Knowledge Expansion

Paper or plastic: A look into how decisions are truly made

Insight Article

Leadership Development

Frank Cohen MBB, MPA
Editor’s note: This article is adapted from Frank Cohen’s recent book, Don’t Do Something, Just Stand There: A Primer for Evidence-based Practice.



My work requires me to come up with effective decisions derived from complex information, but it’s the simple decisions that seem to knock me for a loop.

Given the requisite data for a post-audit extrapolation assessment, I can usually come up with a successful challenge within a few hours of analysis. But when I get to the checkout at the local grocery store and they ask me if I want paper or plastic, I curl up into a fetal ball and begin to mumble. I can’t decide because I have never taken the time to assess the differences between the two.

There are many considerations:
  • Environmental (paper degrades, plastic does not)
  • Value (paper is more expensive)
  • Reuse (plastic will last longer)
  • Utility (which will hold and transport groceries better).

It is my opinion that, in general, people overestimate both the complexity of decision-making and their ability to make good decisions.

What is a decision, anyway? It is a conclusion we draw upon to take some action. One of the greatest fallacies about decision-making is that there are some people who have a natural ability to make decisions. People who tend to make good decisions on a regular basis have a strong background of experiential learning often paired with formal training in decision modeling — not through natural ability. Contrary to popular belief, decisions are rarely made on the spot; rather, they are made based on accumulated information collected over time. For example, a manager who might make what appears to be an on-the-spot decision about an issue likely has been exposed to that issue before and had the opportunity to review data and evidence as it pertains to that issue.

The average adult makes about 35,000 remotely conscious decisions each day.1 This is important to understand because we often see decision-making as a cognitive process, which is not always the case. In making decisions, we are rarely faced with only one viable option. In fact, good decision-making is the ability to cognitively select between a series of alternatives. The goal is to pick the best alternative and be able to defend why you made that choice. I often must defend my decisions in front of a judge or jury.

A simple example is setting your alarm clock. The decision about what time to set it for originated at least the night before, so this decision spans a greater amount of time. The alarm goes off, and you have a decision to make. Do you turn it off and get up, or turn it off and go back to sleep? Maybe you hit the snooze button. What data and information goes into making this simple decision? Is it a workday? Can you afford to take a day off? If you hit the snooze button, will that make you late? Or maybe you’ll get a few more minutes of sleep, but you won’t be able to get a cup of coffee or make breakfast. What about breakfast? What information do you need to make that decision? If each of these decision points were totally cognitive — meaning you calculated each one consciously — you would never get anything done. At some point, we are subject to decision fatigue.

The University of Massachusetts Dartmouth has compiled a seven-step decision-making process. It goes like this:
  1. Identify the decision
  2. Gather relevant information
  3. Identify alternatives
  4. Weigh the evidence
  5. Choose among alternatives
  6. Take action
  7. Review your decision.

Identify the decision and gather relevant information

Do we even need to make a decision? If so, what is the purpose and the nature of the decision to be made? Next, we need to collect information that is relevant to our decision. This step is often harder than it seems. Today, there is often too much information and sorting through it to separate useful from worthless is difficult.

In contract theory, this asymmetry of information occurs when one person or party has more or better information than another person or party. This happens quite often when we visit the vendor hall at a conference. There may be a dozen vendors there selling EHR applications or practice management systems. Each of those vendors is going to have data and other information that prove they are the best. But logically, we know that not everyone can be the best.

If we are serious about the decisions we are going to make, such as spending a fortune on an EHR, we must be committed to doing research beyond what the vendor is willing to give us.

Identify alternatives

If you encounter long appointment lead times for patients, there are several alternatives for solving the problem. We could address the no-show issue, or we could hire another provider. We might even consider increasing the physical space or converting nontreatment rooms into treatment rooms. In any case, management’s decision is going to entail assessing alternatives.

Weigh the evidence

Much of how we measure the success and outcomes of our decisions will be based on the quality of the data and evidence we consider.

