This post is part of the series: The Debriefing. Click to read all posts in this series.
Suppose that five years from today, you would receive an extremely large windfall. The exact number isn’t important, but let’s just say it’s large enough that you’ll have to budget things again. Not technically infinite, because that would break everything, but for the purposes of one person, basically undepletable. Let’s also assume that this money becomes yours in such a way that it can’t be taxed or swindled in getting it. This is also an alternate universe where inheritance and estates don’t exist, so there’s no scheming among family, and no point in considering them in your plans. Just roll with it.
No one else knows about it, so you can’t borrow against it, nor is anyone going to treat you differently until you have the money. You still have to be alive in five years to collect and enjoy your fortune. Freak accidents can still happen, and you can still go bankrupt in the interim, or get thrown in prison, or whatever, but as long as you’re around to cash the check five years from today, you’re in the money.
How would this change your behavior in the interim? How would your priorities change from what they are?
Well, first of all, you’re probably not going to invest in retirement, or long term savings in general. After all, you won’t need to. In fact, further saving would be foolish. You’re not going to need that extra drop in the bucket, which means saving it would be wasting it. You’re legitimately economically better off living the high life and enjoying yourself as much as possible without putting yourself in such severe financial jeopardy that you would be increasing your chances of being unable to collect your money.
If this seems insane, it’s important to remember here, that your lifestyle and enjoyment are quantifiable economic factors (the keyword is “utility”) that weigh against the (relative and ultimately arbitrary) value of your money. This is the whole reason why people buy stuff they don’t strictly need to survive, and why rich people spend more money than poor people, despite not being physiologically different. Because any money you save is basically worthless, and your happiness still has value, buying happiness, expensive and temporary though it may be, is always the economically rational choice.
This is tied to an important economic concept known as Moral Hazard, a condition where the normal risks and costs involved in a decision fail to apply, encouraging riskier behavior. I’m stretching the idea a little bit here, since it usually refers to more direct situations. For example, if I have a credit card that my parents pay for to use “for emergencies”, and I know I’m never going to see the bill, because my parents care more about our family’s credit score than most anything I would think to buy, then that’s a moral hazard. I have very little incentive to do the “right” thing, and a lot of incentive to do whatever I please.
There are examples in macroeconomics as well. For example, many say that large corporations in the United States are caught in a moral hazard problem, because they know that they are “too big to fail”, and will be bailed out by the government if they get in to serious trouble. As a result, these companies may be encouraged to make riskier decisions, knowing that any profits will be massive, and any losses will be passed along.
In any case, the idea is there. When the consequences of a risky decision become uncoupled from the reward, it can be no surprise when rational actors take more riskier decisions. If you know that in five years you’re going to be basically immune to any hardship, you’re probably not going to prepare for the long term.
Now let’s take a different example. Suppose you’re rushed to the hospital after a heart attack, and diagnosed with a heart condition. The condition is minor for now, but could get worse without treatment, and will get worse as you age regardless.
The bad news is, in order to avoid having more heart attacks, and possible secondary circulatory and organ problems, you’re going to need to follow a very strict regimen, including a draconian diet, a daily exercise routine, and a series of regular injections and blood tests.
The good news, your doctor informs you, is that the scientists, who have been tucked away in their labs and getting millions in yearly funding, are closing in on a cure. In fact, there’s already a new drug that’s worked really well in mice. A researcher giving a talk at a major conference recently showed a slide of a timeline that estimated FDA approval in no more than five years. Once you’re cured, assuming everything works as advertised, you won’t have to go through the laborious process of treatment.
The cure drug won’t help if you die of a heart attack before then, and it won’t fix any problems with your other organs if your heart gets bad enough that it can’t supply them with blood, but otherwise it will be a complete cure, as though you were never diagnosed in the first place. The nurse discharging you tells you that since most organ failure doesn’t appear until patients have been going for at least a decade, so long as you can avoid dying for half that long, you’ll be fine.
