Peter Ubel

No sooner had the Obama administration committed a billion dollars to comparative effectiveness research than the critics began laying out their concerns: such research is a prelude to rationing, they said; it threatens to thwart doctors’ and patients’ abilities to make their own decisions. It will transfer too much power to government bureaucrats and treat medical practice like a cookbook.

Now that the Institute of Medicine has issued its priorities for comparative effectiveness research (CER), I will look at a common criticism: that it acts as if medical care is a “one size fits all” enterprise, and thereby forces policy makers to make blunt decisions that will unjustifiably harm people who don’t respond to medical interventions the way an “average” person would respond. This concern is legitimate, but an intelligent use of CER should allow us to avoid this fate.

If your life, like mine, has been touched by breast cancer, then you probably share my hope that researchers will find new treatments to reduce the harms of this awful illness. But if you also share my concern for the fiscal solvency of our nation, you might also be disturbed at the high price of some new cancer treatments.

Consider a drug like Avastin: a treatment that increases life expectancy of patients with some metastatic cancers by interrupting blood flow to the tumors. Avastin can cost more than $100,000 per patient, and in some cancers leads to an increase of only two months in median survival. Two months for $100,000—a steep price to pay.

With medical costs consuming an increasing portion of government budgets, and with U.S. businesses struggling to offer employees healthcare coverage, many experts contend that we cannot afford treatments that bring such modest benefits at such a startling price.

How might comparative effectiveness research inform such issues? CER strives to provide information to guide decision making. A comparative effectiveness study might evaluate the cost effectiveness of competing breast cancer treatments. Or it might not analyze cost at all, and focus instead on estimating the relative impact that alternative treatments have on people’s quality and quantity of life.

In neither of these cases would CER, on its own, show us whether to use these treatments. Like its name suggests, CER promises to provide decision makers with information on the relative effectiveness of common medical interventions, so that government payers, insurance companies, doctors and, yes, patients can spend their health care dollars more wisely.

To understand the “one size doesn’t fit all” criticism, let’s suppose that a new drug increases median survival in patients with metastatic breast cancer by two months. That doesn’t mean that it increases everyone’s survival by two months. It might have no effect on the majority of patients, harm a small minority, and bring huge benefits to another minority.

CER, by lumping all patients into one group, would ignore these important differences. And if policymakers, unimpressed by this two-month figure, decided not to pay for this drug, some patients will lose a chance at these huge benefits.

This criticism of CER, however, overlooks more nuanced ways decision makers can potentially use CER information. With the right data, CER can improve medical decision-making by splitting patients into relevant groups, rather than lumping them into a single group.

For example, if we know in advance that patients who meet certain criteria stand to gain much more than other patients, then CER is a tool to help identify this subgroup. A treatment that costs $600,000/life year across all patients may be much more cost effective in a specific subgroup of patients.

A treatment that brings no benefit to the majority of patients but a substantial benefit to a minority of patients could very well deserve to play an important role in the treatment of that subgroup of patients. CER can potentially identify such subgroups. Indeed, if our country starts emphasizing comparative effectiveness in making treatment coverage decisions, it will give researchers in academia and in industry an incentive to find out which patients stand to benefit the most from various healthcare interventions.

On the other hand, if we do not know in advance who will benefit from a specific treatment and who will be harmed – if we can’t, for instance, figure out who will gain years rather than months of survival from the drug – then the only rational way to decide whether to use such a treatment is to assume that each patient is roughly the same and has the same chance of benefit and harm as all other patients.

If only 5 percent of patients benefit from a certain treatment, and we don’t know who those patients are upfront, then we have to assume that any given patient receiving that treatment stands a 5 percent chance of benefiting. And then we have to decide, as a society, whether that 5 percent chance of benefit is worth the costs – both medical and financial – of that treatment.

