AUGUST 2018
The Healthy Nudge
Active Choice Intervention Associated with Increased Advance Directive Completion
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A randomized trial from the FIELDS Program found that applying active choice to the completion of advance directives significantly influenced employee behavior, increasing the number of individuals who completed an advance directive. This finding is particularly promising in light of another recent FIELDS' study that found only 1 in 3 adults has completed an advance directive.
Innovation Tournament Targets Mental Health
This summer, CHIBE and the Center for Mental Health Policy Research held an IDEA gala as part of the Penn NIMH ALACRITY Program. Six winning ideas aimed at increasing the use of evidence-based treatments in mental health care were announced at the gala, which brought together clinicians from across Philadelphia. Over 55 clinicians submitted ideas as part of the crowd-sourcing innovation tournament earlier this year.
Promoting HIV Testing with Novel Incentives in Uganda
CHIBE Associate Director, Harsha Thirumurthy, PhD, and colleagues, compared six non-monetary incentive interventions for HIV testing within a community health campaign in Uganda. Their study found that testing uptake was significantly higher when low-cost incentives were framed as part of a lottery instead of "gain-framed." No significant increase in HIV testing was found in the other incentive groups.
Blog Spotlight
Risky Cell Phone Use Behind the Wheel:
A Role for Financial Incentives
How can principles of behavioral economics be applied to help lower the number of distracted teen drivers? In a recent video blog post, Kit Delgado, MD, MS discusses how financial incentives can be used to encourage teens to use their phones less while driving.
  Upcoming
Events
MD/PhD Candidate
Department of Health Management & Policy
University of Michigan School of Public Health
09/13 @ Noon
104 Stellar-Chance
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Landmark Medicare Changes May Lead Doctors to Drop Sicker Patients

A New Study Shows Just How Much Doctors Prescribe Opioids

A Quarter of Adults With Sprained Ankles Were Prescribed Opioids in the ER, Study Shows

Can We Nudge Our Way to Responsible Opioid Prescribing?

Addressing Out-Of-Pocket Specialty Drug Costs In Medicare Part D: The Good, The Bad, The Ugly, And The Ignored
 CHIBE Profile
CHIBE Internal Advisory Board member Barbara Kahn, PhD, MBA serves as the Patty and Jay H. Baker Professor of Marketing and the Director of the Jay H. Baker Retailing Center at the Wharton School.
In your recently published book, The Shopping Revolution: How Successful Retailers Win Customers in an Era of Endless Disruption , you outline a “retailing success matrix.” How might this matrix apply to the health care industry?
The “ Kahn Retailing Success Matrix ” is based on two principles. First, is the principle of customer value, which in retail means offering customers something they value (product benefits) from someone they trust (customer experience). The second principle is that of differential advantage, when markets get competitive consumers to buy from retailers who offer them the best value on the dimensions they care about. This superior value can be delivered either by providing more pleasure and benefits or removing more pain and inconvenience.
 
Putting these two things together results in a 2x2 framework. The examples listed in the framework are retailing examples. Basically, in order to succeed in the very competitive retailing market, retailers have to be good enough at everything in the matrix; but to win, they have to be the best at one quadrant and leverage that advantage to be best at a second quadrant.
 
What’s really new about the matrix is the customer experience column. Retail historically has been focused on the product side. Great retailers are considered good merchants, excellent at delivering wonderful product assortments that consumers desire; or they have catered to the price sensitive segment. Both of these models focus on finding the right products and figuring out efficient logistics.
 
What the matrix points out is that, astonishingly, retailers have ignored the customer experience column, and this is where Amazon really changed the landscape. Amazon focused on removing the pain from the customer experience. They have developed a painless, seamless, integration of the shopping experience across all touchpoints. This requires the collection, capture and analysis of all customer data. Constantly analyzing the data allows for customization and personalization as well. Amazon then leveraged their leadership position in delivering a frictionless experience to offer the customers the lowest prices as well. Sephora is another example. Sephora leveraged a sophisticated loyalty program which helped them deliver a frictionless experience, and then leveraged that leadership advantage to deliver an out-of-the box in-store pleasurable customer experience.
 
This matrix can apply to the health context as well, although rather than calling the top row, “increase benefits,” I might label it “increase comfort, hope or trust.” In any event, there are two lessons from studying the matrix and the different retailing strategies. First, I believe that the medical field has similarly focused on the first column and has ignored the second column: the customer or patient experience. There are many “low hanging fruit” strategies that health care deliverers could adapt from retailing that would “reduce the pain” in the patient experience. In retailing, “increasing pleasure” in the customer experience typically involves the “touch and feel” part of retailing, or the physical store. Innovative retailers such as Eataly, Sephora, and others have used the physical interaction in much more productive ways. Medical delivery can think about strategies here as well that rely on increasing patient support during the physical interaction with the patient. Or they can consider adding in-home physical interactions through nursing services, etc.
 
The second lesson that comes from studying the retailing landscape is that the consumer who buys from Amazon is the same patient who gets healthcare services. Amazon and other retailers who are forced to compete effectively have raised the stakes on what customers expect from service interactions, and that will include medical care. The health care deliverers that can meet these new demands will definitely be the winners.

Do you see an opportunity for principles of behavioral economics to be applied successfully to address the major pain points in the current health care market? If so, how?
There are several principles of behavioral economics that are at play underlying the strategies suggested in the Kahn Retailing Success Matrix. For example, “confirmation bias,” which suggests that people analyze and search for information in ways that supports what they already think. I think legacy retailers suffered from confirmation bias and many failed to see the threat that Amazon represented until too late. Another bias that could help an Amazon-like approach to health care is the “default bias,” in which people pick the easiest option to avoid thinking. If Amazon and Amazon Echo represent the easy way for consumers to make decisions about everything in their life, and if Amazon chooses to start incorporating health decisions into their mix, the default bias suggests that consumers will just start allocating these decisions to Amazon. “Loss aversion” also suggests that people hate losses more than they like gains, and Amazon’s strategy, focusing on the bottom row for their leadership advantage echoes this thinking. Finally, the “friction bias” which suggests seemingly small barriers can deter action suggests that if Amazon-like competitors can reduce the friction in any kind of medical decision making this will be a very potent strategy.
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The Center for Health Incentives and Behavioral Economics (CHIBE) at the University of Pennsylvania conducts behavioral economics research aimed at reducing the disease burden from major U.S. public health problems. Originally founded within the Leonard Davis Institute of Health Economics , our mission is to inform health policy, improve healthcare delivery and increase healthy behavior.
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