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Opinions on Practice Management

Practical Implications of Behavioral Economics for Dermatology Practice

Steven R. Feldman, MD, PhD, Scott Davis

Wednesday, July 10, 2013

Patient behavior is a critical issue that affects whether patients develop skin disease (for example, the ultraviolet [UV] exposure behavior that causes skin cancer) and whether patients with skin disease improve or recover with treatment (as their adherence to treatment determines their outcomes). Addressing the behavioral choices that patients make is an important component of dermatologic practice. The evolving area of behavioral economics that involves the psychology of the choices that patients make, and which was the basis for recent Nobel Prizes in Economics,1 has important practical implications for dermatologic practice.


Standard, traditional economic thinking modeled humans as completely rational utility maximizers. Experimental behavioral psychologists who have examined the choices that real people make have found that people's behavior diverges from this model in a long list of critically important ways (Table 1).2 Understanding these 'predictably irrational' characteristics of human thinking has implications for nearly all aspects of dermatology practice.3


Table 1. Common Cognitive Biases That Lead People to Behave Differently from a Rational Utility-maximizing Model.



Loss aversion

People place a far greater value on a loss than they do on a gain


The extent to which an item stands out from other items


The tendency to base decisions on a previously considered 'anchor'; even a random anchor can have a significant effect on people's decisions and behaviors


The context in which an event is observed affects the subjective perception of the event

'Not invented here'

People have a strong tendency to defend and act on what they perceive to be their own ideas


Meaning makes a strong contribution to people's perceptions of value


Consider the issue of loss aversion. People are bothered much more by losses than they value equivalent gains. Presenting information as a loss has the potential to be more meaningful than presenting the same information as a gain. Patients would probably be much less excited about a drug that would help them live a year longer than one that would prevent them from dying a year earlier. So, rather than explaining to patients that using sunscreen has a benefit in enabling them to look better for longer, we might choose to frame the use of sunscreen as helping to prevent the loss of their healthful, youthful-looking complexion.


Salience, the quality of standing out relative to other items, also has a major impact on people's thinking. People have a far greater fear of a terrorist attack on an airplane than they do of dying in a car accident, even though the latter is a far more common form of death. The terrorist attack stands out much more in the mind; the more graphic the image is, the greater the impact. We can put this to use in encouraging better sun protection by changing how we discuss skin cancer. Telling patients that sunscreen can prevent skin cancer does not have the same salience as telling patients that "sunscreen can help prevent you from developing a golf-ball-sized, ulcerating, odious skin cancer of your nose that requires removal of your nose, leaving a gaping hole in the center of your face, but don't worry, you would be able to wear a nice latex nasal prosthesis to cover the hole". The description of the specific possibility of a golf-ball-sized nasal tumor can have greater impact than the description of skin cancer in general, even though skin cancer in general is far more likely and includes the special case of the golf-ball-sized tumor.


Anchoring refers to the tendency to 'anchor' on a reference, even a random one, when making decisions. When people were asked to first think about the last two digits of their social security number and then state what they thought the value of an item was - people with higher numbers in the social security number stated higher values for the item.4 This can be used to affect the level of risk that patients perceive a risk to be. For example, telling patients that "the risk of this medicine is greater than the risk of a lightning strike", will appear much safer to patients than telling them that "the risk of this medication is less than a coin flip". Marketers use this same bias in getting people to purchase products, marking the price up high initially, then giving the consumer a lower price on discount. The initial high price provides an anchor that makes the discounted item appear to be of great value. Pricing cosmetic dermatology services could benefit from similar strategies.


Context has a huge effect on people's thinking. The frame of mind that people are in changes the way in which they view things and their resulting behaviors. Putting people in a religious frame of mind - even if they aren't religious - affects their likelihood of cheating. A study examined this phenomenon by administering a test to people on which they had the ability to cheat. The investigators found that by asking people to try to name some of the Ten Commandments before taking the test, cheating was nearly completely eliminated.5 This phenomenon might be useful for determining whether patients are taking their medication regularly; by discussing with them their religious affiliation before asking them about medication use, more accurate information on medication use can be anticipated.


People have a profound tendency to prefer and defend the ideas that they make themselves, along with a tendency to resist the ideas of others, particularly when those ideas are externally imposed. When we give medications to patients, there is a considerable likelihood that patients will be poorly adherent to the treatment regimen. It could be helpful to give strategies to patients that they can use to remind them to use the treatment, but if those strategies are pushed onto people, adherence may be paradoxically reduced.6 To the extent that we can, it may be helpful to elicit ideas on how patients will remember to use the treatment. If it is their idea (even if we help them come up with it), it is potentially going to be more effective.


Although standard economic theory focuses heavily on quantitative measures of value, real people are affected by the meaning of what they do. This was studied by paying research subjects to put together Lego models.7 The authors proposed that a sense of meaning was a hidden motivational driver of productivity in the labor-producing workforce. To study this, they recruited college students who were asked to perform the simple repetitive task of building pre-defined Lego models according to a per-unit wage schedule that declined on each successive model completion. Under one condition, the 'Meaningful' condition, subjects made multiple copies of the same model and placed each one on a desk such that the subject could observe steady accumulation of Lego models, whereas under the 'Sisyphus' condition, once subjects completed the model, the pieces were taken apart and given to them to make again. The total lack of meaning in the second condition led the students to put fewer models together and to require higher payment for the ones that they did put together. Fortunately for dermatologists, the feedback we get from patients for making their lives better gives our work tremendous meaning. And we don't just do dermatology; we are dermatologists. It is important that we share meaning with all our office staff; knowing that they, too, are contributing to making patients' lives better, which will build their morale and encourage them in their work efforts.



  1. Kahneman D. Thinking, Fast & Slow. Farrar, Straus and Giroux; New York, New York, 2011.
  2. List of cognitive biases. Accessed May 11, 2013.
  3. Ariely D. Predictably Irrational: The Hidden Forces That Shape Our Decisions. Harper Collins; New York, New York, 2008.
  4. Ariely D, Loewenstein G, Prelec D. Coherent arbitrariness: Stable demand curves without stable preferences.Q J Econ 2003;118:73-105.
  5. Ariely D. Cheating. Accessed May 11, 2013.
  6. Yentzer BA, Gosnell AL, Clark AR, et al. A randomized controlled pilot study of strategies to increase adherence in teenagers with acne vulgaris. J Am Acad Dermatol  2011;64:793-795.
  7. Ariely D, Kamenica E, Prelec D. Man's search for meaning: The case of Legos. J Econ Behav Organ  2008;67:671-677 (also available at


Other Recommended Readings

Ariely D. The (Honest) Truth About Dishonesty. Harper Collins; New York, New York, 2012.