The Illusion of Choice

President Obama is going to Capitol Hill tomorrow to try to convince legislators, and the associated national audience, to support health care reform. He's got a tough battle in front of part because of people's fears about what that change might mean. We might lose the health care and choices we have now. We might have to wait to see doctors, or to have operations. And so on.

But all of that presupposes that we (we being the working, insured population of America) have something worth keeping, choice, and access now. And the option, if reform doesn't happen, of keeping our insurance and service delivery the same.

Neither of which is necessarily true.

The company through which I get my health insurance was recently acquired by another corporation. The new HR department told us that while we would have a new insurance carrier, our plans would be rolled over into a similar kind of coverage at the new company. But when I went to arrange a doctor's appointment, I was told that I now needed to see a primary care physician first, because I'd been switched from a Preferred Provider Organization (PPO) to a Health Maintenance Organization (HMO). There's a big difference between those two types of health care plans. (In a PPO, there's a network of preferred providers, all of whom can be in individual, private practices. Reimbursement for using that network (providers who've agreed to the insurance company's reimbursement rates) is higher than going out of network, but you can go to anyone you want, at any time, and get some compensation. In an HMO, you need to see a primary provider first and get a referral to someone else in a very structured network, all associated with that HMO company. And you have to use a physician in that HMO network in order to get any compensation.)

I called the benefits person and said there had been a mistake, and I wanted to change my health insurance back to a PPO plan, even though I recognized that it would cost me more in premiums.

"You can't do that," she answered. "We don't offer a PPO. We only offer an HMO."

"I don't have any choice at all?" I asked.

"Sure you do. You can opt out in the next open enrollment session, which is in three months."

"Opt out?"

"Opt out of our health plan altogether."

"So then what insurance would I have?"

"You wouldn't have any."

I called the benefits folks at the old corporate owner, just to make sure I wasn't imagining that I used to have it better. If I recalled, I told the woman I spoke with there, we'd had several types of plans to choose from, back in the days when they were in charge.

"Well, we actually discontinued that. Now we only offer people one health plan, too. It's just that the plan we offered happened to be the one you had anyway."

So despite the fact that I'm a gainfully employed, working adult with supposedly "good" health insurance,  I actually have no choice about the kind of health care plan, and therefore the kind of health care, I can get. What's more, the type and quality of that insurance coverage obviously can be arbitrarily and summarily altered, at any time, without any input from me.  So ... even if an overhaul of our health care coverage reduced choice and control (which is not at all a given), it wouldn't really be any different than what I'm facing now.

As a matter of fact, my parents, who are on the government-run system called Medicare, have more choice and control in their health care I do. Of course, when my dad needed a knee replacement, and I found the doctor who seemed best for the job, I was told, in July, that the first office appointment available was in early November, and the first potential surgery date would be in late January. So even when we have reasonable choice, we don't necessarily have reasonable, or easy, access.

Which leads me to wonder, what the heck are people so afraid of losing?

James Surowieki offered some interesting potential answers to that question in last week's New Yorker. Multiple psychological studies he referenced have apparently shown that most humans are susceptible to something called the "endowment effect," which means we tend to over-value things we own. We wouldn't imagine selling old Aunt Martha's silver collection for less than $5,000, for example, even though we wouldn't pay more than $500 for an identical set from someone else's attic.

So we tend to think our insurance is better than it is, simply because it's ours. But Surowieki thinks there's another psychological effect at play, as well: something known as the "status quo bias." In short, we fear losing more than we care about gaining, so we fear changing what we have for an unproven "other," even if what we have isn't so terrific. Nobel prize winners Daniel Kahneman and Avos Tversky called this inclination "Prospect Theory," explaining that people had to feel like they would gain far more than they stood to lose before they would gamble on the outcome. Which, in the context of health care, means that in order to get enthusiastic about changing the system, the perceived benefit would have to be not just equal, or a little bit better for less money, but several times greater than any perceived cost, risk, or negative trade-offs. That's a pretty high bar to clear.

We also are susceptible to a clear and simple fear of the unknown. Known misery, or "the devil you know," is more comfortable to us, in many ways, than the great unknown, even if the unknown offers the possibility of far greater improvement or rewards. It's why so many people stay in bad relationships or jobs. Among other things.

Important to note, however, is that all of those effects are irrational tendencies, not recommended strategies. We may overvalue the status quo and fear changing it, but that doesn't always lead to a happy ending ... especially when the world is changing around us, or the status quo is a sinking ship.

And that's the other important point worth considering in all of this. It's not even a matter of changing the status quo. The status quo is changing itself. So we don't really have the option of not changing. Not because the system is broken, or will bankrupt our children, but because our insurance is being altered on us now, whether we like it or not. Employers are cutting back benefits and options, and that trend isn't going to reverse itself without some serious restructuring.

So ironically, the only way to keep our health care from changing is to change the system; take the control of our choices away from our employers and give us more choice in what kind of insurance we opt in for. Or as Surowiecki put it: "if we want to protect the status quo, we need to reform it."

Note: I will be offline for the next week, returning September 18th.

Photo Credit: Flickr User Oswaldo Ordonez (Orcoo)