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Implicit Healthcare Nudges

Daily Remedy by Daily Remedy
August 8, 2021
in Contrarian
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Online medical consultation and support. Online doctor. Vector illustration

Online medical consultation and support. Online doctor. Vector illustration

“Young man, I invented the modern age”, Henry Ford chided when asked by a child about his continuing relevancy in the business world late into his professional career. Ford’s derisive remark was characteristically Ford, whose pugnacious disposition powered his persistence into a stratosphere of success the likes of which we have hardly ever seen.

A persistence necessary to endure two colossal business failures – the first resulting in bankruptcy, the second eventually becoming competitor GM’s Cadillac – before forming a company that would go on to define American ingenuity and entrepreneurship, Ford Motor Company. Ingenuity, however, is largely defined after the fact, and often from the outsider looking in – giving it a magical appearance, but like magic, it disappears as quickly as it appears.

And what were initially attributes of a successful entrepreneur – enterprise and boldness – soon became attributes of an outdated executive – arrogance and obstinance – as Ford began to clash with others in the company over misguided policy decisions.

One of which was Ford’s decision to promote former WWII Air Force veteran and future two-term Secretary of Defense, Robert McNamara, to lead an initiative encouraging car drivers to wear seat belts in the 1950’s.

Ford and McNamara insisted on a paternalistic approach to encourage drivers, despite overwhelming opposition, and the lingering effects of that approach still persist today – only contrary to its original intent – as drivers of all ages in nearly every part of the country routinely refuse to wear their seat belts, and often do so only begrudgingly. Such a simple, harmless task, yet one met with such nagging resistance, which many believed began from the misguided approach of this initiative, decades before.

What the two tried to do before is what behavioral economist Richard Thaler today calls nudging, or an act intended to encourage or guide a specific behavior. Only what Ford and McNamara thought was a nudge was actually a nuisance, as they incorrectly interpreted how their efforts would galvanize the public – attempting to promote one behavior but really just encouraging the opposite behavior.

We see nudges and nuisances throughout healthcare, and just as commonly, we see nuisances passing as nudges, and vice versa.

University of Michigan Health System introduced a policy a few decades ago of apologizing whenever a medical error happened, and soon noticed a reduction in the number of, and overall size of, malpractice lawsuits. The one action, a nudge prompting an apology after a mistake, an old fashion, “I’m sorry”, reduced the likelihood of prolonged legal consequences. A simple action, with set of ramifications.

Nudges structure a specific behavior to produce an intended effect, but also produce a host of secondary effects as reactions to the initial nudge. When those secondary effects are opposite to the initial, intended effect, we develop conflicting interpretations, giving rise to unintended behaviors.

Therefore, when structuring nudges specific to healthcare, we should focus on observing the various layers of interpretations that go into patient behavior, and study the relationship among the various interpretations. Effectively constructed nudges properly align the various interpretations. And the various interpretations, when properly aligned, effectively produce the desired behavior.

A complex behavior elicited from a well-designed nudge.

Complexity does not follow simple cause and effect – there is no “logical path” in the words of Einstein – instead we find different, apparently unrelated factors influence healthcare behavior in unpredictable ways that change based on the changing interpretations.

Which is just an elaborate way of saying how we choose to think about a particular behavior impacts the willingness to adhere to that behavior.

And why intuition plays an immensely important, though largely unforeseen role in healthcare. Intuition is the cumulative sum of our interpretations, extracted from past experiences and current observations. It determines our initial impressions, our predilections, and our tendencies – our frame of reference – all of which comprise our healthcare decision-making.

Nudges should adjust our frame of reference, and incentivize good behavior – all the thoughts that go into a complex, subjective behavior while prompting that behavior to the top of mind – structuring an understanding as much as an action – reallocating focus as much as guiding behavior.

These types of nudges work for the very reason traditional nudges do not – good healthcare behavior is a result of behavior that we are aware of and not aware of, while traditional nudges address only the most overt behavior, not accounting for the associated, secondary behaviors that form in response. And by better understanding patient behavior – implicitly and explicitly – we avoid unintended consequences that may arise.

Instead of crafting a nudge that states, “did you avoid foods in high saturated fats today?”, you should craft the nudge to ask for the patient’s thoughts relative to the act of avoiding high saturated fat foods: “how much effort did you require to avoid high saturated fat foods today?” – a nudge which questions the efforts per action, or the mental exertion needed to avoid or attempt to resist a clinically harmful decision.

Structuring the nudge as a balance of thought to action contextualizes the nudge to elicit awareness of the action and the thoughts that lead up to the action. It implicitly assumes the patient is aware that such foods are bad for his or her health and contextualizes the question in reference to how that awareness affects the patient’s decision-making. In effect, eliciting the implicit thoughts that go into eating foods we know we are not supposed to eat – helping us understand in the moment why we should prioritize long term health instead of short-term gratification.

A truly effective nudge.

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Daily Remedy

Dr. Jay K Joshi serves as the editor-in-chief of Daily Remedy. He is a serial entrepreneur and sought after thought-leader for matters related to healthcare innovation and medical jurisprudence. He has published articles on a variety of healthcare topics in both peer-reviewed journals and trade publications. His legal writings include amicus curiae briefs prepared for prominent federal healthcare cases.

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Most employers are unknowingly steering their health plans toward higher costs and reduced control — until they understand how fiduciary missteps and anti-competitive contracts bleed their budgets dry. Katie Talento, a recognized health policy leader, reveals how shifting the network paradigm can save millions by emphasizing independent providers, direct contracting, and innovative tiering models.

Grounded in real-world case studies like Harris Rosen’s community-driven initiative, this episode dives deep into practical strategies to realign incentives—focusing on primary care, specialty care, and transparent vendor relationships. You'll discover how traditional carrier networks are often Trojan horses, locking employers into costly, opaque arrangements that undermine fiduciary duties. Katie breaks down simple yet powerful reforms: owning your data, eliminating conflicts of interest, and outlawing anti-competitive contract clauses.

We explore how a post-network framework—where patients are free to choose providers without restrictive network barriers—can massively reduce costs and improve health outcomes. You'll learn why independent, locally owned providers are vital to rebuilding trust, reducing unnecessary procedures, and reinvesting savings into the community. This conversation offers clarity on the unseen legal landmines employers face and actionable ways to craft health plans built on transparency, independence, and aligned incentives.

Perfect for HR pros, benefits advisors, physicians, and employer leaders committed to transforming healthcare from the ground up. If you’re tired of broken healthcare models draining your budget and frustrating your staff, this episode will empower you to take control by understanding and reshaping the very foundations of employer-sponsored health. Discover the blueprint for smarter, fairer, and more sustainable benefits.

Visit katytalento.com or allbetter.health to connect directly and explore how these innovations can work for your organization. Your path toward a healthier, more cost-effective future starts here.

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00:00 Introduction to Employer-Sponsored Health Plans
02:50 Understanding ERISA and Fiduciary Responsibilities
06:08 The Misalignment of Clinical and Financial Interests
08:54 Enforcement and Legal Implications for Employers
11:49 Redefining Networks: The Post-Network Framework
25:34 Navigating Healthcare Contracts and Cash Payments
27:31 Understanding Employer Health Plan Structures
28:04 The Role of Benefits Advisors in Health Plans
30:45 Governance and Data Ownership in Health Plans
37:05 Case Study: The Rosen Hotels' Health Model
41:33 Incentivizing Healthy Choices in Healthcare
47:22 Empowering Primary Care and Independent Providers
The Hidden Costs Employers Don’t See in Traditional Health Plans
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