Bringing the patient back in: behavioral decision-making and choice in medical economics

We explore the behavioral methodology and "revolution" in economics through the lens of medical economics. We address two questions: (1) Are mainstream economic assumptions of utility-maximization realistic approximations of people's actual behavior? (2) Do people maximize subjective expected utility, particularly in choosing from among the available options? In doing so, we illustrate-in terms of a hypothetical experimental sample of patients with dry eye diagnosis-why and how utility in pharmacoeconomic assessments might be valued differently by patients when subjective psychological, social, cognitive, and emotional factors are considered. While experimentally-observed or surveyed behavior yields stated (rather than revealed) preferences, behaviorism offers a robust toolset in understanding drug, medical device, and treatment-related decisions compared to the optimizing calculus assumed by mainstream economists. It might also do so more perilously than economists have previously understood, in light of the intractable uncertainties, information asymmetries, insulated third-party agents, entry barriers, and externalities that characterize healthcare. Behavioral work has been carried out in many sub-fields of economics. Only recently has it been extended to healthcare. This offers medical economists both the challenge and opportunity of balancing efficiency presumptions with relatively autonomous patient choices, notwithstanding their predictable, yet seemingly consistent, irrationality. Despite its comparative youth and limitations, the scientific contributions of behaviorism are secure and its future in medical economics appears to be promising.