Month: November 2013

Behavioral Economics for Health Law

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By Christopher Robertson

This year, the PFC’s annual conference will focus on “Behavioral Economics, Law, and Health Policy” (the call for abstracts deadline is next week).   Apropos, last week, Reuters featured a story by Jill Priluck “The Overselling of Behavioral Economics,” which itself seems to be a press release for a new article by NYU’s Rick Pildes and Ryan Bubb, called “How Behavioral Economics Trims its Sails and Why.”  In several fields, including consumer finance, Pildes and Bubb chronicle examples where policymakers tried to put behavioral economics principles into practice, and seem to have failed to produce desired results or have caused unintended consequences.  Some of their examples are controversial (in terms of both the interventions tried and the success of the outcomes), but those points are best addressed by the experts in those fields.

As health law considers its relationship to behavioral economics, I think a larger point is in order.  Allow me to be provocative: there is no such thing as behavioral economics.

Instead, the core of what we have called “behavioral economics” is just a set of observations (usually from lab experiments) where idealized and assumption-laden economic models have failed to actually predict human behavior.  At least at this stage of its development, behavioral economics is best understood as a negative project, not a positive one.   Of course, we do put labels on those documented failures like “regret aversion” or “social norming” or “optimism bias,” and it is then tempting to make things out of those labels.  Instead, when the limits of those simplistic economic models are found, that should simply return social scientists and policymakers to a domain of open-minded common sense about how people will actually behave when we take them outside the lab and try to regulate them.

While the behavioral economics literature does provide its own theoretical frameworks, which can generate new hypotheses, the best teaching of behavioral economics is simply fallibilism and empiricism.  That is why the “Nudge Unit” (aka Behavioral Insights Team) in the United Kingdom has prioritized the use of randomized experimentation to evaluate every “nudge” that it tries, and the sister initiative here in the United States is doing likewise.  I am optimistic of that approach.

DUE IN ONE WEEK: Call for Abstracts for Petrie-Flom Center 2014 Annual Conference

The Petrie-Flom Center Staff Leave a comment

The Petrie-Flom Center invites abstracts for its 2014 Annual Conference: “Behavioral Economics, Law, and Health Policy.” The conference will be held at Harvard Law School on May 2 and 3, 2014, and seeks to address the following questions:

  • Are there features unique to health and health care that prevent individuals, groups, and policymakers from making the best decisions?  What is a “best” decision, i.e., whose perspective should be paramount?
  • What types of barriers exist to rational decision making in the health care context, and what does rational decision making look like here?
  • Is exploitation of framing effects, default rules, nudges, and other elements of choice architecture appropriate when it comes to human health, or is this an area where pure autonomy should reign – or perhaps strong paternalism is needed? Is health policy special?
  • What should policymakers do when there is conflict between outcomes that might be good for individuals but not society more generally, and vice versa?  Where should the nudges push?
  • Which areas of health law, bioethics, and biotechnology policy are most amenable or resistant to manipulation of choice architecture?  When nudges are not plausible, what is the best way to overcome bounded rationality?
  • When might behavioral economics lead to the wrong results for health law, bioethics, and biotechnology policy?
  • How can manipulations of choice architecture be best evaluated empirically, and what ethical concerns might such research raise?
  • What are the most interesting or compelling health law, bioethics, and biotechnology policy nudges we should be thinking about today in the realms of obesity, organ donation, end-of-life care, biospecimen ownership and research, human subjects research, HIV testing, vaccination, health insurance, and other areas?

Please note that this list is not meant to be at all exhaustive; we hope to receive papers related to the conference’s general theme but not specifically listed here.

Abstracts are due by December 2, 2013.

For a full conference description, including the call for abstracts and registration information, please visit our website.

New Data on Drug Overdose Law

Temple University Center for Public Health Law Research Leave a comment

By Scott Burris

Working with Corey Davis of the Network for Public Health Law, PHLR has completed and posted updated longitudinal datasets of state laws authorizing naloxone distribution and creating “Good Samaritan” immunity for callers reporting a drug overdose to 911. Take a look at www.lawatlas.org.

On the theory that an image beats a few hundred words, here’s a report on the state of the law:

Enrollment in the Individual Market: Moving From Dire Predictions to Promising Early Facts

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By Christopher Robertson

Over at the Hoover Institute’s blog, Richard Epstein recently offered a scathing critique of the Obamacare rollout, making dire predictions about adverse selection that will lead to a “death spiral.”