It would be unwise to use CER to lump together the unlumpable: the long-term survivors from those destined to die soon regardless of treatment. But rather than dismiss CER for treating everyone as if they are average, we should fund the kind of research that will identify who stands to benefit the most from the health care available to them.

View the original post at The Hastings Center.

Last summer, New York City made a great stride toward promoting public health, by requiring chain restaurants to prominently publish calorie counts alongside their menus. This type of regulation holds the promise of improving people’s eating habits, without restricting their freedom to order whatever they want.

Theoretically, this new regulation should help consumers make better choices: they should eat fewer big Macs and more Asian chicken salads. Indeed, proponents of free markets, who normally oppose government regulation, should celebrate New York City’s new policy, because, by requiring restaurants to inform consumers about their purchases, the city has moved the restaurant business closer to Adam Smith’s ideal of a free market-one where savvy and educated consumers choose among available goods based on their cost and benefits.

As a physician who conducts research in behavioral economics, however, I am concerned that this policy won’t accomplish its goals, because it should be simple for restaurants to make their offerings attractive to even the most calorie conscious consumer.

How will they do this? By creating new items on the menu that make everything else look healthy by comparison.

When people evaluate consumer goods, they usually need some context in which to judge relevant attributes of competing products. What counts as an expensive DVD player? Best way for me to tell is by looking at other DVD players. And what counts as a low-calorie meal? Easiest way to tell is to see how many calories are in other meals.

If I was a restaurant owner and wanted to keep selling a popular high calorie sandwich to New Yorkers, I would place two new items on my menu, each with 50% more calories than the old sandwich. Maybe add on a couple slices of bacon, or a fried egg . . . anything Homer Simpson would like on his sandwich.

I expect that very few customers would thrill at the idea of these new “heart attacks on a bun.” Most will recoil. But that’s ok, because my goal would not be to attract customers to these new sandwiches. Instead I would use these new sandwiches to make my old ones look better. You see, my customer’s eyes will soon wander toward other items on the menu, and what used to be the highest calorie sandwiches will now look like veritable health-food snacks!

I have no idea whether any restaurants will employ this psychological technique. I do know that companies often make high-priced products, deluxe car models for example, in large part to sell their midrange products.

More importantly, my example highlights the kind of unconscious behaviors that could reduce the impact of New York City’s new regulations.

I hope that I am wrong, and that restaurant goers begin eating more healthfully in response to the calorie information now available to them. But if they don’t, I expect New York City will need to go further, to persuade people to eat better food.

Helping consumers make good choices often means we need to do more than simply inform them.

To read my other blogs, and to learn about my book Free Market Madness: Why Human Nature is at Odds with Economics-and Why it Matters , check out my website at: http://www.peterubel.com/.

View original post and comments at Scientocracy

A recent New York Times headline proclaimed that: “In Pain and Joy Of Envy, the Brain May Play a Role.”

May play a role?! Where else does The New York Times think envy resides? In our hateful hearts? Our covetous colons? Our jealous jejunums?

That The New York Times could doubt the centrality of the brain in human emotions shows just how far we behavioral scientists need to come to get people to understand what we do. How can we expect funders like the NIH and the NSF to invest in behavioral science when even The New York Times is unclear about whether feelings like envy reside in the brain?

This is all Descartes’ fault, of course. He persuaded modern thinkers that the mind is separate from the brain. (Although he did think that the pineal gland could potentially be the seat of the soul, if I remember my college philosophy correctly.)

Fortunately, new technologies like fMRI are slowly overcoming Descartes’ outsized influence. Ask someone to think envious thoughts, and the scanner shows which part of the brain is working. (The feeling of envy, it turns out, resides within prominent pain centers.)

To behavioral scientists, the importance of fMRI research is to show where in the brain specific emotions, thoughts and behavioral pathways reside.

To lay people, the importance is to show that such things reside…anywhere in the brain.

