This Friday, John McCain and Barack Obama will presumably (John McCain willing) square off in the first presidential debate of the season. For people like you, interested enough in politics to be reading this post, the outcome of the debate is already largely determined — your favorite candidate will not only win the debate, but your support of the candidate will be even stronger than before, and your view of his opponent — well, frankly, you will wonder why anyone could consider voting for him.
Debates are polarizing not simply because of their ridiculous formats, with red lights blinking when the time is up, and with embarrassing questions from the moderators followed by non-answers from the candidates. Instead, they are polarizing in large part because of the way people evaluate information on topics that they feel strongly about.
In a classic 1979 study, three Stanford psychologists recruited students who held strong opinions about the death penalty, and exposed them to hypothetical research results that either confirmed or challenged their established opinions.
Suppose you are one of the students and you begin the study already strongly opposed to the death penalty, because you don’t think it deters criminals. Imagine that the researchers now present you with a brief description of a new study that demonstrates a deterrence effect. How will you respond?
As it turns out, you’ll begin to waver… “Hmm, maybe I was making a hasty judgment,” you’ll wonder.
But now the researchers give you a longer description of the study. The study includes data from 10 states over a decade, analyzing homicide rates. Your brow begins to furrow: Only 10 states? And what about historical trends leading up to this time period? Why only one decade? And why didn’t they study more common violent crimes, like armed robbery? With this more elaborate information, you confidently conclude that the study is so seriously flawed that it does nothing to challenge your preconceived notion of the death penalty.
Meanwhile, another student reads the same study. This student, unlike you, has come in to the exercise favorably inclined toward the death penalty, and is very impressed with the study design: 10 whole states! For 10 whole years!
Kind of reminiscent of the Annie Hall scene, where Diane Keaton’s character is asked by her psychologist how often she and Woody’s character have sex, and she replies that they have sex practically all the time, too often in fact, something like three times a week. Meanwhile, Woody’s character is asked the same question by his psychologist, and provides a starkly different opinion — reporting that they almost never have sex, barely more than three times a week.
Like the characters in Annie Hall, the students and the Stanford came to very different conclusions even though they were exposed to the same facts. Indeed, those who favored the death penalty were quite critical of studies that denied a deterrence effect, while opponents of the death penalty thought the studies were quite excellent.
The findings from the Stanford study are even more distressing than I’ve described so far. You see, all the students were given examples of conflicting studies — one that proved deterrence and one that seemingly refuted it. All saw critiques of each study, as well as responses to the critiques. And the order of the studies was randomized by the researchers — pro or con — across students. Even the study designs were flipped around randomly: sometimes the pro-study took place in 10 states, and sometimes the con-study did.
The result? The more information students saw, the more polarized their opinions became. Pro-death penalty students became even more in favor of the death penalty, and those who were previously opposed to the death penalty became even more opposed to it.
We humans can’t help but perceive evidence through the lens of our existing beliefs. McCain will really prove to his detractors what a terrible president he will be, as will Obama to his detractors.
So when you wonder how your mother-in-law can watch the same debate you watched, and completely overlook the obvious flaws in her preferred candidate, remember that she is probably wondering the same thing about you.
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Bankers' Brains, Market Behavior
This week’s version of John McCain — the populist version — is blaming our current, um, situation on greed. (With such strong fundamentals in our economy, we couldn’t call it a crisis.)
Last week’s John McCain, and the one from the week before that, and the week before that, and the one who has served in the Senate for two decades, would not have been so negative about greed. As a fan of free markets, this long-standing version of McCain believed that greed pushed markets forward, causing people to take the kind of risks that propel economic innovation. The new McCain pretends that he believes markets are flawed because they encourage greed. The old McCain would have seen today’s banking debacle as a rational market correction to a decade of generous monetary policy from the Federal Reserve.
The old McCain was wrong to have such unfettered faith in markets. People are not nearly as rational as the market evangelists in the Republican Party would have us think.
But the new McCain, the one who insincerely blames our banking crisis on greed, is equally wrong. Rationally directed greed would never have led us to this crisis. Greed alone is not the cause of recent business failures. Trust me, the former directors of Fannie Mae and Freddie Mac are not jovially counting their earnings and laughing at us taxpayers for providing them with generous severance packages. The leaders of AIG and Lehman Brothers are not congratulating themselves for raking in the dough while running their companies into the ground. (That said, I think any solution to this problem should involve large paybacks from these extremely wealthy people.)
