Thursday, January 16, 2014

The ways capitalism corrupts healthcare and education

I remember a couple of things from my social policy class at the LSE: Firstly, private provision of healthcare was acceptable as long as health insurance was offered by a public institution to ensure universal coverage. Secondly, charging tuition fees for higher education and giving student loans to those in need was a more equitable option than free education for all, because then university students, who come from disproportionately middle-class backgrounds, would be going to university with everyone's tax money. Theoretically all this sounds reasonable.

However, recently I have been observing from my own life that the mere provision of healthcare and education by private institutions is leading to undesirable consequances. Leaving aside the stars in their fields, doctors and academics are viewed as and incentivized to behave like factors of production. This is not only true for private institutions, but also public institutions, where these values have been prevalent.

In healthcare, "performance indicators," which apparently range from number of patients seen to various tests prescribed to actual surgical procedures undertaken, may lead doctors to prioritize quantity over quality. Apparently, doctors in private hospitals like to prescribe redundant tests and may even go as far as performing an unnecessary surgery, and they are more likely to do that if you have private insurance. I experienced this first hand when my former doctor in Fulya Acibadem Hospital insisted that I undergo a second, more extensive test when a simple medical test gave inconclusive results. I took the first test twice more with a different doctor and got negative results both times, but the process created anxiety on my part, and had I taken the second test, it would have costed my insurance company a lot of money.

Capitalism also corrupts private education. In private universities, academics feel the need to align their behavior with their perception of the students' wishes, as if students were customers. I am again speaking form first-hand experience, having co-taught an elective in the executive MBA programme of a private university for a semester now. The pressure starts in the first class, because it is the add/drop period and your class will only open if a certain number of students pick it. Then, through the course of the term, students will fill feedback forms about you and you generally want to avoid problems while maximizing positive feedback. In my experience, students should feel as if they are understanding and learning something during class, hence the material should not be too difficult, and they shouldn't be questioned too harshly about it. They like to see the lecturer hard at work, because they paid for it, but they also want to get good grades in the end. The academic has to play along because his popularity will determine whether he will be able to teach in the next semester.

I think the problem with both healthcare and education is an information mismatch between the provider and the customer. In both cases, customers don't know what they don't know, and this leaves them vulnerable to abuse, and the performance indicators make this abuse more likely. Alternative performance indicators should be developed - in healthcare, for example, the correlation between the tests prescribed and their outcomes can be monitored to determine whether these tests were prescibed for good reason. More generally, patient recovery and loyalty trends can be monitored to determine doctors' performance. Of course these indicators would not be directly related to the revenue of the hospital, but they would give a far more meaningful signal regarding the quality of the healthcare service.

For universities, I suggest an even more ambitious indicator, which involves sending out questionnaires to alumni, asking whether they remember anything useful from a specific lecture, and whether they put anything they have learned in this lecture to practical use. Of course, such questionnaires may also ask the alumni how they are doing more generally - has their degree translated into an increase in their income, a promotion, or an increase in their job satisfaction?

Or was it just a feel-good year or two that left them unprepared for the challenges lying ahead? This is a worthwhile question.

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