Saints and Suckers

There are no saints or virtuous people in the Tragic Commons. In the Tragic Commons, there are only suckers and fools.

In the Tragic Commons, each cowboy always reasons that it’s in his interest to graze more cows there. Nobody pays any attention to the damage the collectively growing herds are wreaking on the resource. Though each cowboy can see the destruction that all of the cows are causing, no one individually is disposed to do anything about it. Were a virtuous cowboy to notice that together, the cowboys are collectively being fools and then, to decide unilaterally to cut the size of his herd, the other cowboys would call him a sucker. By reducing the size of his herd, the virtuous cowboy only reduces his own wealth; the other cowboys just mosey on in and start using the capacity the virtuous cowboy had abandoned. The Tragic Commons has not been preserved.

The virtuous cowboy sees this, so he tries to organize his neighbors to work, collectively to preserve the Tragic Commons. It’s a fine plan, except for three things. Suppose the cowboys can’t decide how to divide up the resource. Or, suppose that the cowboys do decide on how to divvy things up, but somebody cheats. Or, what if, after the cowboys have come to agreement, somebody new wants to use the Tragic Commons.

If you tire of the methane-filled bovine atmosphere, we can transform it. Consider the case of Dr. Tom Goodman who specializes in emergency medicine in Silver Spring, Maryland (the names have been changed to protect the virtuous). Dr. Goodman has been in practice for over 20 years and, over the years, he’s seen a great number of changes in medical practice. “Appendicitis,” he says, “used to be diagnosed by physical exam. . . now no surgeon will take a patient without a CT scan even in the most obvious cases.” Dr. Goodman notes that because it uses radiation, the CT scan “will increase cancer rates by 1% in the future.” That may not seem like a big percentage, but in a population like ours, with 300,000,000 people, an increase of 1% in the cancer rate means 3 million more people will get cancer because of unnecessary CT scans.

Dr. Goodman is annoyed by the way the system compensates the doctors involved. It will take only five minutes for the radiologist to interpret the results of the useless CT scan, and for that, the radiologist will earn $1,000.00; the surgeon who removes the ruptured appendix and provides the post-operative care will get only $300.00. He’s disturbed by the fact that the CT scan has not materially improved patient care over what was being provided in 1996 and that we’ve increased the patient’s cancer risk for no reason other than a marginal increase in the potential accuracy of the diagnosis. Read that as covering the surgeon’s rump, which he doesn’t want roasted in a malpractice suit if something goes wrong.

So what should Dr. Goodman do about all of this? Well, he could put his foot down and insist that CT scans are unnecessary when it comes to diagnosing appendicitis, but his brother doctors will tell him that their lawyers say that when most people in a profession begin to do the same thing in treating a patient, what they do sets a standard, deviance from which can set up a malpractice claim if something goes wrong. So the surgeons insist on getting the scan.

But suppose Dr. Goodman becomes the last angry man, and, armed with a black bag full of studies that prove he’s right, he still refuses to write an order for a CT scan. Chances are, the surgeons and radiologists, regardless of Dr. Goodman’s evidence, will speak to the patient about it, and since an insurance company will probably pay for the scan, they simply find another doctor to write the order. People always ask for the bells and whistles if they can get them for free.

Has Goodman accomplished anything in defiantly refusing to send his patients for CT scaDr.ns? Certainly, Dr. Goodman has demonstrated virtue, but because he wouldn’t make the referral, the patient has been moved to another doctor. The new doctor is more than glad to cover his own rump and, in so doing, help out his friend, the radiologist. If Dr. Goodman gets paid on a fee-for-service basis, he’s succeeded in reducing his own income. If he’s on salary, he’s made the first installment in building a reputation for non-cooperation that will eventually disadvantage him. He feels good and righteous about what he’s done, but unfortunately, he can’t use that good feeling to pay for his malpractice insurance. If he had recognized that the patient was going to have the CT scan with or without him, it would have been more rational for Dr. Goodman to play along.

Let’s suppose, though, that despite what I’ve just said, to the dismay of the radiology department, Dr. Goodman manages to convince the surgeons at his hospital that CT scans are not necessary for the diagnosis of appendicitis; if all of the surgeons agree that they won’t ask for scans when the patient presents with what seems clearly to be appendicitis, has Dr. Goodman won?

Emphatically not! There are three other hospitals in Silver Spring, all of which are owned by radiologists and operated by accountants and lawyers, where Dr. Goodman has no influence. In America, we want what we want, particularly if somebody else is paying for it. If patients, armed with the knowledge that many doctors use CT scans to diagnose appendicitis, begin to realize that they’re not going to get a CT scan at Dr. Goodman’s hospital regardless of the fact that their insurance will cover it, they’ll simply go to one of the other hospitals. And what will happen at Dr. Goodman’s hospital when a new hotshot doc shows up and doesn’t want to play it Dr. Goodman’s way?

My point here is not to excoriate radiologists, accountants or lawyers as being greedy or uncaring about patients. There are certainly many good radiologists, accountants, and lawyers running hospitals who care about others, at least as much as Dr. Goodman does. The point is that one virtuous person, or many virtuous persons for that matter, cannot reform a system from within it. To make systemic change you need an exogenous force with the power to regulate and enforce. For those of you who do not speak the language of academic political science, I just said you need something like a government.

Let’s go back to Dr. Goodman’s hospital. I’ve already shown that it is unlikely that Dr. Goodman, acting on his own, can do much about what he believes are wasteful, expensive, and potentially harmful CT scans. But, if Dr. Goodman can convince the state licensing board that he’s right, the licensing board can ban the procedure in all but a few carefully specified cases. In so doing, it sets a new standard of care that will protect doctors from liability for doing the right thing. Then, insurers don’t pay for it and, in a perfect world, health insurance premiums go down without a significant impact on the health care a patient receives.

In the foregoing example, what’s important is that the licensing board imposes a sacrifice or a constraint that affects everyone with an interest in a uniform way. Nobody has to calculate whether it makes sense to “disadvantage” himself by doing the right thing: the licensing board has already decided which actions are acceptable and which are not. There will be no cheating because the licensing board can punish a cheater by suspending or revoking his or her medical license. And, neither patients nor surgeons will have recourse to a second local hospital because all hospitals under the jurisdiction of the licensing board are bound by its decision and are subject to punishment for violating it.

This is why health care cannot be reformed piecemeal, doctor by doctor, hospital by hospital, insurance company by insurance company, or state by state. The reality is that while individual components of the health care system may work well, when each is allowed to make calculations based what is in its own interest, the system becomes dysfunctional.

Like it or not, what we need is systemic reform, and the only entity that has the ability to reform and control a system as big, complicated and unwieldy as the health care system is the federal government. We can argue about how it sets standards—I, for one, would like to see those standards set by physicians using scientific comparative effectiveness studies—but what we cannot argue about is the power of virtuous souls to negate the logic of the Tragic Commons.