Episode #60 – Behavioral Economics in the ‘Last Mile of Healthcare’ with Karen Horgan

Dear Friends & Colleagues,

The phrase, “Last Mile of Healthcare,” is used to describe a number of situations in healthcare.  First, it’s been used to describe the value-laden interface between a provider and a patient.  Second, it describes patients in the context of their life – as individuals making healthful as well as unhealthful decisions.  It is in these so-called ‘last mile of healthcare’ moments that the issue of behavior is paramount – provider behavior and patient behavior.  The metaphor has significant ramifications in population health as well as in public health.  For example, chronic disease management, which now accounts for the majority of healthcare encounters, as well as costs, is all about behavior change.  It’s not so much the advice or treatment as much as the follow-up that really makes the difference.  Despite all of our advances, sustained behavior change remains a holy grail of healthcare delivery.

This week’s guest has made it her career ambition to tackle this issue head on.  She and her colleagues are consumed by the issue of engagement and behavior change.  Their tool box is called ‘behavioral economics’.  Karen Horgan is the CEO and a co-founder at VAL Health, which she started with her colleagues Kevin Volpp MD and David Asch.  I’ve been a long-time fan of Dr. Volpp’s work and had the wonderful opportunity to interview him on this podcast a while back .

Behavioral Economics provides an evidence-based array of methods to create healthful behavior change. There have been a plethora of recent studies demonstrating how Behavioral Economics can greatly advance how we communicate and engage with patients, as well as with providers.  As Karen points out in this interview, these market-tested techniques are used in many other industries, as well as in public health campaigns.

In this interview Karen will share:

  • The basic underlying principles of Behavioral Economics.
  • Illustrations of the most powerful Behavioral Economics techniques used to influence healthy patient behaviors as well as value-based provider behaviors.
  • A number of impressive examples of how Karen and her colleagues at VAL Health are deploying Behavioral Economic initiatives with provider and payer clients.
  • Why Behavioral Economics isn’t more well known in healthcare; where she’s seeing greater adoption; and how long she believes it’ll take for general adoption to hit that exponential inflection point.

Up until now, in our Fee-For-Service dominated market, patient behavior and follow-up has not really mattered.  For the most part, healthcare systems, provider groups and individual clinicians do not get paid, bonused or dis-incented based on outcomes.  But, as the market shifts to value-based payment, both provider behavior – in terms of appropriate utilization and quality care – as well as patient behavior, will actually make a huge impact on revenue.

From my perspective, it’s exciting and encouraging.  Here we have a scientifically proven approach to influence positive behavior, an approach that does not manipulate behavior or force compliance, but instead makes it easier for people to do the right things to enhance health outcomes.  The vision that Karen Horgan paints is a world in which the way we communicate and engage with patients will include Behavioral Economic techniques as a matter of course. It will just be the way we deliver healthcare. I, for one, would like to see us nudge this along a bit faster.  But in the meantime, I’ll be closely following the work that these folks are doing to further validate and advance one of the toughest nuts to crack in healthcare – our own behavior!

Until next time, be well!

Zeev Neuwirth, MD