The Paradox of Choice Read online

  Choosing Health Insurance

  HEALTH INSURANCE IS SERIOUS BUSINESS, AND THE CHOICES WE MAKE with respect to it can have devastating consequences. Not too long ago, only one kind of health insurance was available to most people, usually some local version of Blue Cross or a nonprofit health care provider like Kaiser Permanente. And these companies didn’t offer a wide variety of plans to their subscribers. Nowadays, organizations present their employees with options—one or more HMOs or PPOs. And within these plans, there are more options—the level of deductible, the prescription drug plan, dental plan, vision plan, and so on. If consumers are buying their own insurance rather than choosing from what employers provide, even more options are available. Once again, I don’t mean to suggest that we can’t or don’t benefit from these options. Perhaps many of us do. But it presents yet another thing to worry about, to master, or, perhaps, to get very wrong.

  In the presidential election of 2000, one of the points of contention between George W. Bush and Al Gore concerned the matter of choice in health insurance. Both candidates supported providing prescription drug coverage for senior citizens, but they differed dramatically in their views about how best to do that. Gore favored adding prescription drug coverage to Medicare. A panel of experts would determine what the coverage would be, and every senior citizen would have the same plan. Senior citizens would not have to gather information, or make decisions. Under the Bush plan, private insurers would come up with a variety of drug plans, and then seniors would choose the plan that best suited their needs. Bush had great confidence in the magic of the competitive market to generate high-quality, low-cost service. As I write this, three years later, the positions of Democrats and Republicans haven’t changed much, and the issue has yet to be resolved.

  Perhaps confidence in the market is justified. But even if it is, it shifts the burden of making decisions from the government to the individual. And not only is the health insurance issue incredibly complicated (I think I’ve met only one person in my entire life who fully understands what his insurance covers and what it doesn’t and what those statements that come from the insurance company really mean), but the stakes are astronomical. A bad decision by a senior citizen can bring complete financial ruin, leading perhaps to choices between food and medicine, just the situation that prescription drug coverage is intended to prevent.

  Choosing Retirement Plans

  THE VARIETY OF PENSION PLANS OFFERED TO EMPLOYEES PRESENTS the same difficulty. Over the years, more and more employers have switched from what are called “defined benefit” pension plans, in which retirees get whatever their years of service and terminal salaries entitle them to, to “defined contribution” plans, in which employee and employer each contribute to some investment instrument. What the employee gets at retirement depends on the performance of the investment instrument.

  With defined contribution plans came choice. Employers might offer a few plans, differing, perhaps, in how speculative the investments they made were, and employees would choose from among them. Typically, employees could allocate their retirement contributions among plans in pretty much any way they liked, and could change their allocations from year to year. What has happened in recent years is that choice among pension plans has exploded. So not only do employees have the opportunity to choose among relatively high-and low-risk investments, but they now have the opportunity to choose among several candidates in each category. For example, a relative of mine is a partner in a midsized accounting firm. The firm had offered its employees 14 different pension options, which could be combined in any way employees wanted. Just this year, several partners decided that this set of choices was inadequate, so they developed a retirement plan that has 156 options. Option number 156 is that employees who don’t like the other 155 can design their own.

  This increase in retirement investment opportunities appears to be beneficial to employees. If you once had a choice between Fund A and Fund B, and now Fund C and Fund D are added, you can always decide to ignore the new choices. Funds C and D will appeal to some, and others won’t be hurt by ignoring them. But the problem is that there are a lot of funds—well over 5,000—out there. Which one is just right for you? How do you decide which one to choose? When employers are establishing relations with just a few funds, they can rely on the judgments of financial experts to choose those funds in a way that benefits employees. That is, employers can, like the government, be looking over their employees’ shoulders to protect them from really bad decisions. As the number of options increases, the work involved in employer oversight goes up.

  Moreover, I think the adding of options brings with it a subtle shift in the responsibility that employers feel toward their employees. When the employer is providing only a few routes to retirement security, it seems important to take responsibility for the quality of those routes. But when the employer takes the trouble to provide many routes, then it seems reasonable to think that by providing options, the employer has done his or her part. Choosing wisely among those options becomes the employee’s responsibility.

  Just how well do people choose when it comes to their retirement? A study of people actually making decisions about where to put their retirement contributions found that when people are confronted with a large number of options, they typically adopt a strategy of dividing their contributions equally among the options—50–50 if there are two; 25–25–25–25, if there are four; and so on. What this means is that whether employees are making wise decisions depends entirely on the options that are being provided for them by their employers. So an employer might, for example, provide one conservative option and five more speculative ones, on the grounds that conservative investments are basically all alike, but that people should be able to choose their own risks. A typical employee, putting a sixth of her retirement in each fund, might have no idea that she has made an extremely high-risk decision, with 83 percent of her money tied to the perturbations of the stock market.