In general, approach the situation with a null hypothesis. In statistics, null hypotheses usually state that sample observations or data result purely from chance. In a criminal trial, the null hypothesis is that the person is not guilty. It is rare to have enough evidence to clearly state that a person is innocent, only a lack of evidence to say that the person is guilty. The same is true for the decisions we make. We rarely have enough information to determine that this is the correct decision; rather, it’s the least incorrect decision based on the available evidence. So, in our example of appointment lag time, the null hypothesis is a result of chance occurrence. The alternate hypothesis might be that it is a result of a high no-show rate. The purpose of examining the evidence is to determine whether we reject that null hypothesis. We either have enough evidence to say that it’s not true, or we don’t have enough evidence to say that it is not true. Rarely do we have enough evidence to say that it is 100% true.

Choose among alternatives, take action and review your decision

Once we have weighed the evidence, we can look at the alternatives and determine which one we want to take. For example, let’s say that we have an issue with excessive wait time before a patient sees the doctor. This might be due to several reasons. It could be that the doctor comes in late. Or it could be that patients are sicker than average. It might also be that patients come in for their appointment too early, which adds waiting time outside the scope of their appointment time. It could be that it’s due to patient age and their inability to arrive on time, or due to an unusual mix of new patients versus established patients. In some cases, it may be that the new patient intake process is longer than it should be.

We are setting out several different hypotheses, with the null hypothesis being that excessive waiting time occurs as a matter of chance. We examine the evidence and our goal. Rather than finding the correct alternative, we may be able to eliminate the incorrect alternatives as a more efficient way to solve our problem.

To do this, we would conduct a study. First, we might take a 30-day sample to calculate the actual waiting time. If we do this correctly, we would be able to stratify by time of day, day of week, age of patient, status as new or established patient and even by provider. By doing so, we would be able to eliminate those alternatives not supported by the evidence. What we are left with is the probable cause. So, we choose among our alternatives and act to correct the problem.

Finally, we want to review our decision to either validate or invalidate the outcomes of our decision.

How are decisions really made?

These seven steps represent an accepted formal decision-making process. But how are decisions really made, particularly at the enterprise or organizational level? Many of us make decisions based on intuition. It feels right so it must be right — and we all have stories about how that model failed us. We make decisions based on emotion. My dad always told me not to make a decision when I was hungry, angry, lonely or tired. He felt doing so would introduce individual decision biases that could lead to a bad decision.

We also make decisions based on our personal survival. In some situations, employees would attempt to sabotage a management decision to save their own skin. While I understand why someone might do this, it does not lend itself toward positive outcomes.

On the positive side, we often base our decisions on prior experience. While this is not all bad, an experience may not necessarily correlate to our current situation. Although the problems may look the same, there may be different root causes, and cause and effect is a critical part of decision-making. Most of our decisions are based on what’s mentioned above. Instead of basing our decisions on these considerations, our decision-making should be based on unbounded rationality, which favors logic, analysis, evidence and objectivity over the subjectivity, intuition and anecdote of bounded rationality.

The idea of bounded rationality encroaches on every aspect of our lives. A good example of this occurred during an election in Florida. Not only did we have an election for governor, senator and several congressional positions, but there were also 13 state amendments on the ballot. While most people had enough information to make an educated decision about voting for governor, senator or maybe even Congress, very few had the information necessary to make an educated decision about the amendments that appeared on local ballots — but they voted for them anyway. Unfortunately, we are making decisions — voting on issues that may have a significant impact on our lives — with only a limited knowledge of all the options available.

We need to recognize that any information we don’t generate ourselves comes from someone else, such as vendors, the government, research organizations, etc. We also need to recognize that purveyors of information usually have an incentive to use the information under their control to try to influence our decisions. The most effective solution to this problem is to recognize that this condition exists. In that way, even though the information we receive is quite asymmetrical, we can — as the U.S. Marines say — “improvise, adapt, overcome.”

Note:

  1. Sahakian BJ, Labuzetta JN. Bad moves: How decision making goes wrong, and the ethics of smart drugs. 2013. Oxford, U.K.: Oxford University Press.

About the Author

Frank Cohen
Frank Cohen MBB, MPA
Director, Analytics Doctors Management LLC Knoxville, Tenn.
Loading...