Karen Horgan, CEO of VAL Health, shares example after example of using behavioral economics in planning the patient experience. Those who study and apply this emerging field of study have the upper hand in changing outcomes. In this episode, you’ll learn how the tenets of this discipline are being used to influence behavior in both clinical and non-clinical settings, how the benefits apply to all practices regardless of size, and the potential of applying behavioral data to solve some of the biggest disparities in access to care.
Engage With Us
How to listen: shows.pippa.io/paradigm-shift-of-healthcare/howto
Archive of previous episodes: https://www.p3practicemarketing.com/paradigm-shift-of-healthcare/
Follow on Twitter: https://twitter.com/p3practicemktg
Announcer: It’s time to think differently about healthcare, but how do we keep up? The days of yesterday’s medicine are long gone and we’re left trying to figure out where to go from here. With all the talk about politics and technology, it can be easy to forget that healthcare is still all about humans. And many of those humans have unbelievable stories to tell. Here, we leave the policy debates to the other guys and focus instead on the people and ideas that are changing the way we address our health. It’s time to navigate the new landscape of healthcare together. And here’s some amazing stories along the way. Ready for a breath of fresh air? It’s time for your “Paradigm Shift.”
Michael: Welcome to the “Paradigm Shift of Healthcare.” And thank you for listening. I’m Michael Roberts here today with my co-hosts Scott Zeitzer and Jared Johnson. On today’s episode, we’re speaking with Karen Horgan. She’s the CEO of VAL Health, the leading health-related behavioral economics consulting firm. Karen, thank you so much for coming on the show.
Karen: Thanks for having me on your program.
Michael: Absolutely. So, let’s dive right into this topic of behavioral economics. We wanna get, sort of, that 101 definition of what it is. And, you know, some folks may be somewhat aware of this field and there’s been some really popular books that have come out over the past several years. There’s books like “Nudge” that’s come up in a lot of conversations recently, even that book by Thaler and Sunstein, or there’s the book, “Influence” by Cialdini. Both of these really, you know, kinda, in the zeitgeists very well known. So, what is behavioral economics and how should healthcare organizations be using this field of study?
Karen: So, you’re right in that there is a fair amount of publication out there on behavioral economics, but it is relatively new to healthcare. Behavioral economics is a science of understanding that we, as humans, are irrational. We have biases to the present, which is why we eat chocolate cake. Or for me, I have that second glass of wine. It’s sitting there in front of me. We have an aversion to loss and regret. The overly probabilities, which is why we spend over $70 billion a year playing the lottery. So, there are all these innate ways that humans behave. And rather than trying to change that, what you can do is harness it to nudge behavior or change it. So, I can give you some examples from everyday life, if that’s helpful, before we get into healthcare.
Michael: That’d be really helpful.
Karen: Yeah. So, think about Netflix. They take advantage of your laziness, or you might call it inertia to sound a little better, and they give you a six, eight seconds before rolling into the next episode to help you binge-watch. You can use this at a better advantage of employers to fault employees into 401k program. And therefore, we have closer to 70%, 80% of people participating in 401k versus somewhere in the teams. Your energy bill comes with smiley faces or frowny faces that are telling you how you’re compared to your efficient or inefficient neighbors, trying to use social proof to nudge you, or I think of airlines or any…not that people fly much anymore, or any online shopping that use a concept called scarcity, that only two left at this price. You should buy now. And so, all of that is playing on your biases, whether you realize it or not, and it’s being used in other parts of your everyday life in health.
Michael: Let’s get into the healthcare aspects of it. You know, some of the smiley faces and some that you’re talking about, kinda, makes me already think of, you know, some aspects there, but how are healthcare organizations then using those same kinds of ideas?
Karen: It’s a great question. And I can break this down to, I’d say, clinical versus nonclinical. And it’s surprising how much is nonclinical. So, recent areas that we’ve seen this when we’ve worked with clients are getting people to download an app. So that way, they start to engage with you digitally, or schedule appointments online. So, we work with Sutter Health to plan their patients to schedule appointments online. We send emails, creating a sense of exclusivity, and we got 4.9 times as many people to schedule appointments online. So, that’s a very, in our perspective, a nonclinical way that you can use behavioral economics to change the way the system interacts among the proper stakeholders.