[In defending the rollout, President Obama] hasn’t addressed the composition of the applicant pool, which clearly attracts individuals with known healthcare conditions who will receive extensive public subsidies to join the ranks of the insured. There is no way that the government exchanges can remain viable without attracting large numbers of healthy young persons, all of whom are well-advised to stay away in droves, until they become sick and can sign up with the plan of their choice, no questions asked. Obamacare can only remain solvent with an enormous public subsidy.

Today, the New York Times ran a story about the 360,000 Californians that have signed up for healthcare on its exchange, since it opened on October 1.  The early enrollment results seem promising, suggesting that adverse selection and public subsidies are not so problemmatic:

Officials said 18- to 34-year-olds made up 22.5 percent of the nearly 31,000 Californians who selected a private health plan in October. The same age group makes up 21 percent of the state’s population. … People who did not qualify for a subsidy enrolled in significantly higher numbers than those who did. The state reported that 4,852 people who selected a private plan in October were eligible for tax credit subsidies, which are based on income, compared with 25,978 who did not qualify.

Petrie-Flom Intern’s Weekly Round-Up: 11/17-11/24

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By Chloe Reichel

1) Following the legalization of medical marijuana in Massachusetts, 100 groups have applied for dispensary licenses. No more than thirty-five licenses are available within the state.

2) The Organization for Economic Cooperation and Development has released their annual survey, which ranks thirty-four countries on different health-related criteria. The United States was placed at twenty-six on the life expectancy ranking.

3) A recent survey conducted by the Pew Research Center has discovered that Americans’ attitudes toward end-of-life care are increasingly in favor of doctors taking all possible courses of action in order to prolong life. This statistic has jumped from 15% in 1990 to 31% in 2013.

4) This Thursday, President Obama signed into law a bill that reverses the ban on letting HIV-infected people donate their organs after death.  The ban had been in place since the National Organ Transplant Act of 1984.

5) Americans with health insurance plans that fall below the ACA’s standards may be allowed to retain their policies, but insurance companies will be required to send letters informing these subscribers of their options, including the federal insurance marketplace, prior to renewal of these plans. The letters will also need to warn subscribers of the plans’ deficiencies.

6) The FDA has issued a warning on two drugs used in cardiac stress tests that are linked to incidence of heart attacks. These drugs are used in patients who have significant difficulty exercising, in order to promote the heart’s blood flow.

7) Products including the external cardiac compressor are in use in hospitals across the nation despite a lack of FDA approval. The products predate the start of the FDA’s device regulation program, and some are considered high-risk but have never been tested by the FDA.

Broader Lessons from the Insurance Exchange Fiasco

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By Nicolas Terry

The political ripples from the poorly managed exchange roll-out likely will endure through at least one election cycle. Maybe, late night comedians will run out of material sooner. While criticism and inquiry are appropriate given the foreseeable nature of the problem (some months ago at SEALS even I was moved to highlight the OIG’s predictions that there would be little time for testing the data hub) mostly we will witness technical flaws being fashioned into a cudgel with which to beat the Affordable Care Act and its champion-in-chief.

As Ezra Klein has noted, “the politics here will be driven by the reality. If the policy continues to fail, then there’s nothing the White House can do to keep from being dragged down. Conversely, if the Web site is fixed come mid-December, and the policy begins working pretty well, then there’s no amount of Republican messaging that can make it a failure.”

Sitting here in mid-to-late November, it may be appropriate (or at least refreshing) to seek out some broader lessons that we may take away from this mess. In an illuminating post at the Commonwealth Fund blog David Blumenthal contrasted his experiences inside and outside of government and concluded that the federal government needed to reform its IT procurement system. Extrapolating even further from the current disaster Clay Shirky uses healthcare.gov to pose some fundamental questions about how managers communicate with technologists and how politicians approach Internet interaction with citizens. His “litmus test” for “whether out political class grasps the internet”? “Can anyone with authority over a new project articulate the tradeoff between features, quality, and time?” Those managing healthcare.gov failed that test.

Neil Flanzraich on Responsibility and Integrity in the Pharma Industry

The Petrie-Flom Center Staff Leave a comment

This afternoon, the Petrie-Flom Center welcomed Neil Flanzraich for a lunchtime talk on responsibility and integrity in the pharmaceutical industry.  Mr. Flanzraich is the Chairman and CEO of Cantex Pharmaceuticals, Inc. and Executive Chairman of Kirax Corporation. He was previously Vice Chairman and President of Ivax Corporation, Chairman of North American Vaccine, Inc., chairman of the life Sciences legal practice group of Heller Ehrman White & McAuliffe, and Senior Vice President and General Counsel and a member of the Executive Committee of Syntex Corporation. He is also a member of the boards of directors of Chipotle Mexican Grill, Inc. and Equity One, Inc., among a variety of other positions.  Mr. Flanzraich was appointed by Harvard Law School Dean Martha Minow as an Expert-In-Residence at the Harvard Innovation Lab (i-lab) in the fall 2012, and we were thrilled to have him join us to share some his experiences.

