Canada, or a patient
not getting timely care in the UK, system 1 confidently trashes any talk of
change. The medical analogy, as taught to me during my medical school days is,
“One half-assed observation by me is equivalent to 3 randomized controlled
trials.”
Kahneman uses the following example: a bat and ball together
cost $1.10.
The bat costs a dollar more than the ball.
How much does the ball cost?
People intuit what is an incorrect answer, 10 cents, and
confidently do so, because they did not check. The answer is easy, but System 1
intuition confidently plows ahead with the incorrect answer.
Politicians, pharmaceutical and health insurance industries
as well as the many support industries around them, promote this thinking, in a
constant multimedia barrage, reinforcing false intuitions.
System 2 thinking is less confident and more deliberative.
It takes longer. It requires more effort. It requires a commitment. Thus, it
too often takes a backseat to our intuitive thinking.
All of our thinking is subject to the other forces outlined
in prospect theory, namely, reference points, loss aversion, framing,
availability, and the sunk cost fallacy.
In classical economic Utility Theory, the dollar is a
dollar. $5 million should make us happy. But if I start with $1 million and my
friend starts with $9 million, and we both end up with $5 million, I am much
happier than he is. Reference points and starting positions matter.
Consider the healthcare analogy. I have a “Cadillac health
plan.” You have no health insurance. Health care reform is proposed that will
give us all excellent health care coverage, covering virtually every medically
necessary expense we can have with minimal out-of-pocket expenses. If this
passes, from my perspective, I have lost the best of all possible worlds even
though the new coverage is essentially the same world. You are happy. I am not.
Most of us are familiar with the concept of loss aversion.
Since being introduced by Kahneman and Tversky, the concept has seeped into the
collective consciousness. Simply stated, we feel the pain of loss much more
deeply than the happiness of gain. If I offer 2 tickets, one with a guaranteed
win of $500 and one with a 50/50 chance of winning $1000 or nothing, most will
choose the guaranteed win. If I offer 2 tickets, one with a guaranteed loss of
$500 and one with a 50/50 chance of losing $1000 or no loss, most people will
take the chance to avoid the guaranteed loss of $500.
If I offer to flip a coin with you, and heads you win $1000
and tails you pay me $1000, you will not take that bet. Our loss aversion is so
high, that it requires winning about $2000 to overcome the loss aversion.
If I have Cadillac health plan, or even a standard
employer-based plant, I am so concerned that changing to a universal plan will
result in some kind of loss to me, I am inclined to fight vigorously to avoid
that chance. Here again, proponents of the status quo will foment fear,
uncertainty, and doubt. Fear, uncertainty, and doubt amplify the fear of loss
and the resistance to change.
We have all become familiar the consequences of framing the
argument. If, as a physician, I tell you that your chances of dying from
treatment I am recommending is 10%, there is a decent chance will decline to
treat. On the other, I tell you that this exact same treatment as a 90% chance
of success and survival, there is a significantly greater chance that you will
agree to it.
In universal healthcare debate, negatively framing the
possible consequences of change are exploited ruthlessly. If I tell you that
changing our health system will result in you losing the employer-based health
insurance plan that you have come to depend on, you will almost certainly
reject it.
If I tell you that transitioning to a universal healthcare
system will result in a more comprehensive coverage plan, less of your wages
going to your healthcare coverage and more going directly to you as increase
wages, a vast reduction in co-pays and out-of-pocket expenses, and that you
never have to worry about losing your coverage, whether or not you are too sick
to stay in a job or your job for our opportunities, likely I can convince you
that this is a good thing.
Alternatively, if I tell you that we will be transitioning
to a system, modeled on the Canadian system or British system, and the only
things you know about those systems are what you have been told in the media,
relentlessly, for decades, the uncertainty and potential loss to you and your
family become so overwhelming that you cannot possibly imagine accepting this
option.
This dovetails with the concept of availability. If we are
asked to guess how many words in the dictionary start with “R” versus have “R”
in the 3rd position, we will guess a far higher number of the former
than the latter. This is because we can think of lots of words that begin with
“R” very rapidly – they are “available” to us – and so we overestimate the
number of words beginning with it. Similarly, if the stories that come to mind
rapidly about alternative healthcare systems are of long waiting times and
forgoing treatments, our minds naturally fixate on these examples. As someone
who spent the last 15 years or so studying international healthcare systems, my
mind rapidly goes in the opposite direction, with myriad examples of better
access to care, lower costs, and so on that anchor my thinking to the benefits
of other systems, rather than the potential downsides.
Finally, the sunk cost fallacy is a bit harder to envision
in the universal healthcare debates, as it is well camouflaged. As a nation, we
have contributed trillions of dollars to the building up of massive companies,
both for-profit and nonprofit like, presuming that this investment is giving us
the best possible health care system. It is not. This is not to say that our institutions
are failing, quite the contrary.
We have the best trained healthcare professionals in the world. We have the
best medical research in the world. We have many of the best hospitals in the
world. But our para-medical companies are not serving us well. They have
created bloated, imperious, rapacious engines of profit, paying lip service to
the primacy of patients or members or participants or providers, but
legitimately only excelling at growth.
When we think of the scale of the infrastructure surrounding
the administration of health insurance plans, pharmaceutical manufacturers,
medical device makers, and the related supporting industries, the footprint in
the economy is massive. The workforce is massive. In health plans alone there
are armies of nurses and doctors and support staff and administrators
supporting them, whose sole task is called “utilization management,” what the
rest of the world knows as the “approval/denial people.” In the trenches of the
opposing armies, are their counterpart nurses and doctors and support staff and
administrators working for hospitals or clinics or doctors’ offices, engaged in
daily battle over whether the member/patient is “eligible” for the treatment or
payment being sought.
Wendell Potter has pointed out that, “Health insurers have
been successful at two things: Making money and getting the American public to
believe they’re essential.” They will not go quietly into that good night.
There is too much money on the line. Never mind that most of it adds no value
to the health care system (i.e., it is waste), it is a robustly reliable
revenue stream.
“One man’s waste is another man’s revenue.”
Well, that is all very grim. What is the solution?
My proposal is to use both system 1 and system 2 thinking to
show the clear advantages of transitioning to a universal healthcare system in
America. I am not talking about “gaming” the American psyche, I am talking
about de-programming it from decades of misinformation propagated by the
special interests that continue to literally and figuratively make a killing
off of healthcare in America.
Continued in part 2. (When I get to it!)
Recommended reading:
Lewis, M. (2016). The
undoing project: A friendship that changed the world. Penguin UK.
Rosenthal, E. (2018). An
American Sickness: How Health Care Became Big Business and How You Can Take It
Back. Missouri Medicine, 115(2), 128.
Reinhardt, U. E.
(2019). Priced Out: The Economic and Ethical Costs of American Health
Care. Princeton University Press.
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