A must read for any Medicare central planner and anyone interested in healthcare reform.
In his classic study of medical education Forgive and Remember sociologist Charles Bosk points out that a misunderstanding about how physicians make the distinction between what is a reasonable treatment option that is later proven wrong and one that is an indefensible medical error, leads to a misunderstanding about how the medical profession can or cannot be controlled. The concept of a medical error is an indeterminate category, similar to what is beautiful or merciful (p.24). This indeterminateness is caused by the nature of medical knowledge itself which is constituted by two modes, scientific knowledge (or "general knowledge" in Hayek's terminology) and clinical expertise (or "local knowledge" in Hayek's terminology). Bosk points out that "arguments based on clinical expertise override those based on scientific evidence" (p.85). Local knowledge trumps general knowledge.
The apprenticeship that is a residency program for medical students in which an experienced attending physician conveys to the inexperienced resident when to follow scientific knowledge and when to follow clinical experience constitutes the most critical element of that education. Residents are expected to study and know the general rules. Attending physicians are expected to teach residents to recognize the exceptions to those general rules. That clinical acumen or clinical eye characteristic of an experienced attending physician, his clinical expertise, "is a charismatic possession, a gift of grace; its exact nature is a mystery" (p.92). Medical education has evolved over hundreds of years and is structured today partially as a way for medical residents to appreciate that mystery.
The assumption by Medicare and all medical central planners that the healthcare system can be made more efficient through centralized decision making far from the bedside clashes with how clinicians grapple with medical errors, understand their cause and implement remedies, a process that is "an extreme example of local knowledge" (Bosk's own terminology in p. xxiii). Bosk concludes that medical "errors are not events that can be counted. Their existence needs to be debated; the discourse over precisely what is and is not an error is necessary to the formation of a sense of professional responsibility."
If Medicare wants to have local patients, physicians and hospitals adapt quickly to the rapid pace of change happening at the local level in order to reduce costs, it would seem that the best and indeed only way to make that happen is to let the local people who are most familiar with those local conditions, local resources and local changes to make those adaptations. Centralizing that process only slows down adaptation at the local level, reduces coordination and increases misallocation of capital, supplies, and labor.
Only the free market and its price system and not central planning can solve this problem.
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Top reviews from other countries
Klaus Allerbeck
Hervorragende Untersuchung (participant (?) observation) !!
Reviewed in Germany on November 13, 2013
Gord McKenna
A bit dated, not the most exciting read
Reviewed in Canada on August 8, 2010