Both the old McCain and the new one don’t realize much more fundamental limitations of human nature that, when combined with unfettered markets, are a recipe for disaster. Let me illustrate one of these limits, a strange kind of herd mentality that infects our species, by asking you to imagine a situation that most of you will never be in.
You are a medical student, spending a month on your OB/GYN rotation, learning how to deliver babies and how to take care of female reproductive health. You’re spending the morning in the operating room, and the head surgeon has just finished prepping a patient. The patient is now anesthetized and the surgeon looks your way and says: “Hey student, come over here and feel this pelvic mass.” The surgeon is asking you to perform a pelvic examination on this woman, so you will be better at recognizing abnormal masses when you examine future patients. But you are concerned — you’ve never met this woman before, and you realize that you would be probing her most private parts without her permission, offering her no benefit at all. You would simply be practicing on her anesthetized body. What would you do?
When non-physicians are asked to consider the scenario, they say they wouldn’t feel right about examining this woman without her permission. Indeed, people entering medical school feel strongly that it is important to ask for such permission. But in my research, I have discovered that graduating medical students frequently feel that such permission is not necessary. In fact, they experience a significant shift in their opinions shortly after completing their OB/GYN rotations.
Why do students’ views change so much? Because they learn through example. They come to respect the surgeons conducting their training, and learn that the surgeons are generally good people — motivated to help patients and to teach students. So when respected surgeons invite them to conduct these pelvic examinations, their moral concerns clash with their opinion of the surgeons. Ultimately, many students reconcile this clash by becoming less concerned about the morality of examining women without their consent.
What do pelvic exams have in common with our banking crisis?
I expect that in the last few years, many financiers looked around and saw their peers taking on increasingly risky mortgages. Their rational sides worried that such practices were unacceptably risky. But honestly, who can calculate the exact risks of such practices? They knew that their peers were very smart. They recognized that the institutions their peers were working at were historically cautious. So they followed suit. Meanwhile, their peers glanced back in their direction, and came to the same conclusion.
People are often prey to social norms and peer pressure. We often judge our own behavior by comparing it to the people around us. Sometimes our rational instincts compete with these herd instincts, and in such cases the herd instincts often win.
What neither the old McCain nor the new McCain recognize is that free markets, for all their wonders, can be disastrous when left unfettered to compete with the irrational side of human nature.
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A Moose Killing, Oil Drilling Hockey Mom…Just Like Me?
With the nomination of Sarah Palin as vice presidential candidate, the McCain campaign seems to hope that the election will hinge upon personality rather than policy, on candidates’ life narratives rather than their 15 point energy plans. Recognizing that they cannot win based on whose policies benefit the largest number of people — Republican health plans and tax cuts not being friendly to the middle class — the grand old party instead appears to be betting that the combination of an academically challenged military man and a moose killing hockey mom will resonate so much with voters that the electorate will ignore their policy proposals.
But it is dangerous to dismiss the Republican ticket as one of personality over policy, because for many voters, policy is inseparable from personality. You see, 15 point plans are inscrutable to most of the general public. For such people, the only way to evaluate such plans is through the lens of a candidate’ s life narrative, by sensing whether the candidate has come to the same conclusion about a topic that the voter would have come to if the voter had had the time to think things through.
Most people don’t have the inclination to become informed about complicated political issues. How should we handle Iran’s nuclear efforts or Russia’s aggression against Georgia? What should our country do about global warming, Medicare costs and the mortgage crisis? With most of our citizens still unable to find Iraq on a map, we can’t expect people to vote for presidential candidates based on the candidate’s vision for how to promote clean coal.
In a complicated world, many voters fall behind the candidate who they believe shares their values, and who comes culturally speaking from a place closest to their own. This explains part of the power of the three G.’s for the Republican Party: God, guns and gays. Ask people to list the most important issues facing the country, and the three G.’s won’t usually come out on top. But even though most voters care more about the economy than about whether to ban assault rifles, many of these same voters don’t have a clue about what the government should do to help the economy. So when two candidates spar over the economy, and one candidate “looks like me” — likes to hunt, say, or goes to a church like mine — whose economic plan am I going to trust?
