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By the Power of Default - Using Behavioral Economics to Change Behavior

Date: 2018-03-22

Have you ever wondered why, when you open your phone to search a query, Google is the engine that runs your search? It is just “one click away” to switch to Yahoo, Bing or Amazon, but most people don’t. A recent New York Times article showed that Google is “investing heavily to be the default choice on web browsers and mobile phones,” paying $100 million each year to become the default search engine on the Firefox web browser. One may argue that it is not worthwhile to pay that much to get just one click ahead of competitors. However, it turns out that although other choices are one click away, very few people bother with that single click, so Google remains the default.

This tendency to stay in the default choice is called default bias (or status quo bias) and encompasses people’s tendency to choose inaction over action as well as their preference to stick with previously made decisions. Researchers concluded there are four main reasons for this. Firstly, changing the default requires mental effort or a “cognitive cost.” Thus, people tend to “save their cognitive investment” of making a choice, or, simply, be lazy. Secondly, inertia is a strong force keeping many people in status quo, no matter what that means. Thirdly, people are twice as sensitive to a loss as they are to an equivalent gain, meaning that they tend to stick to the default choice to avoid the possible losses that might result from their behavior change. Finally, there is an implicit perception that when something is a default, it should be a good choice, causing more people to stick with it.

Recently, both governments and organizations have begun taking advantage of default rules and the related concept of opt-out design to advance social outcomes. This includes having people automatically enroll in retirement plans unless they actively opt out, or nudging households towards purchasing “green” energy from sustainable sources. Opt-out policy design produces significantly higher participation rates than opt-in policy design, and its applications in the sphere of healthcare are only growing.

A pivotal opt-out policy sprung from the reality that, although most people approve of organ donation, only a minor fraction carry out the process of signing a donor card. Thus, some version of the opt-out policy for organ donation exists in 25 European countries, with France and the U.K. also in the planning process. Individual states have considered implementing the program as well. Countries that follow the opt-out design have reached donation rates as high as 90 percent and above, while opt-in countries fail to reach even 15 percent.

An example from the provider healthcare side involves generic prescriptions. Although most generic equivalents of brand name medications work just as well as their counterparts and are markedly less expensive for patients and the healthcare system, physicians often stick with prescribing brand names. Realizing this, researchers changed the physicians’ computer display to include an opt-out checkbox labeled “dispense as written,” which, if left unchecked, would dispense the generic instead of the brand name medication. The overall rate of generic prescriptions rose 23.1 percentage points to a whopping 98.4 percent, saving patients out-of-pocket expenses, and improving overall adherence.

The Envolve Center for Health Behavior Change™ has also been using default bias and opt-out features to see if they can improve health outcomes in Medicaid members. One example is testing whether automatic enrollment increases participation in the Healthy Solutions for Life pediatric asthma program. The program pairs health coaches with members, providing ongoing guidance and health education to help members gain and maintain control of their health.

The moral here is if we want people to have healthier behavior, don’t make them choose “doing.” Make them choose “not doing!”

 

About the Authors

Ruth Shach is a researcher at the Evolve Center for Behavior Change. Prior to this, she has worked at the Gertner Institute for Epidemiology and Health Policy Research and the Jerusalem College of Technology in Israel, focusing on contexts for decision making in health policy, overuse of and disinvestment in health services, and patient engagement. She received her MPH from Tel Aviv University, Israel, and her BA (Hons) in psychology from York University, Canada. Her interests include health and economic policy, specifically utilizing behavioral insights to structure interventions in order to achieve greater effectiveness and efficiency.

 

Lynn Zhao is a Master of Social Work student at the Brown School at Washington University in St. Louis. She works with the Envolve Center as a research fellow and focuses on behavioral economics and health behavior change.

 

About Envolve, Inc.®

Envolve, Inc.® is a family of health solutions, working together to make healthcare simpler, more effective and more accessible for everyone. As an agent for change in healthcare, Envolve is committed to transforming the health of the community, one person at a time. Envolve unifies medical managementutilization managementspecialty pharmacyPBMvisiondentalbehavioral health managementlife and health/wellness managementempowerment and education servicestelehealth services24/7 nurse advice services, and data, analytics and IT solutions. For more information, please visit our website www.envolvehealth.com or contact us today at info@envolvehealth.com.

 

References

Ariely, D. (2008, May 5). 3 main lessons of Psychology. Retrieved from http://danariely.com/2008/05/05/3-main-lessons-of-psychology/

 

Behavioral economics.com. (2017). Behavioral Concepts: Status quo bias | Behavioraleconomics.com | The BE Hub. Retrieved July 5, 2017, from https://www.behavioraleconomics.com/mini-encyclopedia-of-be/status-quo-bias/

 

Johnson, E. J., & Goldstein, D. (2003). Do defaults save lives?

 

Lohr, S. (2011, May 15). Default Choices Are Hard to Resist, Online or Not - The New York Times. Retrieved from http://www.nytimes.com/2011/10/16/technology/default-choices-are-hard-to-resist-online-or-not.html

 

Madrian, B. C., & Shea, D. F. (2001). The power of suggestion: Inertia in 401 (k) participation and savings behavior. The Quarterly Journal of Economics, 116(4), 1149-1187.

 

Sunstein, C. R. (2017). Default Rules Are Better Than Active Choosing (Often). Trends in Cognitive Sciences. doi:10.1016/j.tics.2017.05.003