  You might think that if people can be so inattentive to something as important as retirement, they deserve what they get. The employer is doing right by them, but they aren’t doing right by themselves. There is certainly something to be said for this view, but my point here is that the retirement decision is only one among very many important decisions. And most people may feel that they lack the expertise to make decisions about their money by themselves. Once again, new choices demand more extensive research and create more individual responsibility for failure.

  Choosing Medical Care

  A FEW WEEKS AGO MY WIFE WENT TO A NEW DOCTOR FOR HER annual physical. She had the checkup, and all was well. But as she walked home, she became increasingly upset at how perfunctory the whole exchange had been. No blood work. No breast exam. The doctor had listened to her heart, taken her blood pressure, arranged for a mammogram, and asked her if she had any complaints. That was about it. This didn’t seem like an annual physical to my wife, so she called the office to see whether there had been some misunderstanding about the purpose of her visit. She described what had transpired to the office manager, who proceeded to tell her that this doctor’s philosophy was to have her examinations guided by the desires of the patient. Aside from a few routine procedures, she had no standard protocol for physical exams. Each was a matter of negotiation between physician and patient. The office manager apologized that the doctor’s approach had not been made clear to my wife, and suggested a follow-up conversation between my wife and the doctor about what checkups would be like in the future.

  My wife was astonished. Going to the doctor—at least this doctor—was like going to the hairdresser. The client (patient) has to let the professional know what she wants out of each visit. The patient is in charge.

  Responsibility for medical care has landed on the shoulders of patients with a resounding thud. I don’t mean choice of doctors; we’ve always had that (if we aren’t among the nation’s poor), and with managed care, we surely have less of it than we had before. I mean
choice about what the doctors do. The tenor of medical practice has shifted from one in which the all-knowing, paternalistic doctor tells the patient what must be done—or just does it—to one in which the doctor arrays the possibilities before the patient, along with the likely plusses and minuses of each, and the patient makes a choice. The attitude was well described by physician and New Yorker contributor Atul Gawande:

  Only a decade ago, doctors made the decisions; patients did what they were told. Doctors did not consult patients about their desires and priorities, and routinely withheld information—sometimes crucial information, such as what drugs they were on, what treatments they were being given, and what their diagnosis was. Patients were even forbidden to look at their own medical records; it wasn’t their property, doctors said. They were regarded as children: too fragile and simpleminded to handle the truth, let alone make decisions. And they suffered for it.

  They suffered because some doctors were arrogant and/or careless. Also, they suffered because sometimes choosing the right course of action was not just a medical decision, but a decision involving other factors in a patient’s life—the patient’s network of family and friends, for example. Under these circumstances, surely the patient should be the one making the decision.

  According to Gawande, The Silent World of Doctor and Patient, by physician and ethicist Jay Katz (published in 1984), launched the transformation in medical practice that has brought us where we are today. And Gawande has no doubt that giving patients more responsibility for what their doctors do has greatly improved the quality of medical care they receive. But he also suggests that the shift in responsibility has gone too far:

  The new orthodoxy about patient autonomy has a hard time acknowledging an awkward truth: patients frequently don’t want the freedom that we’ve given them. That is, they’re glad to have their autonomy respected, but the exercise of that autonomy means being able to relinquish it.

  Gawande goes on to describe a family medical emergency in which his own newborn daughter Hunter stopped breathing. After some vigorous shaking started the little girl breathing again, Gawande and his wife rushed her to the hospital. His daughter’s breathing continued to be extremely labored, and the doctors on duty asked Gawande whether he wanted his daughter intubated. This was a decision that he wanted the doctors—people he had never met before—to make for him:

  The uncertainties were savage, and I could not bear the possibility of making the wrong call. Even if I made what I was sure was the right choice for her, I could not live with the guilt if something went wrong…I needed Hunter’s physicians to bear the responsibility: they could live with the consequences, good or bad.

  Gawande reports that research has shown that patients commonly prefer to have others make their decisions for them. Though as many as 65 percent of people surveyed say that if they were to get cancer, they would want to choose their own treatment, in fact, among people who do get cancer, only 12 percent actually want to do so. What patients really seem to want from their doctors, Gawande believes, is competence and kindness. Kindness of course includes respect for autonomy, but it does not treat autonomy as an inviolable end in itself.

  When it comes to medical treatment, patients see choice as both a blessing and a burden. And the burden falls primarily on women, who are typically the guardians not only of their own health, but that of their husbands and children. “It is an overwhelming task for women, and consumers in general, to be able to sort through the information they find and make decisions,” says Amy Allina, program director of the National Women’s Health Network. And what makes it overwhelming is not only that the decision is ours, but that the number of sources of information from which we are to make the decisions has exploded. It’s not just a matter of listening to your doctor lay out the options and making a choice. We now have encyclopedic lay-people’s guides to health, “better health” magazines, and, most dramatic of all, the Internet. So now the prospect of a medical decision has become everyone’s worst nightmare of a term paper assignment, with stakes infinitely higher than a grade in a course.