In a clinical sense, it’s also subtle. We can get more people into condition management programs by reframing the program, creating a sense of loss and exclusivity, and when Blue Cross Blue Shield of Louisiana doubled the rate at which people enrolled in condition management program, or tobacco cessation, or weight loss programs. If you use certain forms of gamification, you’ve effectively tripled the rate at which people complete those programs. So, when you create quick wins, you create scarcity, you create leaderboards, you create all of this that… If you’re a gamer, I’m not, but if you’re a gamer, you’re gonna see all of that in your game. So, why not bring that into healthcare programs?
Scott: Yeah. I was thinking a little bit about what you were talking about, about just trying to utilize some of a little bit of gaming theory, a little bit of behavioral economics. How does that work with smaller practices? We work with a lot of practices. When I define small practices, I say is essentially 5 or even 10 or under. How are some takeaways that you can talk to some of our current people that are listening, you know, how they can use that?
Karen: And the first thing I’d say is don’t feel like using behavioral economics is something that’s gonna overwhelm you. We need to break this down into pieces and how you too, as a small practice, can create quick wins, something that’s not gonna cost you a lot. So, let’s talk first about patient experience. Everyone’s trying to improve that patient experience, especially now that it’s virtual or the like…so, make the right path the easy path. You mentioned online scheduling. That’s a patient satisfier. And maybe that requires too much technology. Think about again, making that right path the easy path. Can you eliminate steps in the patient journey?
So, that way, they have a more positive experience or there’s something called the pick and roll. And I think I’ve heard this on some of your other programs. I’m not gonna go into the examples around colonoscopy and the like and how this came about, but we know that if the patient has a positive experience, at the end of the visit, even if they had to wait for a while, and there was something bad that happened, to end on a positive note, that’s gonna be what they remember. There was one, a woman’s clinic that handed out roses at the end, and everyone remembers that as a positive experience. They left there with the rose. So, that’s making the right path the easy path, and thinking about the pick and roll for patient experience.
It’s also, if the small practices wanna increase patient adherence, right? The whole purpose of medicine is improve patient outcomes. And part of it is getting people to show up for their appointments. And we work with Mount Sinai and which they created pledge cards for patients to sign in front of the doctors saying when they were going to come back to their appointment, and they had a five percentage point reduction in those show rates just by using those cards. So, today’s day and age, we usually just go electronic and be like, “Yup, yup. I’ll put that on my calendar. I’ll show up.” So, we almost need to go back old school and have a piece of paper that people are signing to do that.
And then the third area to think about, the sort of, small practices and we can go…you know, we can talk about this some more, is you want staff to adopt new care plans and new procedures. And that oftentimes it’s hard to do because they wanna be practicing medicine, not focused on all of that admin stuff. Penn Medicine did it. They changed the default in their system and overnight, their prescribing rates of generics went from somewhere in the 30s to 50s to over 95%. Or we’ve worked with Mount Sinai and chronic kidney disease diagnostic company. And now, Sinai want to increase the rate at which these new tests were ordered and they just bundled it into a standard group of tests that were being ordered. So, they basically bundled. So, that way, those physician didn’t have to be making a decision. And so the more that the practices can think about making the right path the easy path, thinking about using the common language to interact with the patient, the more likely they are to be able to get benefit from more sophisticated programs.
Scott: Yeah. It really does seem to make a lot of sense. It’s just some basic stuff, that whole concept essentially of what’s the default, you know, and it’s…
Karen: Yeah. That’s exactly it.
Scott: Really at my small business, I wanted everybody… I’m about a generation ahead of most of the people working for me. I’m in my 50s and most of the developers working for me are in their 20s or maybe 30s, and I wanted all of them to just please participate in the profit-sharing plan and the retirement thing. Like, you know, I’m like their de facto dad, “Please, save money long term.” And I just played it the default. And so, if you wanted to back out of it, you could, and then all of a sudden, instead of it being whatever, a very low percentage of people taking the time to go on, I think we were like 80-something percent. You just flipped it.
And I can see a lot of things where, what’s the default for the patient. What’s the default for the doctor. And then all of a sudden, it’s just a lot simpler. If everybody just gets together and they say, “Hey, this is what our default should be,” it makes a lot of sense. I can even see a lot of that gamification helpful on long-term projects. You know, like diabetes where it’s just forever, man. I mean, you got to stay on your game if you wanna avoid becoming a type 1 diabetic. You have to eat better. You have to exercise and gamification can be very helpful there.
