Freakonomics: How to Save $32 Million in One Hour

From Freakonomics: For nearly a decade, governments have been using behavioral nudges to solve problems — and the strategy is catching on in healthcare, firefighting, and policing. But is that thinking too small? Could nudging be used to fight income inequality and achieve world peace? Recorded live in London, with commentary from Andy Zaltzman (The Bugle). DUBNER: Our next guest is a physician as well as a professor of medicine and health care management at the University of Pennsylvania. He’s also the director of the Penn Medicine Nudge Unit. He’s done many studies and interventions around patient compliance, physician behavior, and systems operations in health care. Would you please welcome Mitesh Patel. Mitesh, nice to see you. Mitesh PATEL: Thank you for having me on. DUBNER: How common is a nudge unit inside a hospital system? PATEL: Not that common yet, but we hope to change that. DUBNER: Were you the first? PATEL: We were the first behavioral-design team embedded within the operations of a health system in the world. DUBNER: No offense, but in my experience doctors, in particular, are not very fond of being told how to do what they do. So I’m really curious how you pulled it off strategically. PATEL: Yeah, it was a significant challenge. Many doctors, including myself, have been through a decade of training, and medicine has become more specialized and so people are experts in their fields. I think there are two key things that helped. One is to reveal to clinicians that they themselves are being nudged and they’re just not even aware of it. The design of the electronic health record is pushing you in a direction and sometimes you’re taking a lot of extra steps to do that. And the other is to engage them. The way we started off our Nudge Unit was actually to host a crowdsourcing challenge where clinicians and other stakeholders could submit ideas. And we actually got 225 ideas in two weeks from clinicians. DUBNER: So give us a very quick rundown — we’ll drill down — of some of the interventions you’ve done. PATEL: You know, one of the first things that preceded the Nudge Unit — and was actually the impetus for building it — was changing generic prescribing rates. And we were able to move the needle significantly, from 75 percent to 98 percent, almost overnight. DUBNER: Just by switching the default? PATEL: What happened was a rogue IT person was implementing something else around prescribing. And actually noticed this and said, “I’m just going to put a checkbox here, and if they don’t check that box, the prescription is going to go to the pharmacy as generic.” And the next week or so, the health system got a phone call from our largest insurer and said, “You just went from last place to first place in generic prescribing. Instead of penalizing you, we’re going to give you a bonus.” And the first thing everyone said is, “This is not possible. We’ve been last for years.” And then we realized what had happened: one hour of work resulted in $32 million of savings in the course of two years. DUBNER: Unbelievable. So if there was that much money to be saved, so easily, why hadn’t this been done before? PATEL: In the U.S., and I think in other countries around the world, the way that doctors make decisions changed in the last decade. It used to be all of this was done on prescription pads and over the phone, and so we didn’t have insight into what was going on, nor could we change it. But now 90 percent of doctors use electronic health records. And so most of the effort has been to get the electronic health record system set up, to get doctors using them, and there hasn’t been much testing. So there are lots of good ideas that are locked into one department or one hospital and don’t get spread to other places. And there are lots of bad ideas that are implemented and never taken away. Our approach is to take a systematic way and test these things so we can scale the ones that work and turn off the ones that don’t. DUBNER: I understand you also changed the default on the number of opioids that are typically issued after surgery, let’s say, yes? PATEL: Yes, so when you come into the emergency department and you have an ankle sprain or you just got a tooth pulled or another injury, there’s good evidence to show the larger the amount of pills you get, the more likely you’re going to be addicted. And so we found that just by changing the default from 30 pills to 10 pills, it cut unnecessary opiate prescribing in half. DUBNER: And did you find that 10 is actually an optimal number? Should it perhaps be even lower? Do you know? PATEL: So there are actually guidelines around this that recommend that you should get three to five days of opioids, which is about 10 pills. But the great thing about using defaults is it doesn’t force you to make a decision. Clinicians can override that. DUBNER: Mitesh, I understand there’s also an intervention you’ve done on cardiac aftercare, yes? Let’s say I come in. I have a heart attack. I’m treated. I’m alive and relatively well. I leave the hospital. Then what happens typically? PATEL: So typically when someone comes in and has a heart attack, we know that exercise is good for them. There’s actually a structured program called cardiac rehabilitation or cardiac rehab. It’s a 12-week program. You go in for two, three, or more sessions, and you do exercise and get advice from a cardiologist. It’s