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Tuesday / April 25.

When Psychology weds Economics: developing healthcare systems for the future

By Archit Jain

About 4.25% of people in Denmark are willing to donate their organs when they pass away. 17% of the British and 12% of Germans have similar proclivities. In other clusters of countries, statistics show variation. 99.91% of the French register to donate their organs while the figures for Hungary, Portugal and Austria are 99.97%, 99.64% and 99.98%, respectively.

Why do European economies have such a vast disparity in organ donation rates?

At first, this is perplexing. Why do relatively similar countries—all advanced European economies—have such vastly disparate organ donation rates? The answer, however, is quite simple. In countries with ‘opt-in’ options in the organ donation form, people choose not to tick it. In other countries such as France, Hungary, Portugal and Austria, organ donation forms have an ‘opt-out’ option which most people overlook. Hence, they are deemed to have given consent. In both cases, an overwhelming majority of people adopt the default option; an effect which psychologists call the ‘status quo bias’. But this does not mean that people don’t care about organ donation. In fact, it’s quite the opposite. People care deeply and emotionally about issues related to death and feel uncomfortable because of these thoughts. Hence, to avoid thinking about unpleasant things, they accept whatever option is provided to them as default.

However, the behavioural underpinnings of this phenomenon are secondary. Even if we believe that people are too lazy to tick a box (because it takes time and effort), the lesson for a policymaker does not change. If people opt for the default option to avoid making complex choices, changing the main option to what one prefers seems a suitable idea. This little nudge makes all the difference in organ donation statistics. While patients die in Denmark because they can’t get a kidney or a liver when they need one, an excess of organs are available in countries with high donation rates. This leads to a paucity of healthy organs for transplants and an imbalance in the number of organs used for transplants.

The effect of incentives on health care

Insights from psychology have been employed all over the world to improve health outcomes. As part of an effort to encourage Philippine’s citizens to quit cigarettes, smokers were offered special savings account with a six month lock-in period. They could choose to deposit any amount in this account. On passing a nicotine test, they were allowed to access their accounts, else their money would be donated to charity. Smokers with the special bank account were 30-50% more likely to pass the nicotine test. Even more encouraging is the fact that this effect continued to remain when a surprise nicotine test was administered 12 months later. This indicated a lasting tendency to quit smoking.

Back home, immunising people in rural India was always a major policy challenge. Conventional economic thinking held that the addition of clinics and an increase in the supply of vaccines would enhance the immunisation rate. Despite the heavy costs involved, this led to an abysmal 6% immunisation rate. Realising that incentives work wonders, behavioural economists suggested a somewhat bizarre idea to combat this problem. If families were provided with the lure of lentils and metal meal plates, they became overwhelmingly willing to get their children to the immunisation clinic. It worked! The immunisation rate rose to 39% – something, that merely making medicines available failed to achieve.

In quest of a solution

Despite breakthroughs in healthcare delivery systems, a large portion of the global population fails to take advantage of available opportunities. In India, more females are anaemic than not and a quarter of pregnant women never receive prenatal care. In fact, less than 1 hospital bed is available for every 1,000 people. The gaps in access often have a behavioural component. What we now need is a better knowledge of these behavioural biases that become barriers to the smooth delivery of medical care; to customise solutions for a lasting impact on public health.


(This is the final article in a five-part series that explores how psychological concepts and insights can be used for economic development)

Featured Image Source:  Zululand Observer