In trying to identify which candidate thinks most like they think, many people also pay close attention to whether a candidate comes from their preferred party. In this respect, voters are a lot like sports fans. If, for example, the personnel of the Los Angeles Lakers were traded, whole cloth, for that of the Boston Celtics, Celtics fans would quickly embrace Kobe Bryant and his teammates while rooting against Paul Pierce and company. Sports fans are amazingly flexible in their attachment to specific personalities. I’m sure the Dallas fans hated Terrell Owens when he was on the Eagles, put off by his grand standing and poor sportsmanship. But now of course, with their Super Bowl hopes riding on his broad shoulders, most cowboy fans love him. Ultimately sports fans don’t seem to root for athletes as much as they support whoever is wearing the right color jersey. In much the same way, the general public supports the policies of the people in their parties. If George Bush had brought out a tax cut seven years ago that was geared largely towards the middle class, it would have been embraced by most members of his party. But once he settled on the current form of his tax cuts, most of the party faithful were quickly convinced that Bush had chosen the best possible way to cut taxes.
I don’t mean to take this point too far. Boston Celtics fans would still hold nostalgic feelings towards Paul Pierce if he was traded away, and would probably root for him to beat anyone but the Celtics. And voters who identify with the Republican Party will not go along with any policy that a Republican president puts forward. A Republican president who decided to ignore Roe V. Wade when nominating Supreme Court judge would quickly be vilified in the party. But for the hundreds of policies in which people don’t have strong preformed opinions — how to handle Fannie Mae, what to do about the globalization of the economy — the best way to figure out the right policy is for the voter to figure out which candidate is “most like me”.
Thus, we can expect the Republican base to rally behind McCain and the policies he proposes between now and November. And now, with Sarah Palin resonating with the Republican culture of small-town, gun toting individualists, the dismal policies that McCain is proposing could play an even smaller role in influencing people’s voting choices.
To win elections, it is not necessarily enough to favor policies that align with the interests of the middle class, because people in the middle-class won’t necessarily grasp the details of those policies. In saying this, I mean nothing but respect for most voters. It is simply impossible for most people, including myself, to become well-informed about more than a few important political issues.
Obama is right to point out the benefits of his tax cuts for the middle class, especially compared to McCain’s embrace of the Bush tax cuts. His campaign needs to push hard on the issues, showing people that the candidate has real substance behind his otherwise vague hopes. But if people think Obama is an elitist, his policies won’t resonate with them. That’s why Obama has to keep returning to his biography, and must do so in a way that not only sheds the elitist label the Republicans are trying to pin on him, but also emphasizes the commonness of his experiences. They must show that Obama, despite being such an extraordinary person — with an absent father from a foreign country, a long struggle for racial identity, and the brains and hard work to make law review at Harvard — is also like them.
The Obama team appears to be trying to address this issue. That is why we know more about Joe Biden’s train riding habits — knowing the name of each conductor — than about his efforts to promote the partitioning of Iraq a couple years ago. And that’s why those of us who are passionate about policy, and even informed about some policies, can expect to be disappointed by the way both campaigns are run over the next two months. Because both campaigns are likely to turn up the volume on personality and culture. We will see the Republicans work hard to make Obama look like he’s foreign, to make people suspicious about his policies. We can hope Obama counters these attacks with an effort to make himself look more normal, while highlighting the many ways in which the two Republican candidates are far from normal people.
For Obama to win, he needs to convince people that he shares their basic values, and that they can trust him to approach the many challenges of the Oval Office the same way they would approach them if they were forced to engage in the issues of our day.
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Simple Economics, Complicated Medicine
Seven days into the patient’s hospital stay, his doctors realized they had fought a losing battle. The patient, an overweight smoker with a touch of diabetes, had come to the emergency department with shortness of breath. After a series of tests in the emergency room, he was given a dose of antibiotics for possible pneumonia and admitted to the hospital. His condition deteriorated quickly and now, on a ventilator in intensive care, he was unconscious and a chest x-ray showed that his lungs had completely filled up with fluid. Over the next couple of days, after long discussions with his family, the doctors and nurses withdrew his ventilator and the patient passed away.
