Too Much of a Good Thing

Ever find yourself in the cereal aisle, staring blankly at the mosaic of options, your enthusiasm for the task waning with each passing second?

Everyone has heard (and experienced) the phenomenon of being overwhelmed by choice.  Now, a new study, published in Health Affairs and conducted by Harvard Medical School appears to show that as the number of Medicare Advantage plans exceeds a certain threshold in a market, participation in the program actually decreases.  This study has much in common with what has become known as The Paradox of Choice: too many choices overwhelm our brains and lead to indecision— ultimately restricting us instead of freeing us.  Thus, after a certain point, more choice means less freedom.   As reported in Medical News Today:

The researchers gathered data on 21,815 enrollment decisions from 2004 to 2007 that 6,672 participants had made. They compared enrollment decisions made by participants with varying cognition levels, as well as types of plans offered in their areas.

They found that as long as the number of plan options being offered was fewer than 15, a rise in the number of plans resulted in an increase in Medicare Advantage enrollment. However, when there were over 30 options the number of enrollments actually dropped – this was the case in 25% of US counties. [emphasis added]

There is more interesting stuff in the study, including the impact of choice on members with varying levels of cognitive functioning.  For more on the Paradox of Choice, listen to Barry Schwartz fascinating TED talk from 2006.  A pre-emptive political point: Note that his quibble is with the way we promote more “freedom,” not “freedom itself.