During today’s lecture, Mr. Flanzraich focused on the need for integrity and accountability in all areas of life, but especially in the pharmaceutical industry. At the broadest level, he emphasized that consistent honesty requires motivation and commitment, and in the business world, it is incumbent upon company leadership to set the right example, reinforced by frequent and sincere messaging encouraging honesty and discouraging dishonesty.  This is the way for companies to be truly successful over the long term, even if it means possible sacrifices over the short term. Mr. Flanzraich suggested that leaders must establish the right corporate culture of trust, but also verify compliance through audits and other types of oversight.

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GM Food Labeling: An Unfinished Battle

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By Kuei-Jung Ni

In Washington state, a proposal (Initiative 522) to require labeling of genetically modified (GM) or engineered (GE) foods was defeated recently by votes of 45.17% in favor and 54.83% against. The state law would have implemented mandatory labeling requirements on food composed of 0.9% or more of GM ingredients, measured by weight. Prospects for passage of the proposal were quite promising when it was first introduced. But, the scenario shifted when GM food companies, including General Mills, Nestle USA, PepsiCo, Monsanto, etc., launched a multi-million dollar advertisement campaign challenging the justification for GM labeling.

The downfall of the proposal, while disappointing consumer groups, is not likely to stop the labeling movement. Actually, there have been many other attempts to regulate GM foods on a state level. California Proposition 37, which would have imposed labeling requirements similar to the Washington proposal, was put to a vote last year, but failed to pass. According to Just Label It, a NGO, more than 20 state laws were introduced about GM labeling this year.

Many scientists trust the safety of GM foods, and the benefits brought by the development of GM agriculture are obvious. GM crop production can reduce the use of pesticides and enhance yields. By contrast, in addition to possible new allergies caused by the consumption of GM foods, some worry about their potential harm to the environment and ecological system. On the federal level, three agencies are competent to regulate GM crops and foods: the Food and Drug Administration (FDA), the U.S. Department of Agriculture (USDA), and the Environmental Protection Agency (EPA), which use existing rules to regulate. Yet, the inadequacy of their oversight has been disclosed. Until now, no specific federal law has been enacted to regulate GM food production and consumption.

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FSMA Proposed Rule on Accreditation of Third-Party Auditors

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By Ching-Fu Lin

Earlier this year, the Food and Drug Administration (FDA) published for public comment the proposed rule to implement §307 of the FDA Food Safety Modernization Act (FSMA).  The proposed rule is to establish a program for accreditation of third-party auditors to provide the FDA with a more efficient tool to regulate food products.  Particularly, it assists the FDA in regulating food entering the United States via international trade, as it is recognized by the FSMA that the FDA is administratively and financially unable to ensure the safety of imported foods solely on its current system of border inspection.  Under the new program, the FDA would recognize accreditation bodies, which would in turn accredit third-party auditors.  These third-party auditors would then conduct onsite food safety audits in foreign jurisdictions and issue certifications for foreign food producers.  According to the FSMA and the proposed rule, an accreditation body can be a foreign government/agency or a private third party, and a third-party auditor can be a foreign government, foreign cooperative, or a private third party.  Both are required by the proposed rule to meet standards for legal authority, competency and capacity, impartiality/objectivity, quality assurance, and records procedures.

Will such a multilayer delegation structure result in dilution of accountability and effectiveness?

Congress -> FDA -> Accreditation Body -> Third-Party Auditor -> Producer

The FSMA seems to have created a regulatory dilemma for the FDA in terms of addressing imported food safety.  The dilemma results from a structural mismatch between the broad scope of power granted to the FDA and the long chain of delegation to foreign/private actors as primary “regulators.”  The FSMA instructs the FDA to delegate its regulatory authority to foreign governments and/or private third parties, aiming to largely increase the effectiveness of regulation along the global supply chain. However, the FSMA does not give the FDA adequate capacity to closely oversee such foreign/private regulatory agents along the delegation chain.  Thus, the FSMA cannot hold foreign/private regulatory agents fully accountable for their failures in ensuring food safety.

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