Karen: You know, that’s exactly it because in healthcare, we don’t want to take the actions to be healthy. We literally want our cake and eat it too. And the more that you can take the burdens off of a patient’s plate or a person’s plate, because these are people, the better it is. And I really like where you’re going with the default because there isn’t a lot of thought that’s put into default. Like think of a cafeteria layout or think of a grocery store. Every inch of a grocery store is thought through on what is going to go to checkout counter. What is going to be for your impulse buy? What is going to drive you to buy X, Y, or Z? There’s thinking about strategic placement.
In healthcare, someone’s setting default may be alphabetical, or maybe by price, maybe it’s by the order of which things were signed up and no one is thinking strategically about, “Well, how do I nudge people to make that decision to go down that right path?” And oftentimes, we give people 15 or 20 choices, which then leads them to shut down and make no choice and not get started at all. And so, that creates more problems in healthcare too.
Jared: Now, Karen, when you think about it, if there is a healthcare organization and they get the basic concept, they’ve heard of it, you know, they’ve heard of behavioral economics and they start to realize what it can do for them, what’s the ideal place for them to start bringing that into, say, a marketing or growth strategy? So, say a practice is trying to figure out what to do coming out of the pandemic as things are starting to subside a little bit or maybe in whatever region they’re in, they are able to start bringing patients back in for elective procedures or whatnot. When’s a good place to start bringing these concepts in and how do they even take some first steps?
Karen: So, there’s three principles of behavioral economics that people should be thinking about. One is how do you make the right path the easy path? And I think I’ve said that like 15 times already. The second is thinking about the words you’re using because words are really powerful. We know losses are more powerful than gains. We’ve talked about social elements. And then the third component is keep it simple. Too much choice gets people to shut down. So, we’ve talked about all three of those. And if you think about the pandemic and COVID-related and how do we get patients back in for their preventative screenings, get back in for chronic condition management, because like you all, I fear what’s gonna happen in a year when all these late-stage chronic conditions and cancers come to fruition because people are not caring for themselves now. And so, what I would encourage practices to do is as you’re communicating to your patient, think of common language. Think of words that they’re gonna understand. Like don’t talk about maybe the sophisticated type of test results. Instead, use the common language on what you’re doing to actually be clean in the facility.
So, for example, you know, everyone wears masks. Everyone does this. Like very factual. And they also want you to think about how do you make that right path the easy path, and maybe you can do more virtual. Let them know what it is to expect as they’re coming back in. So, it could be the new waiting room is your car. So, don’t be surprised if you’re gonna be spending time there. And then when you come in, the first thing you’re gonna be doing is getting your PURELL and going through that journey. So, you’re helping them anticipate what the new experience will be because it’s going to be different than it was before. And so, that brings your future self to the present. And that’s an important component of behavioral economics.
And then beyond that, I want to just challenge you that we should take advantage of COVID as a time to transform how physicians are practicing and how do we manage chronic conditions? How can you integrate telehealth and remote monitoring devices? And so, that way, patients don’t have to come in just to get their test results said to them anymore, or don’t have to come in to get their blood pressure taken because they can do that at home. And so, there’s the communicating what you’ve been doing, but really think about how do you use this as an opportunity to transform your practice?
Jared: I like that thought because you think about the more specific those instructions are, the more specifically we share what’s going to happen when you come back to the clinic, or when we call you, or whatever. The more specifically that is, the more trust you can build. And that’s one of the keys of marketing that we’re seeing in healthcare right now is that we just haven’t thought about that enough. I feel like we’re not thinking intentionally, we’ve still thought about messaging and branding, not in a way of how does it build trust? And we have spent quite a bit of time on this podcast discussing the benefits of increasing our engagement and communication with patients.
And so, this falls right in line with that line of thought, and it feels like just in general, like, behavioral economics, that it has the potential to solve some of the big problems in healthcare. You know, we’re talking about, kinda, what could happen right here and here and now with practices opening, and reopening, and whatnot. But then there are the macro issues in healthcare. And it sounds like there are already efforts going on to use these concepts to help solve some of those macro efforts. And I’m wondering what types of those problems it could help us solve and what it will take to get to that point?
