Information and Incentives
By Arnold Kling
Today, in many corners of even our most significant federal payment systems, we still pay clinicians and facilities for activity, not for the quality of the job they did for the patient.
…The federal government should start the mapmaking by commissioning a detailed, three-month analysis of the nation’s leading hospitals to fully document not only the cost of errors but also the wasted time, effort and resources embedded in much of health care delivery. Such a study could be accomplished for $10 million and would make the case for change in a management framework that couldn’t be ignored. The team of experienced industrial engineers and health care leaders I work with in Pittsburgh has yet to encounter a health care process that could not provide higher quality at half the current cost.
The second comment points to lack of information as a reason for underperformance in health care. The first comment points to bad incentives.
Personally, I would place my bets on incentives as the culprit. You get what you pay for. In health care, we reimburse providers for procedures, regardless of outcomes. Doctors and hospitals rarely are put out of business for being inefficient of substandard in quality.
My guess is that if competition in medicine were more rigorous, the market would discover the information needed to institute best practices. But information in the absence of competition will not produce real learning.
For Discussion. If a study found the most efficient and effective ways to deliver health care, what factors would inhibit adoption of best practices?