So, how are you going to treat this new chronic and life threatening disease? Maybe you will be the diligent, model patient, always deferring to the most conservative and risk averse in the medical literature, certainly hopeful for a cure, but not willing to bet your life on a grad student’s hypothesis. Or maybe, knowing nothing else on the subject, you will trust what your doctor told you, and your first impression of the disease, getting by with only as much invasive treatment as you can get away with to avoid dying and being called out by your medical team for being “noncompliant” (referred to in chronic illness circles in hushed tones as “the n-word”).
If the cure does come in five years, as happens only in stories and fantasies, then either way, you’ll be set. The second version of you might be a bit happier from having more fully sucked the marrow out of life. It’s also possible that the second version would have also had to endure another (probably non-fatal) heart attack or two, and dealt with more day to day symptoms like fatigue, pains, and poor circulation. But you never would have really lost anything for being the n-word.
On the other hand, if by the time five years have elapsed, the drug hasn’t gotten approval, or quite possibly, hasn’t gotten close after the researchers discovered that curing a disease in mice didn’t also solve it in humans, then the difference between the two versions of you are going to start to compound. It may not even be noticeable after five years. But after ten, twenty, thirty years, the second version of you is going to be worse for wear. You might not be dead. But there’s a much higher chance you’re going to have had several more heart attacks, and possibly other problems as well.
This is a case of moral hazard, plain and simple, and it does appear in the attitudes of patients with chronic conditions that require constant treatment. The fact that, in this case, the perception of a lack of risk and consequences is a complete fantasy is not relevant. All risk analyses depend on the information that is given and available, not on whatever the actual facts may be. We know that the patient’s decision is ultimately misguided because we know the information they are being given is false, or at least, misleading, and because our detached perspective allows us to take a dispassionate view of the situation.
The patient does not have this information or perspective. In all probability, they are starting out scared and confused, and want nothing more than to return to their previous normal life with as few interruptions as possible. The information and advice they were given, from a medical team that they trust, and possibly have no practical way of fact checking, has led them to believe that they do not particularly need to be strict about their new regimen, because there will not be time for long term consequences to catch up.
The medical team may earnestly believe this. It is the same problem one level up; the only difference is, their information comes from pharmaceutical manufacturers, who have a marketing interest in keeping patients and doctors optimistic about upcoming products, and researchers, who may be unfamiliar with the hurdles in getting a breakthrough from the early lab discoveries to a consumer-available product, and whose funding is dependent on drumming up public support through hype.
The patient is also complicit in this system that lies to them. Nobody wants to be told that their condition is incurable, and that they will be chronically sick until they die. No one wants to hear that their new diagnosis will either cause them to die early, or live long enough for their organs to fail, because even by adhering to the most rigid medical plan, the tools available simply cannot completely mimic the human body’s natural functions. Indeed, telling a patient that they will still suffer long term complications, whether in ten, twenty, or thirty years, almost regardless of their actions today, it can be argued, will have much the same effect as telling them that they will be healthy regardless.
Given the choice between two extremes, optimism is obviously the better policy. But this policy does have a tradeoff. It creates a moral hazard of hope. Ideally, we would be able to convey an optimistic perspective that also maintains an accurate view of the medical prognosis, and balances the need for bedside manner with incentivizing patients to take the best possible care of themselves. Obviously this is not an easy balance to strike, and the balance will vary from patient to patient. The happy-go-lucky might need to be brought down a peg or two with a reality check, while the nihilistic might need a spoonful of sugar to help the medicine go down. Finding this middle ground is not a task to be accomplished by a practitioner at a single visit, but a process to be achieved over the entire course of treatment, ideally with a diverse and well experienced team including mental health specialists.
In an effort to finish on a positive note, I will point out that this is already happening, or at least, is already starting to happen. As interdisciplinary medicine gains traction, patient mental health becomes more of a focus, and as patients with chronic conditions begin to live longer, more hospitals and practices are working harder to ensure that a positive and constructive mindset for self care is a priority, alongside educating patients on the actual logistics of self-care. Support is easier to find than ever, especially with organized patient conferences and events. This problem, much like the conditions that cause it, are chronic, but are manageable with effort.
