Introducing nudging in the law

Nudge and the Law. A European Perspective

Alberto Alemanno is an HEC law professor focused on issues on behavioral policies and regulation. Now he has edited an interesting book. You can check it from this index:

1. The Emergence of Behavioural Policy-Making:A European Perspective

Part I: Integrating Behavioural Sciences into EU Law-Making
2. Behavioural Sciences in Practice: Lessons for EU Rulemakers
3. Nudging and Evidence-Based Policy in Europe: Problems of Normative Legitimacy and Effectiveness
4 . Judge the Nudge: In Search of the Legal Limits of Paternalistic Nudging in the EU

Part II: De-Biasing Through EU Law and Beyond
5. Can Experts be Trusted and what can be done about it? Insights from the Biases and Heuristics Literature
6. Overcoming Illusions of Control: How to Nudge and Teach Regulatory Humility

Part III: The Impact of Behavioural Sciences on EU Policies
7. Behavioural Sciences and EU Data Protection Law: Challenges and Opportunities
8. Behavioural Sciences and the Regulation of Privacy on the Internet
9. EU Consumer Protection and Behavioural Sciences:Revolution or Reform?
10. What can EU Health Law Learn from Behavioural Sciences? The Case of EU Lifestyle Regulation
11. Conduct of Business Rules in EU Financial Services Regulation: Behavioural Rules Devoid of Behavioural Analysis?

Part IV: Problems with Behaviourally Informed Regulation
12 . Making Sense of Nudge-Scepticism: Three Challenges to EU Law ’ s Learning from Behavioural Sciences
13. Behavioural Trade-Offs: Beyond the Land of Nudges Spans the World of Law and Psychology
14. Epilogue: The Legitimacy and Practicability of EU Behavioural Policy-Making

The book deserves time reading it, specially if you are interested in latest trends on nudging and regulation. However, if you don't have enough time, go straight to chapter 10. This is what you should read about implications of nudging on Public Health. He says,

Our previous analysis made a case for more experimentation in behaviourally informed regulation in the EU lifestyle policy. This seems particularly true when examined in light of the limited results attained by self-regulatory schemes led by the food, alcohol, and tobacco industries. While the evidence of what works in terms of behaviour change strategies is limited and too often anecdotal, several success factors have progressively been identified in policy-making.

 These success factors are those we have to check in our close environment and test wether it is worth taking this regulatory approach.

Income and health over lifetime

Redistribution from a Lifetime Perspective

An IFS paper says:

Most analysis of the effects of the tax and benefit system is based on snapshot information about a single cross-section of people. Such an approach gives only a partial picture because it cannot account for the fact that circumstances change over life. This paper investigates how our impression of redistribution undertaken by the tax and benefit system changes when viewed from a lifetime perspective.

We find that much of what the tax and benefit system achieves is effectively to redistribute across periods of life and, as a result, it is much less effective at reducing lifetime inequality than inequality at a snapshot.

If distribution of income over lifetimes matters as much as among individuals,  at least in UK, then we have to review certain common place views. I've said that before in this post. Now, Martin Wolf highlights the role of welfare state as a "piggy bank", not only redistributing among people, it reallocates resources among lifetime. "Income is far les unequal over lifetimes than in any given year". Health and education are contributing mostly with benefits when we are old and young respectively.
Unfortunately in our country there is a long way to go, to confirm such intuition.

Phillips Collection in Barcelona

Obamacare, a book and a documentary

Inside National Health Reform (California/Milbank Books on Health and the Public)

If you want to know the details about how Obamacare was created, the most remarkable book was written by John McDonough five years ago. Today I would like to highlight these statements about the origins:

