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Behavioural economics helps determine preference for different healthcare systems

U of T professor and visiting Fulbright scholar conduct interdisciplinary study
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Healthcare systems vary around the world. Indeed, some of the largest and most powerful countries have dissimilar health policies. Interested in determining how people’s attitudes affect their preferences towards different models of healthcare dissemination, Alex Kamath, a recent political science grad from New York University, conducted a study across five different countries, in collaboration with Dr. Peter Loewen, an assistant professor of political science at UTM.

“My research falls under political behaviour, which is trying to explain how certain elements happen and how people interact in politics, for example political participation or voting,” says Kamath, who is visiting U of T on a Fulbright scholarship. “We used… three stylized system[s] in our research… one is based off of the market system… that’s found in the United States, then there’s the more universal system that’s in Canada and then there’s a more mixed system that’s found in Australia,” he says.

“A market system says, ‘we’ll provide a basic level of care for the elderly and the poor, but everyone else needs to buy insurance,’ a universal system, [such as the one] based in Canada, says, ‘we are going to give everyone the same level of healthcare, regardless of income,’ and the mixed is ‘we’re going to give people a minimum level of care for everybody, but if you have means you can purchase more care, or get access to better care,’” explains Kamath.

Using the three aforementioned healthcare models, Kamath and Loewen conducted surveys of 4,000 participants across five different countries — Canada, US, UK, Australia, and New Zealand.

“We argue that there [are] fundamental individual-level differences that… precede these political experiences and other experiences like interaction with the system,” says Kamath. To test the effect of these prepolitical differences, subjects were evaluated on three domains — altruism, trusting behaviour, and risk preferences — using behavioural economics games.

A game that tests subjects for altruism could involve the transfer of money. In one of these games, Kamath explained, the researcher would give a subject a certain amount of money — say $20. The subject would then be given the option to choose to give any amount from the $20 to another subject. It would be up to the subject to decide if they want to give none of it, half of it or all of, with varying amounts in between. This scenario would help measure the altruistic tendencies of the subject, because an economic robot would not give any money away. Due to human emotion and altruism, “people tend to give other amounts,” says Kamath.

“You can classify individuals as altruistic, risk-loving, risk-averse, trusting government, or not trusting government,” Kamath says, adding, “By their willingness to engage in a certain behaviour, you can… put [people] into a certain type.”

Conducting statistical analysis, Kamath and Loewen found interesting results. “We… regressed results using a multinomial logit model… and what we found is that as you’re more altruistic, your preference for a universal or mixed, over market system increases,” says Kamath, adding, “As you’re more risk loving, your tend to prefer the market system.”

Kamath also included a political ideology factor within the study. “People would argue saying [that] these fundamental individual differences are not causing the results, [they are] just a result of ideology and partisanship explanations,” he says.

One version of the study included the ideology factor and one didn’t. “If… these fundamental differences were exerting an influence, then the results should be similar when we include the ideology factor, and indeed they were,” says Kamath. “There [were] other specific things; so we looked at age, gender, socioeconomic income differences” he says.

“Some of the major findings were that the system that you’re in affects your views, so people who grew up in a universal system tend to support more universal systems, that was an interesting finding,” Kamath says. “These factors do play a role, and so they can influence policy because [countries] can create systems that align with people’s fundamental values,” he continues.

Studies like the one conducted by Kamath and Lowen could help guide public health policy, tailoring it to suit people’s preferences. “A lot of reform attempts have focused on… veto points or interest groups and they don’t understand that maybe these attempts are just necessarily constrained by the type of system that you have, because that’s affecting public opinion,” says Kamath.

This study is unique in that it follows a more bottom-up approach as opposed to one that looks at the problem at a macro level. “Healthcare at its core… is a collective action problem,” Kamath concludes.