Alumni Books Podcast: Irrationality in Health Care

Despite spending 18% of its money on health care, the United States gets less in return than other countries. Here, doctors more often prescribe antibiotics for common viruses despite knowing better, and patients often don't stick to their physicians' recommended treatment.

Doug Hough '71 discusses these and other such quandaries in the U.S. health care system in a new book. Amid the chaos of the Affordable Care Act's debut year, Hough published Irrationality in Health Care, What Behavioral Economics Reveals About What We Do and Why.

Hough, who studied economics under four Nobel laureates in his days at MIT, is now an associate professor in the department of health policy and management at the Bloomberg School of Public Health at Johns Hopkins University. After teaching medical students traditional economics for years, he discovered that behavioral economics, a relatively new field, appealed much more strongly to their experience. Hough realized that no one had yet written an examination of how the country might learn from applying such a model to the healthcare system at large.

(Read the episode transcript.)

“The problem with the Affordable Care Act,” says Hough, “and in some sense with Healthcare.gov is that now people are mandated to have some insurance…but in order to have that insurance they've had to go through that awful experience on the website. [Americans] want to buy insurance with as much difficulty as they have buying a book on Amazon.”

“One way this whole process could have been easier is to say by default you are automatically insured. That way, everybody would know they would have insurance starting January 1, and they’d have the ability and ease to change that in a relatively short period of time.”

Listen to or download this podcast for more of Hough’s thoughts on contemporary health care and economics.