Economics - General

More Expensive Placebos Bring More Pain Relief

Why do placebo’s work?  They work because the patient’s mind believes they offer relief and thus patient perception of pain decreases after taking a placebo.  A study by Dan Ariely finds that the more expensive the placebo, the more pain relief it offers.  In particular, a $2.50 placebo works better one that costs 10 cents.

Medical News reports the following:

With pain, Dr. Ariely said, “if you expect it to be worse, it could be worse. So what can we do in the marketplace so people don’t expect it to be worse?”  For instance, he added, poor people are often offered medicines at a discount. “Maybe we don’t want to advertise that it’s discounted,” he said.

One reason that more expensive medical treatments when work better in practice in randomized trials is that patients believe that these treatments will be the most beneficial. Further, treatments that patients perceive to be “high tech” or using big fancy machines may offer better health outcomes due to patient perspectives.

The question is, should physicians lie to patients and tell them that the treatment is expensive or cutting edge when in fact it is not?  Without even considering the moral implications of this strategy, the answer is no.  Although this strategy could be used intermittently to reduce cost and improve patient outcomes, if patients found out that physicians were lying to them about the technical sophistical or price of the treatment, then the pronouncements that a treatment was cutting edge would have much less of an effect on the patient (since they knew it was false).

Thus, knowing that high priced medicine improves outcomes still many not give the medical community an attractive means to improve quality and reduce cost.


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