A colleague of mine, a behavioral scientist at the University of Michigan, recently presented the results of our Center’s research to a bunch of NIH muckety-mucks, in hopes of persuading them to continue funding our kind of research. He concluded his talk with an fMRI study, and blew away the molecular biologists who made up the majority of the audience. One of these scientists eagerly sought him out after the talk to tell him that this was the first time he believed behavioral science research had any value.

To those of you who question the value of brain imaging research, I remind you-Descartes’ legacy has not been fully vanquished. For our research to influence policy and practice, we must build our “street cred” by reminding people that our thoughts and feelings really do reside in the brain.

To read more of my blogs, and to learn more about my new book, Free Market Madness, check out my personal website: http://www.peterubel.com

View original post and comments at Scientocracy

Hiking in Switzerland several years ago, I came across a trail that seemed to dead-end at a farmer’s gate. I looked around for a way to avoid the property, but there was none. Instead, the trail continued through the middle of the farm. I walked through the gate, side-stepping some livestock in the way (and side-stepping even more livestock manure!), until I exited the farm through another gate, back out to public property.

What a wonderfully un-American attitude towards property rights. And towards walking. The Swiss have created a culture of walking. I wonder if we can use some of the Obama stimulus money to begin transforming our culture in similar ways.

Compare my experience in Switzerland to the typical visit to the suburbs. No sidewalks on the street. No grocery stores or shops within walking distance. That doesn’t promote a culture of physical activity.

The desire to walk, or to exercise in any manner, is not just a function of individual choice. It is also a desire that is strongly influenced by one’s surroundings. A study in Salt Lake City recently showed that people who live in older neighborhoods are thinner than those who live in newer neighborhoods, a thinness partly attributable to their greater tendency to walk.

We Americans are unlikely to cede property rights to local fitness enthusiasts any time soon. We won’t be opening up our gates to walkers and bikers either.

But because of the Obama stimulus bill, many local governments are looking for shovel-ready construction projects. I hope that in doing so, they look for ways to design neighborhoods that promote physical activity.

The free market, left to its own devices, doesn’t necessarily consider what kind of neighborhoods promote our best interests. We are our neighborhoods. Our culture begins at home.

With intelligent regulations, such as thoughtful neighborhood zoning, we can influence our ability and willingness to engage in healthy activities like biking and walking. We owe it to ourselves to create healthy neighborhoods.

To read more of my blogs, and to learn more about my new book, Free Market Madness, check out my personal website: http://www.peterubel.com

View original post and comments at Huffington Post

Quick quiz: If there are 1,000 people in a village, and 10% of them have contracted a new, awful disease called acute hotchocolitis, how many people in the village are sick?

This is not a trick question; the answer is 100. An easy question for readers of Forbes. But ask the average American, and one in three will get this question wrong.

There are many reasons we are in our current economic crisis. For one, U.S. tax policies encouraged home ownership, even among people who weren’t in a good position, financially, to take on such responsibility. What’s more, credit rating agencies fell asleep at the wheel, lulled into complacency by the other business they hoped to conduct with the very lenders they were rating.

The free market is often good at punishing bad decisions. In a free market, if you cannot afford your mortgage payments, you either have to sell your house, go into foreclosure or file for personal bankruptcy. If you quit your day job to become an actor, the marketplace will decide whether you can afford to continue chasing that dream.

But no account of the economic crisis is complete until we explore the reasons why so many consumers make so many bad decisions.

If a potential homeowner doesn’t understand things like percentages, how can we expect them to understand adjustable rate mortgages? “The mortgage starts at 5% (five what?), could rise to 7% in three years (seven what?), and if you compound (com huh?) the interest over time …”

Unfortunately, when enough people make enough bad decisions, the consequences can be dire–not just for those individuals who make the bad decisions, but for all of us.

Look at how irresponsible borrowing and lending have hurt even those among us who made wiser decisions. Caveat emptor policies–in which the buyer takes on the entire onus of a bad transaction–ignore the possibility that, if enough consumers make enough bad decisions, our economy will spin out of control.

