framing health care reform

The always-interesting James Surowiecki has a new piece in the New Yorker looking at the psychological biases that are hampering health care reform.

[T]he public’s skittishness about overhauling the system also reflects something else: the deep-seated psychological biases that make people resistant to change. Most of us, for instance, are prey to the so-called “endowment effect”: the mere fact that you own something leads you to overvalue it….What this suggests about health care is that, if people have insurance, most will value it highly, no matter how flawed the current system. And, in fact, more than seventy per cent of Americans say they’re satisfied with their current coverage. More strikingly, talk of changing the system may actually accentuate the endowment effect. Last year, a Rasmussen poll found that only twenty-nine percent of likely voters rated the U.S. health-care system good or excellent. Yet when Americans were asked the very same question last month, forty-eight per cent rated it that highly. The American health-care system didn’t suddenly improve over the past eleven months. People just feel it’s working better because they’re being asked to contemplate changing it.

This suggests that the psychological bias was actually triggered by the way health care reformers (and the Obama administration, specifically) framed the issue. The endowment effect could just as easily be used to support the offering of new entitlements (e.g., by emphasizing the long-term degradation of health care quality under the current system). Paul Pierson’s work suggests that government entitlement programs are inertial for the same reason. Once an interest group develops around a particular government program or policy, reform is met with extreme resistance by the beneficiaries of the program who fear losing their valued entitlements. This dynamic leads to prevents what Pierson and other political scientists call “welfare state retrenchment.”

The big problem with health care reform, as Surowiecki sees it, is that its proponents framed the reform as an attempt to cut costs. This framing automatically invoked the loss aversion biases of the general public. It didn’t help that reform opponents latched on to the bias and have milked it for all its worth.

Such anxieties have certainly been stoked by the reams of disinformation that have been spread about the Obama plan. They may also have been exacerbated by the Obama Administration’s initial emphasis on the way the plan would help hold down health-care costs. This approach was understandable: most people think health care is too expensive, so the ability to hold down costs seems like a selling point for the plan. The problem is that once you start talking about cost-cutting you make people think about what they might have to give up. And that makes them value what they have more highly.

It’s odd in retrospect that the Obama administration, for all of their respect for and reliance on scientific experts, didn’t seem to consult any social psychologists when devising the critical framing of this reform effort.