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Gay Pride Parade Credit: Maegan Cadet , Christina Prudencio

Contrary to popular belief, the Colonial Penn Center is more than just a mysterious antique building on Locust Walk.

Located next to the Penn Women’s Center, the building houses the Leonard Davis Institute of Health Economics, a research program which was established in 1967 — two years after the installment of Medicare. A joint effort between Penn faculty and staff, the LDI conducts research on the American health care system.

LDI Executive Director Dr. David Asch said the primary mission of the Institute includes facilitating research of the organization and financing of health care, as well as creating educational programs and informing policy makers of the scholarly work LDI provides.

The Institute sponsors a number of research programs, including the Center for Health Incentives and Behavioral Economics and the Center for Health Research and Promotion.

One of the projects led by members of the LDI is a study on global health headed by Dr. Alison Buttenheim. An LDI senior fellow and assistant professor at the School of Nursing, Buttenheim is focusing her research on how to use behavioral economics to improve child health worldwide.

Buttenheim explained that behavioral economics is a relatively new field that studies the effects of social, cognitive and emotional factors on an individual’s decisions.

“Behavioral economics is great in using irrationality patterns to help convince us to lose weight, exercise, take our medicines,” Asch said.

In a study, Buttenheim found that using a reward system to incentivize mothers to immunize their children from disease was an effective way of encouraging healthy behaviors. As a result, Buttenheim believes the current health care system’s funding methods should be reformed.

However, she added that “it will take more than funding to reduce maternal and child mortality around the world.” Rather, she believes “creating social norms and reward incentives to change behavior is the future of healthcare.”

Asch believes that the LDI’s studies reflect its influence on the field of health care economics. “Organized medicine and industry more than ever look at LDI research as critical to their work,” he said.

In addition, the LDI brings together faculty and students from different Penn schools to collaborate on research projects. “It became a university enterprise which gathered the whole university together,” he said. “It is really valuable to have someone from Wharton work with someone from Nursing and most other university don’t have that.”

2012 Nursing and Wharton graduate Michelle Lu believes the LDI’s work is especially important given the current national debate over the future of health care. “With so many parts of health care that are constantly interacting with each other, and changing everyday, it’s really vital to understand health care from an economic perspective,” she said.

Lu added that the field is extremely relevant to college-age students. “There are a number of health care challenges in the future,” she said. “From a political perspective, the current United States health system is unsustainable, yet there seems to be very little agreement on how to fix this problem.”

For Asch, however, the work of LDI is key to providing solutions to these problems. Stepping down after 14 years as executive director, Asch said he looks forward to the new leadership of the Institute, adding that “it’s been a great ride.”

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