Karen: So, if you think about… Our perspective is behavioral economics is really that last mile to transform healthcare because what it will take for us to actually transform healthcare is acknowledging and recognizing that information alone isn’t going to be enough because our challenge in healthcare is particularly the consumer/patients. And even the physicians and the clinicians, either behavioral deficit, not an informational deficit. And so, we have inertia, we go down the same path every day. And then we tell our patients, “You’re overweight. You need to lose weight. You need to eat better.” And that’s lifestyle. And that is just so hard to change.
And so, the more that you can think about this from I wanna improve my patient experience, and then I want to improve patient outcomes, they’re very different. And from our perspective, it’s easier to improve patient experience probably because we’re not the ones actually executing on it, but it’s easier to improve patient experience because that’s more processed and that can transform healthcare though, by making the journey less painful and more consumer-focused, just like a one-click on Amazon. I no longer need to go to a store to buy something. They’ve just made that so simple for me.
How do we make interacting with the healthcare system as simple as that one-click button? Then there’s getting patients to actually change their behavior, which is much harder, which comes back to that gamification and blame. But the more that you can take it completely off their plate, so they don’t have to think about it like med refill. Just have them show up at the house, right? I don’t have to think about that and that’s one less challenge I have to my medicine. So, both of those areas are places where you can really bring in behavioral economics to transform our experience.
Michael: Yeah. Karen, we talked a little bit about this right before the show, but you know, I’d love to hear some about how this type of study, because COVID-19 is just a very obvious example of how resistant we are to change our behaviors and how tough it is for an entire nation to start changing behaviors and to start making these kinds of differences. So, what is it that your group is doing, kind of, in the midst of all this to help out with some different organizations, kinda, implement some kinds of changes?
Karen: We, as an organization, have had some change too. We all have, right? We’ve all done remote and what we’ve been doing with employers, and they could be hospitals, they could be nursing homes, we’ve actually even stretched and done work with a beer manufacturer.
Karen: And it was how to nudge employees to stay safe at work and outside the workplace. And by safe, I mean, you know, wear your mask, wash your hands, stay physically distant, socially distant apart from people, because what ends up… Back in March, April…I live in the New York City area. So, we got really hit in March, you know. We really bugged down. And everyone’s like in a panic and you’re aware of what you should be doing, but then what happens over time is we’re not getting feedback. So, I mentioned before we have our present self and our future self.
So, taking a step back, an example would be our present self sets the alarm to go to the gym in the morning and our future self hits snooze. And so, we are different in the present and the future. And so if we are not getting near-term feedback that I don’t see the negative feedback on, “I’m wearing my. It’s helping me. I don’t see the positiveness that I am not spreading germs. I don’t see that washing my hand is helping.” And so, over time, we’ll want to stop and do that. And so, we’ve created a solution to help the employers keep the adherence ongoing over time. And I can talk more specifics about that if that’s helpful.
Michael: Yeah. It’d be interesting that, you know, one of the funny things that we had, kinda, circulating around down here in Louisiana, we have crawfish boils and I’m not native to Louisiana. So this is a very new experience to me, but, you know, crawfish, that whole, you know, set spread that comes out is all super spicy and it can really start accumulating over time. And the way that they said remember how to wash your hands. You know, at the beginning of everything was, you know, pretend like you had just gone to a crawfish boil and wash your hands like that before you touch your eyes. You know, like, that’s the level of thoroughness you need to bring to some of that, kinda, washing. I’m sure that there’s a little different language for, you know, other parts of the country, but yeah. How are employers implementing these kinds of behavioral changes?
Karen: That’s fantastic. We were working with so many in Louisiana and we were measuring social distancing by alligators. And when we were working with a beer manufacturer, we measured social distancing by the number.
Karen: And so it makes it relevant. It, you know, I walk my dog, the leash is six feet. So, I’m like, “Now I know I’m six feet from you.” He or she. That leash is six feet. And so, it is bringing it common language is important in healthcare and in adhering to COVID. We also brought in some kind of tools of social proof. Others are doing that, created pledging. I mentioned before pledging to get people to show up for appointments. Well, we created pledges of, “I am staying socially distant from my uncle John or from my grandma or mom,” or, you know, and people put them on their hats of their jackets. So, one, it was them committing, but it was also a social statement showing other people and reminding them of respect what I’m doing.
