Topic
Discuss 2 ways healthcare leaders use behavioral economics to improve decision-making.
Instructions
Each thread must be 600-800 words and demonstrate course-related knowledge. You must include at least 2 citations for each thread. Current APA format must be used. Need a biblical source as well.
Discussion Board Post: Behavioral Economics in Decision Making
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Most economic models are based on the assumption that decision makers in organizations possess unlimited willpower and are rational beings. Although such assumptions are usually regarded as harmless, incorporating realistic perspectives is beneficial in management. Behavioral economics refers to the branch of economics that integrates both economics and psychology and does not consider assumptions regarding willpower and complete rationality. Incorporating psychology in economics helps to address individual decision making by following more accurate principles that are based on what people gain through practice instead of theory. Time and brain power are both scarce resources hence many people opt to involve the rules of thumb when engaging in decision-making (Lee, 2019). The purpose of this discussion is to discuss how behavioral economics can be used to enhance decision making among healthcare managers.
One of the ways that healthcare managers use behavioral economics is the nudge which is a tool that entails tweaking the environment to influence better decisions. The nudge helps to predictably alter people’s behaviors without making significant changes to economic incentives or forbidding any options. For example, in the healthcare environment, managers may wish to improve hand hygiene decisions among the staff to reduce the rates of hospital-acquired infections. Therefore, they may opt to place hand sanitizers and handwashing posts at the entrance of every hospital unit where they can be easily seen to nudge providers to always clean their hands before entering a specific unit and after leaving them. Some leaders may opt to place more stations where the clinical staff can access other hygiene items such as clean gloves and where they can easily dispose them after they are done checking a specific patient. Such actions simply alter the environment and act as incentives for better decision-making (Matjasko et al., 2016).
Healthcare leaders may also opt to use framing to influence decision-making. People make choices based on how the options are presented. In the healthcare environment where the stakes are high, framing may be an easy way of influencing decisions. Framing can be used in different forms. Healthcare managers can choose to describe the characteristics of choices differently or may also choose to describe choice outcomes differently. For instance, a manager may decide to emphasize on the positive attributes rather than negative attributes. Patients are more likely to visit hospitals which focuses on high rates of patient satisfaction rather than those which focus on low mortality rates. Managers may also frame the goals of their healthcare facilities using negative goal frames to attract more consumers because most people are loss averse and are more likely to respond to goals which are framed negatively. Notably attribute framing has larger effects in comparison to goal framing. Healthcare managers must identify situations where framing matters and utilize them to influence decision making (Lee, 2019).
In conclusion, healthcare leaders can use behavioral economics to influence decision-making among patients and the clinical staff. Therefore, healthcare leaders must be aware of their power of influence and how to exert it to promote positive decisions. The Bible emphasizes on the importance of being a positive influence to others. Matthew 5:13-16 states, “You are the salt of the earth, but if salt has lost its taste, how shall its saltiness be restored? It is no longer good for anything except to be thrown out and trampled under people’s feet. You are the light of the world. A city set on a hill cannot be hidden. Nor do people light a lamp and put it under a basket, but on a stand, and it gives light to all in the house. In the same way, let your light shine before others, so that they may see your good works and give glory to your Father who is in heaven” (English Standard Version Bible, 2001).
References
English Standard Version Bible. (2001). ESV Online. https://esv.literalword.com/
Lee, R. H. (2019). Economics for healthcare managers (4th ed.). AUPHA. ISBN: 9781640550488.
Matjasko, J. L., Cawley, J. H., Baker-Goering, M. M., & Yokum, D. V. (2016). Applying Behavioral Economics to Public Health Policy: Illustrative Examples and Promising Directions. American journal of preventive medicine, 50(5 Suppl 1), S13–S19. https://doi.org/10.1016/j.amepre.2016.02.007