Of course, mathematical stumblings don’t account for every unwise mortgage purchase. Instead, some consumers understood the terms of their mortgages, recognized that the mortgages were risky and still went ahead and secured the loans.

These people were susceptible to what behavioral scientists like me call unrealistic optimism: They were convinced that their interest rates would not rise; or they were confident that their salaries would rise faster than their mortgage payments; or they were certain that their house would grow in value, allowing them to sell it for a profit if their monthly payments became burdensome.

Good economic policies need to recognize that we aren’t always rational decision makers with unlimited willpower.

Instead, our decisions are influenced by a horde of unconscious forces. People named Paul, for example, are more likely to migrate to St. Paul, Minn., than other people, under the influence of what psychologists call egoistic bias. (I’m not calling that a bad decision, by the way. I grew up in St. Paul.) Or, to take a very different example: When people are told a cracker contains nine grams of “healthy fat,” they say it tastes worse than when the they are told the same cracker contains nine grams of “unhealthy fat.”

For these reasons, markets work best when policies direct consumers away from their own worst instincts.

That’s why we tax cigarettes, discouraging adults from picking up the habit. Such a policy leaves people free to smoke if they desire, while reducing the chance they will smoke in the first place.

Politically speaking, I am a flaming moderate. I am glad to be living in a capitalist society. But I also believe that when we understand the limits of human nature, we will better know whether, and how, to rein in the excesses of free markets. I hope that we not only recover from our current crisis quickly, but also that, in the meantime, we implement the kind of sensible regulations that will reduce the chance of repeating our recent mistakes.

View original post and comments at Forbes.com

Just a couple months ago, the nation watched as congress decided not to bailout American automakers, unconvinced that the three companies had sound plans for how to use such funds. Eager not to see any of these companies fail on his watch, President Bush came up with enough funds to tide the companies over for a little while.

Now it is up to the Obama administration to figure out how it will help the ailing domestic auto industry. And it will soon face the same two options that congress contemplated in December: bailout or bankruptcy. Bankruptcy, we are told by the car execs, “is not an option,” because of its debilitating stigma: people just won’t buy cars from companies in bankruptcy. Therefore, it’s bailout or nothing.

This dichotomous choice-of bailout or bankruptcy–will likely rear its head again unless Obama considers a third alternative, one that draws upon the strengths of the bankruptcy process while minimizing its potential stigma, an approach that takes advantage of the insights of behavioral economics, a field that is known to influence Obama’s thinking.

We need to psychologically rebrand “bankruptcy” to prevent it from stigmatizing the big three American car companies.

Some may think that when Detroit automakers warn of the hazards of bankruptcy, they are just posturing to extort federal funds. But let’s assume they’re right - that cars are different and present special problems for bankruptcy. It’s certainly plausible: customers might be willing to buy tickets from an airline in bankruptcy because they know their tickets will be honored and that in any event in at most a few months, their flight will be over and they’ll be back home.

They may not be so sanguine about buying a car. An automobile costs thousands of dollars and requires long-term relationships on warranty and service contracts. There may also be psychology at play, whereby the stigma of bankruptcy contaminates the unique emotional relationship many consumers have with their vehicles.

This brings us to framing. Behavioral science has established that people’s perceptions are powerfully influenced by the way issues are framed. Words like “bankruptcy,” and “bailout,” elicit powerful emotions, causing people to make rapid and intuitive judgments. Given the strength of these emotions, people can know that bankruptcy will strengthen an automobile company while still feeling like the company is thereby doomed. They can know that their Chevy is the same car it has always been while feeling like it has been diminished.

So can we give Detroit the benefit of bankruptcy protection without the stigma?

Of course we can. The Obama administration could work with Congress to create specific legislation for Detroit, drawing upon the most helpful and relevant aspects of bankruptcy law while making sure not to characterize the legislation as a “bankruptcy” bill. Call it, say, “Operation Solvency.”

