Behavioral Economics Applied to Digital Health: How to Champion the Human in Healthcare

Feb 27, 2023 | Health + Healthcare, RoundTable Connections, Technology + Media

Three Tips for Organizations Trying to Apply Behavioral Economics:

  1. Keep it simple, less is more.
  2. Get somebody who knows how to do it — leverage expertise of real professionals.
  3. Don’t fight human behavior head-on because you’ll lose — understand it and work with it, not against it.

Have you ever wondered what makes gamblers risk more, after both winning and losing, even though the odds remain the same? Or why people procrastinate exercising, even if they know it will benefit them? The answer: we’re human, and humans are subject to emotions, values, outside factors, and context that affects our behavior. We don’t always make practical, optimal decisions.

Behavioral economics combines elements of economics and psychology to understand how and why people behave the way they do in the real world — it considers people as human beings who are subject to emotion and impulsivity, and who are influenced by their environments and circumstances. This differs from neoclassical economics, which assumes that people will always make well-informed, rational decisions.

An important part of behavioral economics is Nudge Theory, which is a way to non-coercively manipulate people’s choices to lead them to make specific decisions. A nudge will alter a person’s behavior in a predictable way, without forbidding any options or significantly changing incentives. For example, sending a reminder to schedule a doctor’s appointment, or ensuring healthier food is more noticeable in a cafeteria.

The principles of behavioral economics can be leveraged across a wide range of industries, including advertising strategy, public policy, finance, market research, and healthcare. Digital health, which includes digital care programs and health technologies, enhances the efficiency of healthcare delivery to make medicine more personalized and precise. According to Heart+Mind’s recent Pulse survey, one out of three (35%) Americans say they use digital health tools today and 76% believe they would be helpful to them. With new advancements in technology — like the rise of artificial intelligence — to create these hyper-personalized customer experiences in digital health, applied behavioral economics can motivate action and drive dramatic impact. We tackled this topic and met with industry experts Elys Roberts, Founder and CEO at BEESY Strategy, Karen Horgan, Co-founder and CEO at VAL Health, Chris Wasden, Chief Strategy Officer at Twill, and Heart+Mind’s own Shawn Wade and Jennifer Airey.

Related: Connecting Back to Ourselves

The Science of Decision Making

To guide, motivate, or influence the decisions of others, it’s important to first understand how and why people make the decisions they do — which can be a tricky thing to study. Humans are complex beings, and the way we make decisions is not always practical or rational.

“I think of behavioral science or behavioral economics very simply as the science of decision making,” Roberts said. “Decision making can be both conscious, thoughtful, effortful decision making, but it can also be non-conscious, effortless, automatic, habitual decision making. Think of it as maybe the pilot brain and the autopilot brain. For the vast majority of our time, it’s the autopilot that’s in control, and we have to proactively set up the pilot brain, or take over from the autopilot brain, to make those thoughtful cognitive decisions.”

Karen Horgan expanded on this point by saying that in essence, humans are lazy, and behavioral science can take advantage of that — in a good way. Making the right path the easy path is often a good way to take advantage of the convenience that humans crave.

“Once with Penn Medicine, my co-founders, they wanted physicians to increase the rate of prescribing generics; and branded generics were about a 34% prescription rate,” Horgan said. “Overnight, in the electronic medical record, they changed the default to be the generic from the branded, and it went from like 34% to 94% prescribing. It plays on the fact that we, as humans, are lazy. And so, don’t ask me to not be lazy, just take advantage of that in a good way. Use it for good.”

Bringing Behavioral Economics into Digital Health

When using behavioral economics in digital health, there are three phases: the Launch Phase, the Learn Phase, and the Last Phase, Horgan explained. The Launch Phase includes motivating someone — whether it’s a pharmaceutical company, an employer, or a patient — to have an interest. Behavioral economic principles, such as value propositions, framing, or loss aversion can really make a difference during this phase, to pique the interest of the person you’re targeting. Horgan gave an example of a condition management program; they effectively achieved a 44% increase in enrollment just by changing the content and the subject line of emails to inspire people to take action.

