Interesting article in JAMA (Journal of the American Medical Association) reviewing the effects of incentives (mostly financial) in medical decision making. They affect both patient and physician decision making and may be useful in getting additional value out of our non-system of health care.
There is ample evidence that physicians, who typically fulfill the criteria for being economically rational, are exquisitely sensitive to the incentives they face. Physicians tend to recommend tests and treatments that will provide them with financial benefit. For example, oncologists who are reimbursed based on the chemotherapy drugs they provide administer more of these drugs and concurrently, the more expensive drugs.1 On average, compared to physicians paid on a capitated basis, physicians paid for specific procedures tend to recommend more of those procedures.
Patients tend to face idiosyncratic health issues, get relatively little useful feedback about the quality of medical decisions, and often make decisions when sick and, as a result, in a heightened emotional state. Perhaps not surprisingly, therefore, the behavior of patients can be less than perfectly rational.
Medicynical Note: There is an opportunity here but I’m doubtful that there is enough support for the social engineering necessary to improve. For example, doctors are all for change until it affects their bottom line. Patients want limitless access to everything regardless of efficacy or cost. Both approaches lead to excessive costly medical interventions without quality improvement.
I guess we’ll see!?