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ER economics 101

This past week, I was sent my doctor to the ER for treatment of a boil.  I’m doing well, thank you, but it was a huge pain.  Certainly more of a pain than wild animals, but not as much of a pain as hail; overall, I’d give it a 6 out of ten.

When I got to the hospital, the ER was packed; there was not a single seat available in the waiting area.  The only time people seemed to get up was in order to yell at the nurses for their not having seen a doctor yet.  Doctors had to run from room to room in order not to get mobbed by impatient patients.  At one point during the evening a doctor broke down and, after a patient yelled at her that he had been waiting five hours, screamed back at the patient complaining about her terrible working conditions and paltry salary.  More words were exchanged, but I don’t know enough swear words in Russian to translate properly.

By the end of the night, I had waited eight hours to see a doctor.  In retrospect, my waiting was partly my fault.  Medical care is a resource like any other and I should have been looking at this situation using economics, the study of who gets what and why.

Hospitals are overcrowded; doctors are resource in a terrible shortage.  One of the jobs of the nurses is to sift through the patients and prioritize so as to use the resource in the best possible way.  This means that seeing a doctor has more to do with one’s relative priority to others in the ER and less to do with one’s time of arrival.  While many try using intimidation to make themselves look like more of a priority, the better strategy is to wait until a time when there is not much competition.

When a doctor sends gives you a referral to the ER, ask him or her if you need to go ASAP or if it can wait until around 3AM.  If it can, then go home and relax before going to the ER.  Doing this can reduce your waiting time from as much as eight hours to as little as thirty minutes.

Two more things to note: (1) Yelling at the doctors will not help.  They are not the ones under-staffing the hospitals.  If you want to yell at someone, look up the MK’s phone numbers and call them. (2) If possible, try to always to go the hospital with food, a book, an iPod, and, if possible, even a laptop and a couple of movies.  You’re going to wait anyways, so you may as well plan your own entertainment in order to make the time go by quicker.

In an ideal world, our government would get its act together and help provide better medical care for its citizens.  Until that happens, the best thing you can do is to be understanding of those trying to provide you with medical care and to do your part as well.

tournament theory and the medical solution

Have you ever wondered why your incompetent boss makes so much more than you?  Well, economists have an answer, tournament theory Developed about 30 years ago, tournament theory suggests that most offices are a tournament where differing workers compete for a prize, which is usually given in the form of a promotion.  Tournament theory suggests that your boss’ pay is not so large because he or she deserves it, but because it is meant to motivate you.

Does the pay difference between you and your boss have to be so large?  At first glance, the answer would seem to be yes.  Let’s take an example of a payment compensation scheme at the fictional but squeaky Rubber Duck Company.   The manager tells the workers that whoever makes the most rubber ducks gets $100 and everyone else at the company will make only $40.  The workers know they are guaranteed $40 and would only put in up to $60 worth of additional effort in order to get the prize; anything else would be a loss.  Realizing this, the manager changes the pay scheme, telling the workers that the winner gets $100 and the loser gets $10, thus increasing the amount of work that each worker will put in to approximately $90.

But first glances can be deceiving.  As the working season begins, workers begin sabotaging one another.  Also, some workers who were previously able to try and put in the $60 of extra effort have cut back entirely because they know they will never be able to produce $90 of extra work like some of their more able coworkers. Finally, one worker notices that a rival company, Quackers, which is currently hiring, is planning on giving their workers the same deal as the Rubber Duck Company except the top prize if $65 and the bottom is $40. Realizing that working at Quackers guarantees $40 and would only require up to $25 of extra work, many workers leave the Rubber Duck Company and their over-competitive manager.

So what’s better, a large spread or a small spread?  Like most things in economics, there is an equilibrium point.  Far from being perfect, this point may end up discouraging a whole lot of workers, especially when there is luck and protectsia involved.  One solution to this is to offer a few different prizes.  Suppose the Rubber Duck Company offered $90 to the best worker, $70 to several runner ups and $40 for the rest.  With not so much of their pay at risk, workers would be less antagonistic, perhaps even helping one another in alliances.  These workers may also take a shot to win the prize, whereas in the past, the out-of-reach goal was discouraging.

In a recent round of negotiation between the Israeli Medical Association, tournament theory, whether using its name or not, was among the many, many issues discussed.  Doctors have been leaving the public sector for many reasons, one of which is a lack of advancement.  In a standard department of a hospital, there are two levels, regular doctor and department head, a position held until retirement.  As a compromise, a new position between regular doctor and department head, or second tier prize, has been offered.  This new position will be called ” service manager.”

This compromise gives me hope.  Creating an in-between level is the obvious solution to discrepancies that are way too high.  Perhaps in time, there will be less department heads, and more service managers who will become the new de-facto department heads with pay discrepancies not as insane as the ones currently in place.  I am curious to see if this works and I am even more curious to see if it can be applied to office life as well.  Perhaps creating loopholes around the levels of bureaucracy ordained by the government and accepted business practice, we can deal with the income disparity in Israel without the need for a socialist revolution.  Or maybe I am too optimistic.  Perhaps we need the pendulum to swing the other way in order to get better social benefits and address the growing income disparity in Israel.