And so, there’s different tools there. And then there was also we can create the equivalent of, you know, number of days without an accident, like a number of days of COVID free. And so, some of the challenges we’ve been finding, though, if you think of the hospital, the essential workers, is everyone needs to unwind. And, you know, as summer goes on, you want to go to crawfish boil, you want to go to the barbecue, it’s remembering to keep socially distant and how do you respect other people who want to and need to be doing that. It’s reframing about why you’re doing it to help others.
Michael: That is an interesting challenge. Like, so, I have a daughter with a chronic condition and as a part of our household, you know, we’re really trying to lock down on that mode, “Hey, we still have to really watch it. We still have to really be careful around people. We still have to kind of keep that distancing.” And families that are in different scenarios where they don’t have somebody with a chronic condition, maybe they don’t come in contact with older relatives very often, they just have a very different perspective.
And so, trying to have those conversations right now is just starting to lead to some tension and some awkwardness around like, “Hey, we’re just not gonna be there right now and I’m sorry.” You know, but everybody’s trying to have to figure out that line right now. And it’s tricky even outside of, you know, what we just think of as healthcare or what just think of as like the employee space like everybody’s trying to figure out that line right now.
Karen: I think if we don’t, as a society, figure out that line, we’re gonna have a massive increase in COVID cases. And then it’s gonna ripple right back into the healthcare industry. Like we just talked about how do you get the telehealth? How do you get people feel uncomfortable coming back into the doctor’s offices? And so, it becomes that vicious cycle.
Michael: Absolutely. Talking about this really does remind me of a lot of conversations around whether healthcare is reactive or proactive. And so much of this kind of conversation seems like this is how we can be more proactive to try to prevent more stuff coming in. So, breaking away from this for just a second, we’re, kinda, getting close to the end of the show, but I wanted to bring this up as, kind of, a deeper level topic because this is something that I think about quite a bit in terms of marketing and in terms of how we’re trying to guide people through a particular sales process or guide people through some, kind of, decision-making process.
There are bad actors that use these different tools, right? Whether they use marketing, whether they use behavioral economics, and, you know, how do you help define that line for people of, “Hey, this is a healthy way of using this set of tools,” versus, “this is not a healthy way of using these sort of tools?”
Karen: That is a great question because I would say gambling uses it to their advantage, not to yours. Even some retailers and grocery stores use it to their advantage not to yours, although not quite as bad as gambling. And so, we think that this is, you know, a bit of asymmetric paternalism. We wanna nudge you down a certain path, but we don’t wanna take your choice away. So, when we work with providers, or digital health companies, or whoever it is that’s trying to drive a behavior change, maybe there’s three other options that are less preferred, but you need to have them out there. And so, just make it a little bit harder to get them and feel click down. And so, think about where you want people… there’s pretty much situations where the right choice is essentially set, like how you have defaulting people into 401k savings or prescribing generic. For most situations, that’s best. So, you almost make that the default.
And there’s another thing called active choice, which is where you need people to choose A or B to move forward. And that’s where you can’t, as a society, say, “Yes. This is really good for everyone.” But, you know, between these two it’s to be good for everyone. And so, nudge them in that way. And then there’s the third, which would be really needs to be microset. So, you just have a longer list. And so, you’re going back to the question around how do you use this for good in healthcare if you make the right path the easy path that nudges people, and if you use the common language, that helps people make the right decision.
Michael: Absolutely. I have so many other things I could talk to you about, Karen, but I wanna be respectful of everybody’s time, and wrap up for the day. But I think that this is a lot of conversations that I’m having with folks in, sort of, other areas of healthcare, this kind of topic keeps coming back up. How do we make the easy choice the right choice because there’re so many things like… And this can go into so many other areas where you have like things like social determinants of health. Like if there’s not good food in that area, people are gonna have bad health over the long-term. It’s just, you know, we’re just seeing that over and over. So, I think that there’s a lot more to unpack in this area and it’ll impact, certainly a lot of current problems that we’re facing. So, again, thank you so much for coming on the show. I love the topic and it was a pleasure talking with you.
Karen: It is great to be here. A great discussion.
Michael: And thanks for listening, everybody. Have a great week.
Announcer: Thanks again for tuning in to the “Paradigm Shift of Healthcare.” This program is brought to you by P3 Inbound, marketing for ortho, spine, and neuro practices. Subscribe on iTunes, Google Play, or anywhere you listen to podcasts.