Under this legislation, the automobile companies would use the holdout-binding power of bankruptcy law to compel all stakeholders to take concessions to restructure the balance sheets, as well as give the companies some breathing time to roll out new, more viable business plans, such as brand reduction. (This is something that can’t be done with mere bailout funds, because there’s always the specter of holdout.)

In fact, we’ve done this before. When Congress was worried about the stigma of personal bankruptcy, they styled what is now chapter 13 of the Bankruptcy Code, which they reframed as a “wage earner plan.” It could do the same thing with Detroit.

This is not just bait and switch; this is recognition of the insight of behavioral science that framing matters. If the stigmatizing effects of bankruptcy for automobile consumers is real (even if they are exaggerated in congressional hearings), then we should be mindful of their consequences when billions of taxpaying dollars are at stake - not to mention hundreds of thousands of jobs.

If we’re going to craft legislative intervention, let’s at least frame the matter right. Then, and only then, can Detroit can get to work on making itself relevant again in the global automobile industry.

Note: I co-authored this post with John A. E. Pottow, a Professor of Law at the University of Michigan and co-publisher of www.creditslips.org, the leading academic blog on bankruptcy.

To see my posts from other sites, or to learn about my book Free Market Madness: Why Economics is at Odds with Human Nature-and Why it Matters, go to http://www.peterubel.com/.

View original post and comments at Scientocracy

The key to good policymaking is to understand human nature.

Want to increase how much money people save? You better know what they will do if you change the tax code. Want to reduce the threat of terrorism? All the security in the world won’t suffice if you don’t, at the same time, find ways to confront the behavioral forces that lead people to commit acts of terror. Want to make health care affordable to all? Policy won’t achieve this goal unless policymakers understand the ways doctors and patients make decisions about what healthcare services to use.

In my new blog — Scientocracy — I plan to explore important policy debates through the lens of human behavior. I intend to not only show why psychological science is relevant to a whole range of policy debates, but to also imagine what policies might look like if they were better aligned with human nature.

Who am I to write such a blog?

I am a physician at the University of Michigan, with undergraduate training in philosophy, and without a single psychology course to my credit. Not promising, I know. But actually, after sitting in on a behavioral economics class at Carnegie Mellon University 15 years ago, I have spent the majority of my professional career studying how people make health care decisions — how patients choose between, say, chemotherapy and radiation; how surgeons decide whether a patient is a good candidate for liver transplants; and how policymakers decide whether a new drug brings enough health benefits to justify its staggering price.

Through my research, I have learned a lot about the irrational and unconscious forces that drive people’s decisions. And I have seen what can happen when leaders implement policies that ignore these forces.

The one constant in my professional career, besides practicing medicine, has been my focus on decision-making and policy. For example, my first book, Pricing Life, was published as part of a series on bioethics, but the book deals as much with moral psychology as it does with philosophy.

And my newly released book, Free-Market Madness: Why Human Nature Is at Odds with Economics — and Why It Matters, is a critique of libertarian extremists who believe that most of society’s problems (obesity, crime, drug use…) can be solved by deregulation. I show why such free-market evangelism is at odds with human nature, and why psychologically informed policies — ones that recognize both the rational and irrational side of human nature — would rein in the excesses of free markets to account for human imperfection.

When I talk about Scientocracy, then, I’m not talking about a world ruled by behavioral scientists, or any other kind of scientists. Instead, I am imagining a government of the people, but informed by scientists. A world where people don’t argue endlessly about whether educational vouchers will improve schools, whether gun control will reduce crime, or whether health savings accounts can lower health care expenditures,… but one instead where science has a chance to show us whether vouchers, gun control laws, and health savings accounts work and, if so, under what conditions.

As a new President assumes leadership in the United States, I hope to add to the chorus of voices calling for government policies that are informed by a solid scientific understanding of human nature, in all its wonderful messiness.

