Sunk Costs

Sunk Costs in Medical Decisions

Every day, medical practitioners are faced with making decisions where no clearly right or wrong answers exist. These decisions frequently involve weighing evidence in evaluating competing hypotheses, estimating probabilities, and predicting uncertain outcomes—for example, which test should be ordered to confirm or eliminate a particular diagnosis; should a patient continue with a given medication or switch to an alternative one; do the signs [Page 1098]and symptoms presented indicate Disease A, Disease B, or no disease at all? Research has shown that in making these sorts of decisions, physicians behave in a manner very similar to that of expert decision makers in other domains (e.g., physics, logic, chess); that is to say, rather than using time- and labor-intensive computational procedures, they rely on rules of thumb or heuristics. In doing so, they are able to apply a wealth of accumulated knowledge relatively quickly and efficiently. These heuristics are generally an effective way of allocating limited cognitive resources in dealing with uncertain situations, but they can also introduce reasoning biases that adversely affect a decision. The sunk-cost effect is one example of how heuristics can lead to biased decisions in medical decision making.

This effect has been studied extensively in the fields of economics and behavioral decision making, where numerous studies show that decision makers' commitment to a decision increases as a function of the amount of their initial investment, in money, effort, or time. A number of variables can affect individuals' susceptibility to the sunk-cost effect, including personality. Of particular relevance to medical decision making, individuals with a Type A personality—a disposition shared by many physicians—are more likely to demonstrate the effect. In medical decision making, the sunk-cost effect can have important diagnostic or therapeutic implications on an individual-patient level and perhaps even on a national level when looking at the system of delivering medical care.