How to manage without targets

It’s easy to fig­ure out the pri­ma­ry incen­tive of the hos­pi­tals in this case: fund­ing (they’re chron­i­cal­ly short of it). If the length of the surgery list has an inverse rela­tion­ship to fund­ing then their incen­tive is to cut the length of the list. That is not, of course, the intend­ed objec­tive of the pro­gram. The Depart­ment of Health wants to speed up surg­eries. But they have cre­at­ed a proxy-tar­get (the wait­ing list). So it’s almost cer­tain that what they’ll get is a change in the proxy, whether or not that brings about the change they seek.

What’s the solu­tion? Actu­al­ly there isn’t like­ly to be just one because, in real­i­ty, the prob­lem of the length of time it takes to get elec­tive surgery involves many dif­fer­ent fac­tors. The length of the ‘queue’ is only an index, not the prob­lem itself. The Depart­ment should aban­don the ‘length of wait­ing time’ tar­get and try a num­ber of dif­fer­ent exper­i­ments that might affect the real incen­tives of the hos­pi­tals and the oth­er actors—patients, sur­geons, spe­cial­ists, hos­pi­tal administrators—whose behav­ior can affect over­all wait­ing times. They’re very unlike­ly to guess all of the pri­vate incen­tives that are expressed by these behav­iors. So they’ll have to try dif­fer­ent approach­es and find out which ones (prob­a­bly not ‘one’) will work. They might need to try many of them, so it’s a good idea to use small scale experiments—in dif­fer­ent hos­pi­tals, too—and it’s essen­tial to eval­u­ate the out­comes, aban­don­ing those that don’t work.

For exam­ple, the Depart­ment could offer patients an incen­tive to elect surgery in hos­pi­tals with the short­est ‘queue’ even if it’s not the most con­ve­nient (e.g. near­est) choice. They could offer spe­cial­ists who refer patients to sur­geons an incen­tive to dis­trib­ute rec­om­men­da­tions around hos­pi­tals by hook­ing them up with dif­fer­ent sur­gi­cal teams. They could try to encour­age one hos­pi­tal to spe­cial­ize in the most-demand­ed elec­tive pro­ce­dure in an attempt to increase the effi­cien­cy of that pro­ce­dure and then re-direct appro­pri­ate patients from oth­er hos­pi­tals to that team (or have their spe­cial­ists do so).

What would you recommend?

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