We decided to focus the first meeting on coverage for all Americans. We conceptualized three avenues we could travel in search of consensus:
• The first we called Constitution Avenue, meaning a radical, systemic shift away from the current system, in which mostAmericans get insurance through their jobs. It could be achieved with a  government-run Canadian-style “single payer” system replacing private insurance with public coverage, sometimes called “Medicare for All.” Or it could be done through the private sector, through the Healthy Americans Act, the scheme devised by Senator Ron Wyden (D-OR), which replaced employer coverage and Medicaid with an individual choice of private plans. Either way, employer-based coverage was eliminated.
• The second we called Independence Avenue, meaning an incremental “go slow” approach to minimize conflict. The federal government could support state high-risk pools to cover those with preexisting conditions, subsidize uninsured lower-income folks, expand Medicaid a bit, and implement limited insurance market reforms. Though it did not come close to universal or even a major expansion, and though it would disappoint and anger many on the Democratic and progressive side because it would fall far short of their expectations, it might get done quickly as a bipartisan measure.
• The third we called Massachusetts Avenue, meaning reform based on the key elements of the near-universal coverage law enacted in Massachusetts in 2006. Those elements include deep and systemic health insurance market reform, a mandate on individuals to purchase insurance, subsidies to make insurance affordable, and an insurance “exchange” to connect people easily with coverage.
After ninety minutes of talking, we wanted them to choose. We would not let them leave without getting a sense of their preferences. “How many want to go down Constitution Avenue?” I asked. Zero hands were raised. “OK, how many want to take Independence Avenue?” Zero hands. “All right, how many want to travel down Massachusetts Avenue?” Of the twenty or so in the room, fifteen hands went up. Impressive, I thought. I noticed the five unraised hands all belonged to business representatives:those from the Business Roundtable, the National Federation of Independent Businesses, the U.S. Chamber of Commerce, the American Benefits Council, and the National Retail Federation. “What’s up?” I asked.“Couldn’t we have a Wisconsin Avenue?” asked Paul Dennett from the American Benefits Council, a large corporate-benefits coalition.“Sure,” I said. “Wisconsin, Pennsylvania, Rhode Island, whatever. You five folks get together, work out what your Wisconsin Avenue looks like, bring it back. Let’s compare it with Massachusetts Avenue, and if that’s where people want to go, that’s what we’ll do.” They came back the following week but had no alternative avenue to propose.

It helps to understand the begining, not the current situation. These statements are in chapter 2, you should follow the whole book to get a clear undestanding. Highly recommended.

And the BBC has recently released a documentary, unfortunately I can't watch it from my location.

Fiduciary duty in medicine

Professionalism, Fiduciary Duty, and Health-Related Business Leadership

Professionalism is a key concept to understand the practice of medicine. I have emphasized many times this issue in this blog. Today I would like to take one step further and to define the fiduciary duty of all healthcare professionals, specially those at management positions. In JAMA you'll find an article that elaborates the idea:

Fiduciary duty captures the simple idea of an obligation to act in the best interest of another person or party. The fiduciary is entrusted with the care of another person and must ensure that the person’s interests take precedence over the fiduciary’s own interests. Fiduciary duty is familiar to physicians in their relationship to patients, but in business, executives have a fiduciary duty to “the shareholders and the corporation.” A fiduciary relationship contrasts with a contractual one (in which mutual obligations are largely spelled out), and it imposes more extensive expectations of leaders. Fiduciaries are held to a higher standard precisely because of their power to affect the well-being of others who rely on their judgment and cannot adequately monitor and assess the fiduciary’s actions.

PS. Fiduciary duty concept is better developed under common law rather than civil law. Therefore, we need to rethink its implications.

Toni Catany, Photo-Exhibition in Barcelona

Rational emotions

Feeling smart

Game theory is a crucial contribution to science. However it is not that easy to get a clear understanding unless experiments that confirm hypothetical outcomes are well described. And experiments are context dependent.
If you want a good overview of the main insights of Game Theory, have a look at this book "Feeling Smart, why our emotions are more rational than you think" by Eyan Winter. It goes beyond game theory, this is the most fortunate part.You don't need maths to understand it. Mostly it is devoted to applications in a useful way, using behavioral and information views .
Let's take a statement on trust:

Trust is an engine of cooperation between individuals. Cooperation, in turn, is an engine of economic growth and social welfare. Trust cannot be sustained in a society without credibility, the behavioral trait that fosters trust. On the other hand, just as trust cannot survive for long without credibility, credibility is eventually destroyed without trust. If trust is virtually nonexistent in a social setting, then there is no point in trying to develop or sustain credibility; in that situation you are better off adopting selfish and unreliable behavior. Societies and nations can be in one of two equilibria: a “good” equilibrium in which individuals trust each other and behave in a reliable and cooperative manner toward others (justifying the trust), or a “bad” equilibrium in which individuals do not trust each other, with that lack of trust becoming self-justifying as people act without any sense of a need to be trustworthy or reliable. It is easy to guess, even without empirical data, which of these equilibria leads to greater economic growth.

