When Governor Phil Scott made his last minute Hail Mary pass to the legislature with a proposal to move local teachers’ insurance to the state level, his staff claimed that a statewide insurance contract would save $26 million that the state would use to reduce property taxes.
But that figure came out of calculations estimating that $75 million in savings would come from teachers seeking less expensive care.
That’s right. It was an estimate, based on hopeful assumptions. And that’s okay, politicians do that all the time. But what I found most interesting was a set of assumptions and cognitive biases present in this proposal from the start - biases that help explain a fundamental challenge in any approach to health care.
Most advocates of any health care plan usually begin with the belief that consumers are by definition wasteful spenders: buying unnecessary, lavish items when cheaper options would meet their needs just as well. But there’s really not much evidence that this is true. And especially in the health care marketplace, numerous economic studies show that applying a rational actor approach just doesn’t work.
Behavioral scientists know that we humans aren’t really all that rational to begin with. We make a lot of decisions based on emotions and ingrained beliefs. So to think that we’d all of a sudden act rationally when it comes to health care, especially when we actually have very little reliable information, is a somewhat irrational belief in its own right.
I’ve read that a state administrator once said that teachers with “booboos on their fingers” – his words, not mine - now run to expensive specialists but would use cheaper health care if they had to pay more.
We don’t know if that’s true or not. It could just be made up. But it sounds “real” to us, something we can imagine happening, so we tend to believe it even though there’s no evidence that it’s true.
In our semi-market driven health care industry, our costs far outpace those of countries with socialized medicine where people don’t pay directly for care at all. But the irritating thing about biases is that even when faced with provable facts, people don’t typically change their minds.
We think the debate is about health care, but it’s really about what we fundamentally believe about one another.