To learn more about me or my new book, Free Market Madness, check out my website: http://www.peterubel.com/ .

View original post and comments at Scientocracy

“With luck, Ted Kennedy will be dead soon.”

She uttered these words two minutes after expressing hope that the nation would rally behind Obama. A lifelong Republican, she had voted for McCain. I expect she harbored concerned about Obama’s terrorist pals and his anti-American pastor. But with Obama now newly elected as president, she was already beginning to forget what she used to find so terrifying about him. As an American, and as someone who worried about the stiff challenges facing our country, she had no choice but to wish him well. To hope for Obama to fail would, after all, be to hope for America to fail.

But Ted Kennedy — that was a whole other matter. Out of nowhere, in what had otherwise been a pleasant conversation, she brought up his name. “Did you know,” she asked, “that he never graduated from law school?” I didn’t actually. “Did you know how wild he was when he first became a senator?” she asked. I had heard a bit about that, but wasn’t that, like, 40 years ago? “I hope he dies soon. I really do,” she said.

I was dumbfounded. Home for the holidays, I had known that I would be surrounded by ardent Republicans from both sides of the family. My children, you see, have four Republican grandparents and a slew of Republican aunts and uncles. Politically speaking, I think of myself as a flaming moderate, but both sides of my family think of me as a pinko — for not supporting our initial invasion of Iraq; for questioning the wonders of the free market (horror of horrors: I even have a book out now called Free Market Madness!)

But while I expected to hear people complain about how liberals are ruining America, I did not expect to hear anyone call for the death of an ailing senator. This sentiment was so raw, so primal, it flabbergasted me. What had Ted Kennedy done lately to deserve such vitriol? Had his passionate pursuit of universal health care earned him such enmity?

No. None of the complaints she uttered concerned any recent aspect of Kennedy’s life. (I’m leaving her identity unnamed, but I want to clarify that the person I’m writing about was neither an aunt nor grandmother of my children.) In her 70s, she was clearly stuck in the 60s.

I’ve drawn a lesson from this conversation, about the challenges Obama will face trying to bring our country together. The 60’s may have happened forty years ago, but the cultural battles begun back then have not completely run their course. Many elderly conservatives still hate democrats with great passion. And though they find it hard to direct that hatred toward Obama, they have plenty of other people to direct their hatred towards.

And direct this hatred they will! Psychologists have long known that when people’s world views are threatened, they grasp for ways to affirm their beliefs. A recent study published in the prestigious journal Psychological Science reveals the strange depths to which we humans will plunge to affirm our beliefs.

In stage one of the study, a research assistant asked participants to fill out a questionnaire. The research assistant was a moderately attractive blonde haired young woman in a scarf. I mention this not because I’m sexist, but because her physical appearance is important for the study. You see, the research assistant headed off to the file cabinet to get a copy of the survey, and in doing so, switched places with another moderately attractive blonde haired young woman wearing an identical sweater and scarf. The two research assistants shared moderate similarities in their appearance, but anybody looking at the two of them at the same time could easily tell them apart.

However, the research participants weren’t looking at the two at the same time and comparing them. They were in a situation where they expected that they were interacting with a single research assistant. And when the second research assistant came back with a copy of the survey, most of them didn’t realize that this was a different person. Instead, something felt wrong about the situation. Their world view had been challenged. They assumed they were doing a simple survey in a comfortable setting, but instead found themselves feeling acutely uncomfortable for reasons they couldn’t quite grasp.

That’s when stage two of the study takes place. In this stage, the participants filled out the survey, which presented them with a hypothetical report about the arrest of a prostitute. Participants were asked to play the role of a judge and determine proper bail for this woman.

The research participants — still feeling all these negative emotions, still knowing that something in their view of the world wasn’t fitting together correctly — slapped a huge bail on the hypothetical prostitute, a dollar amount significantly greater than the value chosen by a control group who had not experienced the surreptitious switching of their research coordinator’s identity.