  And beyond the sources of information about mainstream medical practices to which we can now turn, there is an increasing array of nontraditional practices—herbs, vitamins, diets, acupuncture, copper bracelets, and so on. In 1997, Americans spent about $27 billion on nontraditional remedies, most of them unproven. Every day, these practices become less and less fringy, more and more regarded as reasonable options to be considered. The combination of decision autonomy and a proliferation of treatment possibilities places an incredible burden on every person in a high-stakes area of decision making that did not exist twenty years ago.

  The latest indication of the shift in responsibility for medical decisions from doctor to patient is the widespread advertising of prescription drugs that exploded onto the scene after various federal restrictions on such ads were lifted in 1997. Ask yourself what is the point of advertising prescription drugs (antidepressant, anti-inflammatory, antiallergy, diet, ulcer—you name it) on prime-time television. We can’t just go to the drugstore and buy them. The doctor must prescribe them. So why are drug companies investing big money to reach us, the consumers, directly? Clearly they hope and expect we will notice their products and demand that our doctors write the prescriptions. The doctors are now merely instruments for the execution of our decisions.

  Choosing Beauty

  WHAT DO YOU WANT TO LOOK LIKE? THANKS TO THE OPTIONS MODERN surgery provides, we can now transform our bodies and our facial features. In 1999, over 1 million cosmetic surgical procedures were done on Americans—230,000 liposuctions, 165,000 breast augmentations, 140,000 eyelid surgeries, 73,000 face-lifts, and 55,000 tummy tucks. Though it is mostly (89 percent) women who avail themselves of these procedures, men do it too. “We think of it like getting your nails done or going to a spa,” says a spokesman for the American Society of Plastic Surgeons. Another says that going under the knife is no different “from putting a nice sweater on, or combing your hair, or doing your nails, or having a little tan.” In other words, cosmetic surgery is slowly shifting from being a procedure that people gossip about to being a commonplace tool for self-improvement. To the extent that this is true, fundamental aspects of appearance become a matter of choice. How people look is yet another thing that they are now responsible for deciding for themselves. As journalist Wendy Kaminer puts it, “Beauty used to be a gift bestowed upon the few for the rest of us to admire. Today it’s an achievement, and homeliness is not just misfortune but a failure.”

  Choosing How to Work

  THROUGHOUT ITS HISTORY, THE UNITED STATES HAS TAKEN PRIDE IN the social mobility afforded to its citizens, and justly so. Some two-thirds of American high-school graduates attend college. A degree then opens up a wide variety of employment opportunities. What kind of work Americans choose to do is remarkably unconstrained either by what their parents did before them or by what kind of work is available where they grew up. I know that employment prospects and possibilities are not equally available to everyone in America. Family finances and national economic trends impose serious constraints on many. But not as many as in the past.

  After people choose a career path, new choices face them. The telecommunications revolution has created enormous flexibility about when and where many people can work. Companies are slowly, if reluctantly, accepting the idea that many people can do their jobs productively from home, spared interruptions and unnecessary oversight. And once people are in the position to be able to work at any time from any place, they face decisions every minute of every day about whether or not to be working. E-mail is just a modem away. Should we check it before we go to bed? Should we bring our laptop along on our vacation? Should we dial into the office voice-mail system with our cell phone and check for messages while waiting between courses at the restaurant? For people in many occupations, there are few obstacles standing in the way of working all the time. And this means that whether or not we work has become a matt
er of hour-by-hour, minute-by-minute choice.

  And whom do we work for? Here, too, it seems that every day we face a choice. The average American thirty-two-year-old has already worked for nine different companies. In an article a few years ago about the increasingly peripatetic American work force, U.S. News and World Report estimated that 17 million Americans would voluntarily leave their jobs in 1999 to take other employment. People switch jobs to get big raises and to pursue opportunities for advancement. They switch jobs because they want to live in a different city. They switch jobs because they’re bored. Indeed, job-switching has become so natural that individuals who have worked for the same employer for five years are regarded with suspicion. No longer are they seen as loyal; instead, their desirability or ambition is called into question—at least when times are good and jobs are plentiful. When times are harder, as they are right now, there will obviously be much less job switching than there was in 1999. But people will still be looking.

  When should you start looking for a new job? The answer seems to be that you start looking the day you begin your current job. Think for a moment about what this means to each of us as decision makers. It means that the questions “Where should I work?” and “What kind of work should I do?” are never resolved. Nothing is ever settled. The antennae for new and better opportunities are always active. The Microsoft ad that asks us “Where do you want to go today?” is not just about web surfing.