like having a free gym membership with a cardiologist available for consultation. There’s essentially no harm to it. Everyone should get it. Our cardiac referral rate was 15 percent. Meaning 100 patients come into the hospital each week with a heart attack. Eighty-five of them go out the door never even being told that this exists, let alone that insurance covers it. And so we worked with them to redesign this. And of course, we had to figure out what the problem was. And we found out it was a manual process. And the burden was put on the cardiologist. On a busy day of rounds, they had to identify who is eligible for cardiac rehab and fill out a form with 15 different fields: name, date of birth, medical record number — things that already exist in the electronic health record. So we spent some time talking to cardiologists and testing things for three months. And what we did is we used the electronic health record to automatically identify patients who had a heart attack. Turns out that’s easy. They’ve had a stent placed or they’re on certain medications. We notify other care members, not the clinician on rounds. And when they arrive to that patient’s room, this form it’s automatically signed. And then we close the loop with the patient, which had never been done before. DUBNER: Okay. You’re still dealing with the fact that they have to want to participate in that physical activity. Do you have any nudges to help with that? PATEL: Yes, so this alone — just referring them — increased the referral rate from 15 percent to 85 percent, and the attendance rate from 33 percent to 55 percent. So, huge lift there. We have a bunch of interventions around getting people to be more physically active and we are actually testing them in combination with these referral patterns. Most recently we’ve working on gamification, and found that it increased physical activity. ZALTZMAN: And I think you can take it further. We’ve seen the NFL basically damages people’s health. You can set up a league of something that improves people’s health — a National Cardiac Recovery League, and have a draft, and all the teams trying to sign up the illest patients and things. Look, I think it could be the next breakthrough sport for America. PATEL: Well, I like where you’re going. We’ll have to test it in different settings and see how it works out. DUBNER: One problem that the medical community has come to recognize lately, or acknowledge, is the issue of too much medical care in the form of tests and procedures and medications. Are you doing anything about that? PATEL: Yes. So we have a great example from palliative cancer patients. These are patients who are at the end of life. They may have days to weeks left to live. And oftentimes they can get radiation therapy to shrink the tumor. Sometimes it’s pinching on a nerve. Other times it’s in an uncomfortable place and radiation therapy can make the end of their lives easier. In order to make sure that the radiation hits the tumor correctly we’ll often do C.T. scans or X-rays. Now, when we know we’re going to cure the patient, or we’re trying to cure the patient — the patient’s going to live many years — and we need to do an X-ray or C.T. scan possibly every day because we don’t want to hit normal healthy tissue. But there’s a lot of evidence — even national guidelines — saying, at the end of life, we shouldn’t be exposing patients to unnecessary imaging. It costs them a lot of money and it doesn’t lead to any benefit because the patients are going to die in a few weeks or months. What we found in our health system is 70 percent of these patients at the end of life were getting daily imaging. Meaning, if you had 14 doses of radiation, you got 14 X-rays or C.T. scans. And oftentimes insurances were no longer covering this, and they may get hit with some of the bill for that. DUBNER: So let me ask you this. Medical history is full of stories about successful treatments being discovered, with strong evidence, and then not enacted for months, years, decades. And I’m curious what the rate of adoption is like for these interventions that to me sound sensible, doable, cheap, executable, etcetera. Are hospitals around the country rushing to — if not emulate you by setting up their own Nudge Units — at least reading these papers and trying to do things like switch defaults for generics and so on? PATEL: Yeah. Our goal is to hopefully spread this around the country. And so we’re doing two things to really scale this. One is we host an annual nudges-in-health-care symposium, bringing together health systems across the world who want to implement nudges or nudge units. And the second is we’ve launched a Nudge Collaborative. It’s an IT platform where people can share insights from what’s worked and what hasn’t. We’ve worked on more than 50 projects now. So we have a bunch of successes but also failures and we don’t want those to be replicated. We want the good ones to be replicated. But it also provides a management tool. We’ve learned a lot from how we manage all the crowdsourcing ideas that come in and what moves forward and what doesn’t. And this is a platform that will help health systems who want to do this do it by hitting the ground running. DUBNER: I have to say, I’m so glad you’re out there doing this work — it gives me hope and it’s exciting. Thank you so much for joining us tonight, Mitesh Patel. PATEL: Thank you. Listen and read more on Freakonomics.