Should the hospital be paid for taking care of this patient? Traditionally, hospitals in the U.S. are paid for services rendered, regardless of whether the patient benefits from the services. Intensive care stays cost money, and many patients in such units die despite the care they receive. Hospitals can’t afford to be paid only for those patients who survive such ordeals.
More recently, however, healthcare reformers have questioned this payment mechanism, asking why healthcare providers aren’t paid more often according to the quality of their care, rather than the intensity of this care. Common business practice holds that when you buy a faulty product, you get your money back. The same doesn’t seem to hold for hospital care.
Economics has taught us a number of simple but profound truths about how markets behave. For instance, as the supply of a good increases, the price of that good should drop. When looking at the economic mess we Americans call a “health system,” then, it seems only reasonable to turn toward these simple truths when considering how to reform health care.
Hence the power of the pay-for-performance movement in medicine. The idea is simple — human beings, as economists have taught us, respond to incentives. If we reward doctors for providing high quality care, or punish them financially for providing less than optimal care, then doctors will do better at their jobs.
Unfortunately, as shown in an article in July’s issue of the prestigious Annals of Internal Medicine, simple truths often don’t work in healthcare. The authors of this study focus on the problem of pneumonia, the illness that killed the patient whose story opened up this essay.
Pneumonia is an infection of the lungs, often caused by bacteria. Pneumonia is often deadly. Therefore, if patients are going to survive this disease, they need rapid treatment with antibiotics. Indeed, when a group of pneumonia experts reviewed the medical records of several thousand pneumonia patients, they discovered that those who had received antibiotics within four hours of arriving at the emergency department were significantly more likely to survive than those who did not receive them so quickly.
It wasn’t hard for reformers to look at this evidence and conclude that those doctors who give pneumonia patients antibiotics within four hours should be paid more than those who do not. Pay for performance, not for poor performance.
Only one problem with this plan however — it creates a hoard of problems.
Pneumonia, you see, is often difficult to diagnose. When a patient comes to an emergency department with shortness of breath, doctors like me are going to wonder whether it’s from pneumonia, asthma, or congestive heart failure. We’ll also consider more urgent problems, like a potentially-fatal blood clot in the patient’s lungs, or a blockage of one of his coronary arteries, leading to a heart attack.
What should we doctors do in these situations? Well of course, we should move quickly to make the diagnosis. If the patient looks relatively stable, we should hold off on any preliminary treatment for a short time, while obtaining the kinds of tests that will point them toward the right diagnosis.
Unfortunately, the right diagnosis doesn’t necessarily announce itself in the emergency department. A good chunk of people with pneumonia come to the emergency department without fevers. They are often so dehydrated from their illness, that their pneumonia doesn’t show up on chest x-rays. It’s pretty common, in fact, for emergency department doctors to treat patients for multiple problems at the same time, because they aren’t sure of the diagnosis. I’ve taken care of many patients in the hospital who, even after a few days of treatment, leave me befuddled as to whether they were short of breath because of congestive heart failure or pneumonia.
Why this brief introduction to the difficult diagnostic life we physicians face in the hospital? To reveal the pitfalls of simple economic schemes (pay for performance, dude!) on the practice of medicine. You see, when insurance companies began rewarding doctors for administering antibiotics to pneumonia patients within four hours of arriving at the emergency department, many physicians raised a proper and justified stink. They pointed out the strange behaviors that would follow from this incentive scheme — doctors would give too many patients antibiotics, even stable ones who could have waited another hour for test results. Overuse of antibiotics leads not only to antibiotic resistance, but also creates potentially life-threatening side effects. And this payment scheme, by making doctors so concerned about treating pneumonia quickly, diverts their attention away from other possible diagnoses. In other words, the already complicated job of diagnosing sick patients gets even more complicated, thanks to these simplistic reforms.
Beware of business people and politicians who promise that a little common sense — pay for performance — will improve our healthcare system. The same kind of quality improvement processes that make companies more efficient at producing widgets, and the same kind of financial incentives that maximize the performance of door-to-door salesmen, won’t improve the way doctors like me treat patients who come to us struggling for air.
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