In December, doctors at a VA hospital in Oregon decided to admit an 81-year-old patient. He was dehydrated, malnourished, plagued by skin ulcers and broken ribs — in the medical professionals' opinion, he was unable to care for himself at home. Administrators, however, overruled them.
Was there no bed for this poor man? No, the facility had plenty of beds; in fact, on an average day, more than half of the beds are empty, awaiting patients. Was there no money or medicine to care for him? No, and no. Reporting by the New York Times suggests that Walter Savage was, perversely, turned away because he was too sick. Very sick patients tend to worsen the performance measures by which VA hospitals are judged.
If this had happened in isolation, we could simply gape at the monstrosity that bureaucracies are occasionally capable of.
But such examples abound in health care. For example, in the 1990s, New York and Pennsylvania started publishing mortality data on hospitals and surgeons who did coronary bypasses. The idea was that more informed consumers would steer themselves toward the teams with the better statistics — theoretically good for patients, bad for slacking providers. The reality was less ideal: In those states, surgeons seem to have started doing more operations on healthier patients, while turning away the sickest ones who might otherwise have benefited.
From this we can take a few lessons. The first is one that has been well-known to other sorts of businesses: What you measure is what you get, not necessarily what you want. In fact, if your measurement is badly designed, you may get a great deal of something you don't want.
To illustrate that, look at Wells Fargo, which recently paid a whopping fine because a badly designed compensation system encouraged low-level employees to muck around with customer bank accounts. These machinations generated effectively no revenue for the bank, and annoyed customers, but they did generate income for the employees — and eventually, a stinging, expensive rebuke from the Consumer Financial Protection Bureau.
Or take an example from my own early employment history: I once temped for a firm where some overzealous office manager had decided to crack down on office supply leakage by issuing an edict that employees could take only one pen, notebook and so forth at a time. To be issued another from the locked supply room, you had to show the one you'd used up.