“Sometimes making it simple makes a big difference,” Horgan said. “Once you’ve got them actually intrigued, now we get to what we call a Learn Phase. The Learn Phase can last anywhere from 10 minutes to a week, and it oftentimes involves actual registration. Once they get in, what are you asking them to do? And how do you get them to come back? Here we’ll use slightly different tools, or would recommend using slightly different tools, than in the Launch Phase, because here we can use a little bit more on defaults, and truly how do you make the right path the easy path in digital health…For example, we worked with a digital health company, and we eliminated steps in registration and got a 70% increase in registration.”

Holrgan explained the Last Phase involves motivating people to act continually, like taking blood pressure or checking glucose levels multiple times a day. How can you get people to use digital health tools in an ongoing, habitual way in their everyday lives? Behavioral economics says principles like intrinsic vs. extrinsic motivation or voice of authority can help motivate in this phase. This is where it gets increasingly difficult, as you not only have to motivate people to do something habitually, but you have to also tailor your approach depending on their needs.

“You’ve got to figure out how to maintain that and continue to have them do behaviors,” Wasden said. “The challenge with this…is that the way you deliver those capabilities differs by stage of change. For example, if you’ve got somebody who’s not considering exercising at all, you’re not going to be successful with Couch to 10K as the first activity they do. You’ve got to get them to understand what they need to do and why they have a problem that they don’t think they have. If you’ve got somebody who’s already actively involved in running a 10K every week, the Couch to 10K program is not going to be the activation program for them. They’re already engaged in a habit, so you’re talking about improving in that habit in some way…The way that you market and activate is very different for each one of those stages.”

Heart+Mind’s Maury Giles, who also moderates our Connections series, shared a similar case study involving a revolutionary approach to smoking cessation in the American Legacy Foundation’s BecomeAnEX campaign. Giles explained the human insight applied was if you want to help more people effectively quit smoking you need to stop asking them to quit; instead, the key is inviting them to re-learn life without cigarettes. The campaign led to the BecomeAnEx online community that still runs today and was recognized with the 2009 Ogilvy Award for health and public service campaigns due to applying these principles.

Championing the Human

Wasden touched on the importance of focusing on the human and putting the patient first. For businesses – like insurers, employers, or digital health developers – it can be easy to focus on the company’s interest first and disregard the patient perspective, which ultimately will make it harder to motivate the patient. But if you want to make a real, authentic impact on people’s health and wellness, you need to focus on them first.

“Most of these companies, when they approach digital health, they almost always approach it by what’s in it for them, not what’s in it for the patient,” Wasden said. “They almost don’t even care about patient value. Now their argument is, well, if the patient would just do what we say, they’d be healthier, right? But they don’t think about it from a patient’s perspective…They are very selfish in how they want to use digital therapeutics, because it’s all about them. It’s not about the patient. So, if you want patients to actually use these products, it’s got to all be about the patient and then benefits accrue to you as a result of focusing on the patient first, not the other way around.”

With the addition of new technology, like AI, it will be interesting to see how that affects the digital health space, and the way people make decisions — especially when it comes to their health.

“To see it finally explode into just the beginnings of operationalization and actually making these things happen is super exciting, and it’s a delight to watch,” Shawn Wade said. “We’re finally at the cusp of operationalization, as algorithms in AI are going to radically constrain the environment in which people get to make decisions.”

At Heart+Mind Strategies, we believe in championing the human to drive meaningful impact. This starts with empowering our clients with a true understanding and empathy for the needs, desires, and behaviors of the people who matter most to their success. Reach out to learn more about how we can help your organization truly resonate through your marketing, advertising, customer experience, product/service innovation, and/or reputation management efforts.

If you want to learn more about how behavioral economics can help your business, turn to Heart+Mind Strategies. We are a research-led consulting firm that uncovers how people think, feel, and make decisions and uses that to help you apply these insights to achieve your specific goals. Our scientific approach to understanding how individual and societal values influence decision making is why many leading global brands and organizations work with us. Connect with us.

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