The Imperfect Mind

I think a great parallel for healthcare consumerism is the shift to 401Ks. People had to take new responsibility. People had to begin to understand the markets. People had to think long-term. And, a certain percentage of those people failed. (At least that’s what I call it when I hear people are retiring with less than 2 years income in savings, no pension, and are therefore dependent on social security – see study from a few years ago.)

Obviously, we can risk a nation of people who fail at their healthcare and end up bankrupt, sick, and dependent on the government to bail them out.

So, I found a brief article in Money Magazine (Sept. 2007, pg 113) about Daniel Kahneman who won a Nobel Prize for explaining why people make the wrong decisions time after time about investing or spending money. He is a psychologist not an economist. Here were a few things from his interview (I paraphrased when not in quotes):

  • It’s unrealistic to believe people are rational and use all available information to make consistent decisions.
  • People respond to how things are positioned. (E.g., “An investment said to have a 80% chance of success sounds far more attractive than one with a 20% chance of failure.)
  • We need to make fewer decisions. He says there are two that matter: (1) “how much of your wealth you want to put at risk” and (2) “how much risk you want to take with it”.
    • I am sure there is a healthcare parallel here. What type of lifestyle do you want to have? And, how much work are you willing to put in to achieve that? (Not sure that’s it, but I think it can be simplified and a framework applied to let us make consistent decisions with long-term implications.)

Later, in the same magazine, Jason Zweig has an article titled “Your Money and Your Brain” which is excerpted from the book by the same name ©2007.

  • “Your investing brain often drives you to do things that make no logical sense – but make perfect emotional sense.”
  • “Scientists in the emerging field of ‘neuroeconomics’ – a hybrid of neuroscience, economics, and psychology – are making stunning discoveries about how the brain evaluates rewards, sizes up risks and calculates probabilities.”
  • He talks about the thrill of the chase. Our mind is more excited anticipating a profit than when we get one. (Think about this in terms of the need for constant reinforcement and rewards to drive behavior over time.)
  • He talks about the implications on long-term memory and an experiment showing that people were more likely to remember things that were associated with a reward than those that weren’t. (Think about this in terms of health education.)
  • I think a great quote is “we tend to judge the probability of an event by the ease with which we can call it to mind.”
  • He talks about the peer pressure impact on your brain. (We all saw this with the study last year on obesity linked to who your friends are.)

One Response to “The Imperfect Mind”

  1. Dear Mr. Van Antwerp,

    I have been enjoying reading and exploring your site. A finacial advisor friend, one who has a “give first” action based personal found your site for me. Being in chiropractic and acupuncture, this has been the most engaging of the early posts I have read. Obviously I am interested in what drives us into preventative mode. Who is and why are some so willing to pay out of pocket and above and beyond conventional coverage for care that should prevent or lessen the need for more expensive, more dangerous intervention in the future?

    Thank you for this forum, I look forward to further exploring.

    all the best,
    Dr. Sean Lynch

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