Money for Nothing?

Came across this blog entry on Technorati, which discusses this study on the differences between public and private sector doctors in India.

I’m not sure how seriously to take a study titled “Money for Nothing - The Dire Straits of Medical Practice in Delhi, India”, but it seems like a topic worth looking at.

From the abstract:

First, what doctors do is less than what they know they should do - doctors operate well inside their knowledge frontier.

Second, competence and effort are complementary so that doctors who know more also do more.

Third, the gap between what doctors do and what they know responds to incentives: Doctors in the fee-for-service private sector are closer in practice to their knowledge frontier than those in the fixed-salary public sector. Under-qualified private sector doctors, even though they know less, provide better care on average than their better-qualified counterparts in the public sector.

These results indicate that to improve medical services, at least for poor people, there should be greater emphasis on changing the incentives of public providers rather than increasing provider competence through training.


Interesting. The scientific circle often goes to elaborate lengths to conclude something that seems self-evident.

The study seems to suggest that care (note that I say care, not service) in the private sector is better than that in the public sector. I wonder if the same can be said of the local healthcare system.

Firstly, do all doctors practise inside their knowledge frontier? Certainly in the public sector the doctors are under closer watch, although I have heard of a doctor being reprimanded for introducing unproven therapy in a major restructured hospital. But what about the private sector?

Secondly, while doctors in the private sector will try harder to please the patient, but that is not to say that the quality of care given is necessarily higher. Again, without any audit, the doctors may simply end up just trying to please patients rather than to provide them the best care. This state of affairs is possible because patients cannot and sometimes do not want to know the difference between good service and good care.

Conversely, doctors in hospitals and polyclinics are audited and their performance indices monitored. Being on fixed pay plus performance bonus, the incentive here seems to be pleasing the paymasters rather than the patients.

I don’t think one can say that fees correlate well with quality of care in the local healthcare system, or that it doesn’t, but I would certainly be interested to see a study done.