In Slate, Barry Schwartz and Kenneth Sharpe argue convincingly that viewing bad performance as an “incentive problem” (meaning bad financial incentives) can be a mistake. If you pay doctors per procedure, they will do more procedures (too many); if you pay them per person, they will do fewer procedures (not enough). The heart of their argument is this:
When day care centers fine parents who are late to pick up their kids, lateness increases. Why? Because the fine turns a moral obligation (come on time!) into a service for a fee (we’ll take care of the kids if you pay us more!). Another example: When Swiss citizens were offered an incentive for agreeing to have a toxic waste dump in their community, their willingness to accept it fell by half. Why? The offer of an incentive induces them to ask What’s in my interest? instead of What are my responsibilities as a citizen? And when people offer a stranger a token payment for help unloading a couch from a moving van, strangers are less likely to agree than if offered nothing. Why? Because the offer of money has turned the assistance from a favor into a job.
So far so good. At this point the authors get lost. Here’s their advice about fixing medicine:
It is tempting, in light of our argument, to ask how can we incentivize good medical practice, so that we get more of it. Our answer is simple but perhaps unsatisfying: Good medical practice should be, and can be, its own reward. Almost all doctors want to practice good medicine—at least before they get socialized by the grind of medical school, residency, student debt, malpractice premiums, and the like.
The sign of their lostness is that they have zero data to back up this idea.
In Systems of Survival, Jane Jacobs argued that we can see around us two systems of morality: a guardian system, which stresses loyalty and hierarchy, and a commercial syndrome, which stresses honesty and equality. Each is internally consistent; but they are quite different, and those familiar with one system have a hard time understanding the other. She had plenty of data supporting her points. She went on to say that when the two systems are mixed — when policemen are given ticket quotas (= when policemen are treated like salesmen), for example — things go bad.
Why two systems? Because they correspond to two broad ways of making a living: taking and trading. The systems aren’t arbitrary; they have survived because they worked.
Are doctors takers or traders? The flaw in trying to improve doctor performance by changing incentives is the balance of power: Doctors have almost all of it. Patients trust doctors. (When I asked my surgeon the basis for her judgment that I needed surgery — treating her as an equal, in other words — she must have been stunned. She certainly didn’t respond appropriately.) That’s why it’s so easy for doctors to do too much or too little. It’s the same problem with quota systems for policemen: The policemen have too much power. The current balance of power makes doctors takers rather than traders.
So the choice is: either reduce the power of doctors relative to patients or give them moral training as guardians. The first isn’t going to happen in medical schools. Jacobs would recommend, I think, that doctors should be taught that they are guardians. (She might use the example of her father, who was a doctor.) And that those interested in improving medicine should study well-functioning guardian systems to see how they work or worked — how the accompanying moral system was instilled.
Seth, you get a gold star for speaking up to your surgeon. Nearly all of such discussions about how-to-reform-health-care ignore the patient. It is just assumed that they are ignorant and stupid concerning their health and medical treatment. If that is a given, then it is just a question of whether the patient will be shafted by fee-for-service or shafted by fee-for-patient.
I largely agree with your analysis (and have used Jacob’s framework in thinking about this issue for years) AND with Schwartz and Sharpe. Though their recommendation is vague, it points weakly in the guardian direction. They don’t say how to do it, but the obvious solution is something along the lines of making doctors a type of professor, as their name implies, with tenure, legal protection from malpractice (risk of loss of tenure, not financial loss), and a professorial level salary and career path. They should be banned for providing medical services for pay, or rather, should lose tenure for some fairly long period and the right to call themselves a doctor of medicine plus malpractice insurance for doing so.
Pharmacists as well as MDs should be empowered to prescribe drugs, not on the basis of their own diagnosis, but on the basis of a diagnosis from an expert system plus a general confirmation that the patient is of sound mind etc and understands risks and interactions associated with the drug.
Tom, yeah, that’s a very good point about ignoring the patient in discussions about how to improve health care. Which basically means the discussion about health care is mainly among those who like the status quo. Nothing would be more subversive of the status quo than giving more power to patients.
I’m pretty optimistic that is status quo is changing and will change even more. Over time the balance of power of between doctor and patient will shift, or has started to shift, towards the patient. CureTogether is just one example.
This is another: https://sethroberts.org. If Seth’s theories are even modestly correct (eg Omega-3 improves gums), the balance of power between, say, periodontists and patients will shift greatly.
Another is my friend, a lawyer with no medical training, who after being diagnosed with a rare stomach condition undertook to learn all he could about it. Within about a month he knew as much or more about it than the doctors who were supposed to treat him for it.
The common denominator is the explosion in the quantity and accessibility of information made possible by the internet. Doctors tend to hate the internet because they say it’s full of crackpot theories. Which is true, but the solution is not less internet, but better filters of the information on it. Veblen might say doctors hate the internet because of the challenge it presents to their status.