When people’s world views are threatened, they look for ways to confirm other parts of their world view, often with vigor. When they cannot detest Obama, therefore, they revisit the sins of Ted Kennedy’s youth with righteous vengeance.

Many Republicans are feeling quite threatened right now. The validity of their world view has been questioned, by events and also by the majority of American voters. We can all hope that Obama will be able to unite people across this partisan divide. But we should be prepared for many ardent Republicans to respond to these threats by looking for fresh targets.

There are many reasons we can hope that Ted Kennedy will overcome his brain tumor and live a long time. But now there is a new reason to hope for this — the longer he lives, the more he can soak up Republican ire, and reduce the chance that Republicans will redirect their negative emotions toward our new president.

For more information on my book, Free Market Madness, check out my website at http://www.peterubel.com/.

View original post and comments at Huffington Post

Not long before the presidential election, the Wall Street Journal editorial page warned its readers about what it called the attack of the killer Oreos. You have to admit it’s a pretty sensational image — of an Oreo silently stalking its prey, leaping upon an unsuspecting consumer. In fact, this is exactly the kind of image Journal editorialists wanted people to think about when voting in November. “One of the things at stake in this election,” the Journal reminded us, “is who will run agencies like the FCC, which have enormous discretionary power.” And an Obama administration, we were warned, will interfere with companies’ abilities to market their products to us, and our children.

If the current economic crisis has taught us anything, it is that unfettered markets are not the godsend that libertarians would have us believe. Our current economic mess is due, in no small part, to deregulation gone wild.

It is no surprise that the Wall Street Journal opposes the idea of regulating advertisement of junk food to kids. So even as companies find more ways to saturate our brains with images of their products — paying TV shows to incorporate their products into plot lines for example — free market evangelists remain unconcerned. As our children become increasingly obese with each passing year, these people can’t understand why some of us would like to protect our children from things like junk food advertising.

Behind the Journal’s view is a belief that humans are immune to any negative consequences of advertising:

Viewers already understand exactly what’s going on when a TV character flaunts a name brand,” they opined, “and that awareness is the best defense against whatever ‘manipulation’ is going on.”

In making this statement, Journal editorialists are flaunting their ignorance of human nature. As a physician, I have spent my clinical time caring for patients — smokers, overeaters, under-exercisers — who have been harmed by many of the products that these kind of libertarians would want us to free from regulation. As a behavioral scientist, I have studied how easy it can be to unconsciously influence people’s behavior. As the father of 8 and 10 year-old boys, I have yearned for a government that is willing to step in, when necessary, to protect my kids from the harmfulness of our excessive consumerism.

We live in a market-oriented economy. But a sensible society will recognize when the market needs to be reigned in.

Peter Ubel is Professor of Medicine at the University of Michigan and author of Free Market Madness: Why Economics is at Odds with Human Nature–and Why it Matters (Harvard Business Press, January 2009). To learn more, visit http://www.peterubel.com/

View original post and comments at Huffington Post

Paying Doctors Less Is the Key to Better Coverage

Conservatives propose to control healthcare costs by bringing the discipline of the free market to bear upon the healthcare system. Some progressive groups advocate controlling costs with a more interventionist plan. But neither approach, as far as I have seen, adequately confronts one of the biggest barriers to controlling healthcare costs—the strong psychological desire physicians like me have to maintain our often phenomenally high incomes.

To help you understand this psychological phenomenon, I want you to imagine that you have ten years left in your career, and can choose between the following two income streams over those ten years: In the rising salary stream, you would start at salary X, and then receive a steady raise in your salary over the next ten years till you finish at salary X+Y. In the falling salary stream, you’d start right now at an salary of X+Y, and your salary would steadily decline across the ten years to end at salary X. Both choices would leave you with the exact same amount of salary over these ten years, only differing on whether your salary grows over time or declines.

What would you choose? (more…)