Download Session #1: Behavioral Economics and the Future of Health Care

Session #1: Behavioral Economics and the Future
of Health Care
Presenter: Richard Brynteson, Ph.D.
Elm Creek
Saturday, Jan. 7, 2017
10 – 11 a.m.
Richard Brynteson, Ph.D.
Dr. Richard Brynteson is an international consultant, author, executive coach, speaker and
professor. As a professor at Concordia University, he helps lead a high quality MBA
program. Much of his research, consulting, and writing has focused on innovation and
behavioral economics. He has lived and worked on four continents.
12/28/2016
Behavioral Economics and the Future of Health
Care
Minnesota Hospital Association
2017 Winter Trustee Conference
Dr. Richard Brynteson
[email protected]
Behavioral economics:
CAN YOU INFLUENCE THE BEHAVIOR OF
YOUR CUSTOMERS AND EMPLOYEES FOR
THE BETTER
SPOILER ALERT: YES!
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12/28/2016
Behavioral economics
the focus of research in behavioral economics is on
individual choice and the motives underlying that
choice.
Behavioral Economics is the psychology of Decision
Making.
Pay-off- If we can help people make better decisions,
they will live longer and better.
Behavioral economics
Economic man
Makes logical, rationale choices based on self-interest
Acts in his/her own best interest
Weighs cost/benefit of all decisions
Maximizes value and profit
However, we do not act this way. Why?
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Behavioral economics
People do not make strictly economic choices; they
make choices based upon their emotions
Therefore, if we can impact emotions, we can
impact buying and behavioral decisions
First, we need to understand the feelings behind
the buying decisions.
Behavioral economics
Like all revolutions in thought, this one began
with anomalies, strange facts, odd observations that
the prevailing wisdom could not explain.
Casino gamblers, for instance, are willing to keep betting even
while expecting to lose.
People say they want to save for retirement, eat better, start
exercising, quit smoking—and they mean it—but they do no
such things.
Victims who feel they’ve been treated poorly exact their
revenge, though doing so hurts their own interests.
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Behavioral economics
Three powerful social influences
Information (Fitbit, ect…)
Peer pressure (what the neighbors do)
Priming (positive words)
Behavioral economics
Behavioral economics can help people act in their
own best interests through
Experience engineering
Choice architecture
Decision Fatigue
Raising consciousness
Framing
Priming
Incentives
Loss aversion
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Behavioral economics
Experience engineering:
actively guide conversations and behaviors
anticipate the emotional response
What are families needing in your hospital?
preemptively offer more help: texts or booklets?
From first contact to aftercare….
Behavioral economics
Choice architecture
Rearranging cafeteria foods
Pills and appointments
Default for investment
HR applications
Bowl of cashews: what is in your refrigerator?
Structure complex choices
Understand mappings
Fitbit
Reward and Punishments
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Choice Architecture
There is a fly in the urinal!
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Behavioral Economics Applications:
Buying Better Food (produce)
Virginia study: Divide grocery carts in half; one-half
labelled “produce”; those with these carts spent twice
as much on produce
Yellow Arrows on floor pointing to produce
(consumers usually go right when entering stores):
raised amount of produce purchased
Mirror in grocery cart
Comparison: sign saying “ Average consumer buys 5
produce items each visit to the store”– produce sales
up 10%.
Behavioral Economics Applications:
Forced savings
Farmers in Bangladesh: Farmers took proceeds from
sweet potato sales and put them in locked box. Gave
key to neighbor. Farmer could only withdraw for
tuition payment.
Farmers in India: Bank has locked box with
instructions… same principle
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12/28/2016
Behavioral Economics :Exercise
Study: those with higher exercise goal did exercise
more. (twice as much)
Study: those who had points taken away for non
performance vs. those who were given points for
performance: twice as much exercise
Behavioral economics: Decision Fatigue
Concept: Decision Fatigue
We have a finite store of mental energy for exerting selfcontrol. Ego depletion
Study of judges
Buying warranties
Buying junk food
People in poverty
Residents’ work schedule
End of shift issues
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Behavioral economics
Priming
Positive and negative words
Lab research
Malpractice research
Convicts research
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Behavioral economics: Anchoring
Anchoring
Powerful sales tool
Black pearls
Social security experiments
Starbucks
Reliance on initial piece of information
Which experiences do your customers anchor upon?
Anchoring
“My friend said that most good cars cost between 20
and 30 thousand dollars. So, I guess $28,000 is just
fine.”
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12/28/2016
Anchoring
How happy are you?
When did you have your last date?
In which state are people most happy?
Behavioral economics
Illusions
Truth
Causality
Remembering
Narrative fallacies
Halo effect
Streak shooting
Outcome bias (Putin effect)
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Behavioral economics
Value Attribution
What is something worth?
Should something be free?
Joshua Bell
Ownership (tickets, paintings)
Draft status in NBA
Diagnosis bias
Sunk costs
Ikea Effect
French hospital: dirty floors and unsteady seats
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This is an example of sunk cost thinking. You have
already lost the money. Making decisions based
upon what was rather than what is and will be is like
driving by looking in the rear view mirror.
When does sunk cost thinking plague your thinking?
Availability to Imagination
How many seven letter English words have the form
_____n_
-
- - - ing
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Behavioral economics
Availability
“the ease at which instances come to mind”
Deer deaths vs. shark deaths
_n_
Memory- we remember better stuff
100 million slaves (pseudo events)
Awe vs. disgust
Made to Stick
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