Behavioral economics have provided various insights to decision making problems for the last decades. In this article, I briefly introduce a few of the researches that are applied or applicable to healthcare and clinical decision making problems. In the last section, I also highlight the ideas of Nudge for behavior changes. The topics include the probability weighting and the S-shaped value function in Prospect Theory, the ambiguity aversion, and the cognitive biases such as framing effect, confirmation biases, and overconfidence.

The decision makings under uncertainty have been thoroughly researched and analyzed by formal models. At the same time, there have been many reported anomalies or "irrational behaviors" in the literature, which simply contract with those formal models. To incorporate the irrational behaviors, the researchers have also developed and modified the existing models. The Prospect Theory is definitely one of the most successful modifications. It is consist of two main components, the probability weighting function and the S-shaped value function. These functions combined together offer the broader framework that can explain several well-known anomalies, and they enable us to analyze the source of the irrationality in the clinical decision makings.

The psychology researches identify numerous forms of cognitive biases. We must be aware of those systematic tendencies of biases within our own decision makings, before we start debates over whether some decisions are rational or irrational, whether they are justifiable or not, and whether they are correct or wrong. Although it is still difficult for us to correct our unconscious biases at the site, it is important to understand the tendency of cognitive biases to prevent us from repeating any similar mistakes, if any, in the future. For this purpose, I select confirmation bias and overconfidence to write about.

Lastly, the concept of "nudge" is highlighted. A nudge is a behavioral science oriented method of guidance toward behavior changes. For instance, when an authority wants to make people do vaccinations, it can request or require them to do so, or subside for vaccinations. Instead, a simple letter that asks people to decide when to take the vaccination successfully worked. While requests, requirements and subsidies are active and explicit interventions, the nudge is rather passive and implicit and it is effective, too. There are varieties of nudges that are applicable to healthcare. I introduce a couple of examples to show the great potential of nudges in this field.

The purpose of this paper is to clarify the effects of incentive policies, including general name prescriptions im­plemented in 2012 for the Japanese antihypertensive market. The following three points were revealed through this analysis. (1) Incentive policies in 2012 increased the usage of generic drugs by 7.7%, with expanded use of generic drugs at hospitals and clinics in particular. (2) Analysis by prefecture revealed geographical differences in terms of not only the use of generic drugs but also the effects of the policy. A positive correlation had observed between the effects of the policy and the use of generic drugs in the past; namely, in areas where generic drugs had been used proactively in or before 2012, the policy tended to have a greater impact. (3) Considering differences in patient attributes at the time of switching from brand name drugs to generic drugs, there was a decrease of slightly more than 1 % in drug costs (approximately 12 billion yen/year) that would have been spent in the entire antihypertensive drug market. This was a more than 30% higher reduction in cost compared with not taking differences in patient attributes into account. This result suggests the importance of considering differences in patient attributes when estimating financial effects. Furthermore, the additional expenditures incurred by implementing incentive policies in 2012 are estimated to be 3.0 billion yen, making it clear that a substantial saving of 8.8 billion yen was achieved through incentive policies.