Behavioral economics explores innovative ways to eliminate waste, help people make better decisions, and boost satisfaction. Leading health care organizations are looking for new methods to predictably engage, educate, and motivate individuals to make more informed and cost-effective health care choices.
To answer your questions on behavioral economics and its effect on health care, we've asked our expert Jeff Munn, a Principal and leader of the design and development team within Hewitt's Health Management practice, to share his insights. If you'd like to ask a question about behavioral economics, or about any other pressing human resources challenge you might be facing, e-mail us. We'll share responses to select questions on a regular basis.
Question: What is behavioral economics?
Answer: Classical economics assumes that people are rational and act in their own self-interest when making choices. Behavioral economics is an emerging field that offers real-world insight into people's day-to-day behavior on what guides them to make decisions. A deeper understanding of why people do what they do offers the potential to effectively promote positive changes in behavior.
Question: How can behavioral economics be used to improve health care?
Answer: Health care providers often ask themselves why people choose health care that isn't right for them — possibly choosing an option that costs more but doesn't offer the right coverage based on their needs. Because behavioral economics looks at how real people take action and make decisions, it enables us to predict when poor decisions will be made. If we apply this insight, we can take measures to counteract these decisions.
Applying behavioral economics to health care will result in new ways to deal with current and emerging challenges in the system. To make sustainable improvements in the health care system, we must dissect the delivery of health care — the providers, plan sponsors, and consumers — and how decisions affect each part. It will help us eliminate waste in spending while maximizing outcomes to improve health and health care.
For more information on upcoming events discussing behavioral economics, visit www.ignitesymposium.com.
About Our Expert
Jeffrey D. Munn is a principal in Hewitt's Washington, D.C. consulting office. He leads Hewitt's Health Management design and development team, which is responsible for thought leadership and product development related to health and health care. Jeff has written several articles on consumer-driven health care. He is frequently quoted in publications and presents at several conferences each year. Jeff has been with Hewitt for 14 years.
