Linking Health Care to Behavior

By Smerd, Jeremy | Workforce Management, July 2, 2009 | Go to article overview

Linking Health Care to Behavior


Smerd, Jeremy, Workforce Management


5 Questions JAMES A. KLEIN, president, American Benefits Council

People often act in irrational but predictable ways. Scientists who study the way people make economic decisions call this behavioral economics, a field researchers are using to better design health care benefits in ways that more efficiently deploy health care resources while leading to employees who are healthier and more productive. James A. Klein, president of the American Benefits Council, a Washington-based group advocating for maintaining employer-sponsored health benefits, recently spoke about the intersection of behavioral economics and health care benefits at a symposium on the subject. He shared his thoughts on behavioral economics and health care reform with Workforce Management staff writer Jeremy Smerd.

Workforce Management: You just finished speaking at Ignite 09, a symposium on the convergence of behavioral economics and health care. What interests you in this field?

James A. Klein: Because it holds promise to save money and improve health, that makes it a top priority for the American Benefits Council.

WM: How does behavioral economics fit into health care and health care reform?

Klein: We've seen its features applied to retirement benefits [in the form of automatically enrolling people into 401 (k) plans]. The idea from a corporate benefits perspective is . . . understanding the full range of factors that go into how people make decisions about their health care services and helping them make good decisions that are not based on financial factors only.

WM; Does behavioral economics, because it recognizes that people often act irrationally and in ways that are at odds with their long-term health, reflect the limits of consumer-driven health care?

Klein: I think of this as one of the dimensions of consumerdriven health care. I don't limit the definition of consumerdriven health care to only financial decisions. I think of a broader umbrella of consumerism in which making financial decisions is one component. The other component is ... understanding what motivates people. I think that is at the heart of behavioral economics. When [decisions are] based only on financial incentives, that will motivate some people. …

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