One of my favorite social science experiments (yes, I’m that nerdy) involved comparing how car drivers felt when they purchased gas in two seemingly equivalent situations. In both arrangements, the price per gallon was three cents higher for those paying by credit card than for those paying by cash. But in the first set-up, the gas station sign displayed the credit card choice, and drivers only learned when they reached the pump that they could get a three cent discount if they paid cash. In the second set-up, the sign showed the cash price, and drivers learned from a placard at the pump that if they chose to pay by credit card they would have to pay three cents more per gallon.
The first set-up made people happy to discover a discount option. The second set-up made people annoyed at learning about an additional, “hidden” fee. Same prices, but different experiences, thanks to what social scientists call the “choice architecture.”
I was reminded of this experiment while reading the latest news about health care reform legislation. One idea being considered will let states (that is, state government officials) opt into offering (some) Americans a public option for their health insurance. Another will create a national public option and allow states to opt out. Health care consumers in each state will then face their own choices, so this shapes up as a two-stage option process.
But actually, it’s a three-stage process, because before state officials and the health care consumers who elect them get around to evaluating their options, the House and Senate leaders currently merging the committee bills have to decide what to include in the versions that will be sent to the floor for amendment and debate. One set of amendments will be in the floor bills, and require votes to remove. Another set of amendments will not be in the bills, and require votes to insert.
If you are growing frustrated at the complexity of this situation, take heart. You are exemplifying one of the main principles of choice architecture. As articulated by Richard H. Thaler and Cass R. Sunstein in Nudge, their marvelous book on this subject, the principle is as follows: “People make good choices in contexts in which they have experience, good information, and prompt feedback.”
The gas station visitors’ happiness or frustration would be a one-time thing, and no big deal. Fool them once, etc. Quite the opposite applies for the Congressional leadership, the House and Senate membership and their staffs, the state legislators and governors, and we, the health care and health care insurance consumers of the United States.
So watch the next week’s developments carefully, and remember: whatever gets installed as the default in health care insurance is probably going to apply to more of us than the range of alternatives which may accompany it. Our instinct in being presented with such low experience, high but poor information, and delayed feedback choices as pertain in health care (and health care insurance, and health care insurance policymaking) is to just take a pass on filling up and keep driving.
Michael, a political scientist, is the author of two books about the Internet and American politics. He currently serves as an Adjunct Professor at The Graudate School of Political Management at George Washington University.
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