If you are interested in trust games, then go to part II, "On trust and generosity", this is what you should read. I highly recommend it, I've enjoyed reading it.

 

PS. I have a vague feeling these days about what's going on health policy in my country. May be credibility is starting to be undermined? Any health model relies on the credibility and trust of different actors. It is not possible to build a health system without trust among all stakeholders. Instead of creating the conditions for a new health policy based on cooperation, may be the new foundations are departing from conflict?. Is this the way to create a successful health policy?

The building blocks of healthcare payment systems

The Building Blocks of Successful Payment Reform: Designing Payment Systems that Support Higher–Value Health Care

The implementation of healthcare payment systems is a complex task for any insurer, either public or private. Any option for reform is path-dependant and uncertain. The context and the inertia are the sources of lack of support for a change, unless a larger amount of Money -a big carrot- is put on the table.
A new report highlights the building blocks of a payment system. This is the instruction manual, and it refers to 4 issues:

Building Block 1: Services Covered by a Single Payment
Option 1–A: Adding new service–based fees or increasing existing fees.
Option 1–B: Creating a treatment–based bundled payment for a single provider
Option 1–C: Creating a multi–provider treatment–based bundle.
Option 1–D: Creating a condition–based payment.
Option 1–E: Creating a population–based payment.

Building Block 2: Mechanism for Controlling Utilization and Spending
Option 2–A: Adjustments in payment (pay for performance)based on utilization.
Option 2–B: Adjustments in payment (pay for performance)based on spending or savings.
Option 2–C: Bundled payment.

Building Block 3: Mechanism for Assuring Adequate Quality and Outcomes
Option 3–A: Establishing minimum performance standards.
Option 3–B: Payment adjustments (pay for performance) based on quality.
Option 3–C: Warrantied payment

Building Block 4: Mechanisms for Assuring Adequacy of Payment
Option 4–A: Risk adjustment or risk stratification.
Option 4–B: Outlier payments.
Option 4–C: Risk corridors.
Option 4–D: Volume–based adjustments to payment.
Option 4–E: Setting and periodically updating payment amounts to match costs.

A must read, keep it for your files.

 Halley meets Hortal, at Galeria Senda

 

PS. The revolving door of those that claim against revolving doors

Improving physician compensation

A Guide to Physician-Focused Alternative Payment Models

A fixed flat monthly payment to  physicians is a vulgar method to compensate a professional effort. At some initial stages of the career, it may work. As far as experience and knowledge improves results, than some adjustments are needed. In general the publicly funded health system is not able to change the initial stage and remains with more or less the same approach of low-powered incentives. This may work for some individuals, but not for all of them.
Paying on a fee-for service it creates strong incentives to boost volume, and paves the way to overdiagnosis and overtreatment. Privately funded health care is still using mostly this high-powered approach and it is also not able to reform.
Alternative methods of compensating physicians have been described recently in an interesting report. Forget for a while that it is based on the US health system. These are the seven options:

APM #1: Payment for a High-Value Service 
APM #2: Condition-Based Payment for a Physician’s Services

APM #3: Multi-Physician Bundled Payment

APM #4: Physician-Facility Procedure Bundle

APM #5: Warrantied Payment for Physician Services

APM #6: Episode Payment for a Procedure

APM #7: Condition-Based Payment

Food for thought. Something should done to go beyond fee-for service. And do not forget it, changing incentives without any organizational alignment or reform may drive to surprises and poor performance.

PS. Just the opposite to us, NHS expands private care . A controversial trend.