What do you think?

Chuck vs the hospital

If you’ve been in Israel more than 10 minutes you know that, by law, one major sector must always be on strike.  Shockingly, this time it’s not going to be the garbage men, the dock workers, or the government clerks (although you never know).  The next group set to strike is the doctors.

While the main argument is over money (bet you didn’t see that one coming), the doctors also want extra incentives for doctors to work in fields where there is a lack, namely, anesthesiology and pre-natal care.  This seems logical; after all, a rise in salary would entice more doctors to enter into this field and would help the shortage in the hospitals.

Unfortunately, economically speaking, this plan is not viable in the short term.  Incentives could only entice doctors who are only entering medical school.  The prospective doctors would not actually be working in the field for several years.  (I do not count doctors that leave for work abroad because I do not believe a marginal increase in pay would sway an anesthesiologist from the much higher salary he would still make abroad.)  Logically, the government should only guarantee these extra incentives in 6 or 7 years, when the current perspective doctors will actually enter the field.

But another, more important option is not being mentioned in this debate.  That option is to deal with the shortage via a computer system that would unite the current systems in the Kuppat Cholim and at the Hospitals.  You see, while the computer system at your Kuppat Cholim is fantastic, and the one in the Hospitals is decent, there is no interaction between them.  As a result, doctors waste much of their time piecing together information.  I can tell you first hand that the overwhelming majority of time I have spent with my wife and the pre-natal physician was spent piecing information together.

And it’s such a shame.  A few weeks ago, we spent literally 4 hours waiting for a couple of physicians to go through approximately 10 women in order to meet with us.  And even then, the doctor was pushy and anxious to get to the next patient, so we did not receive her full attention.  She spent most of her time asking my wife to find various papers and tests results and then did an ultrasound and gave a quick diagnosis.

If Israel were to have a national computer system that could combine medical files and speak to the different electronic systems, then the amount of time a pre-natal doctor spends with a patient could easily be halved.  The shortage could be dealt with instantly, patients would be able to feel the results and misdiagnoses would drop.  Of course this could not work with anesthesiologists or surgeons, but for doctors whose primary role is diagnostics, a new computer system would be the most effective way to improve Israel’s medical system.

So while the doctors stand on one side of the picket line and the government puts up a fight that we know will end in 3 weeks with them caving in, you and I should be rooting for a new computer system that will be a cross between Chuck and House.

Have you been in an Israeli Hospital?  What do you think would improve the system?

PS – Have you ever noticed that people who strike in Israel don’t even go to a picket line?  How lazy is that!?

the economics of blood

I’ll never forget the first time I gave blood in Israel.  As the needle was being taken from my arm as the end of the procedure, I looked up anticipating free orange juice and Mrs. Field’s cookies, just like they give out in the USA.  To my chagrin, I was given a kochav drink instead.  In my own little Yeshiva guy world, I was crushed, but in retrospect, it was the most nourishment I ever received after giving blood.  The next time I gave blood at MDA, and instead of receiving the advertised pint of Ben and Jerry’s, I was given water and advised to go buy something sugary.

But what Israel lacks in recovery foods, it gives in other perks.  The other day, I arrived to Tel Hashomer a bit early for a childbirth seminar with my wife and decided to give some blood.

“Are you giving the blood for someone specific?” asked the nurse.

“No” I responded, “I am just here for a childbirth seminar with my wife and decided to give some blood.”

“Then you should give the blood for her,” the nurse responded.  “If no one gives blood for her and she needs blood during the childbirth process, she will have to go get permission from her insurance to cover it.  But if you say the blood you give now replaces what she will use, then she can get blood without any bureaucracy.”

Of course I wrote that the blood was for my wife in case, God forbid, she needs it.  I was given a small certificate to put into her medical file and a voucher for free parking. 

This incident got me thinking about the economics behind blood donation.

Approximately 4% of Israelis and 3% of American donate blood every year.  And since only 38% of the population can donate blood it is more correct to say that 10.5% and 7.9% of able Israelis and Americans donate blood respectively.  Does this mean that medical preference and free parking beat Mrs. Field’s cookies and orange juice?

Of course not.  Most donors give blood because they want to help others.  People see it as a sort of civic duty, an inexpensive but very important way to give to those in need.  Unsurprisingly, blood donors are generally more conscientious of their civic duty in other matters as well.  In the US, 94% of all blood donors are registered voters, as opposed to the national average of 74% (this does not include people under 18). 

So why do Israelis give more?  My guess is that since people in Israel are more active in the government (serving in the army, voting every year when the government falls etc.) they have more of that sense of duty that inspires blood donation.  But I’d be remiss if I did not mention the fact that Israel offers a lot more chances to give than in the United States.  It is not at all uncommon to see a blood donation ambulance near malls, Universities and major events (I know they do this in the States as well, but anecdotally, I have not seen it as much.)  Make no mistake; convenience is powerful.  Personally speaking, the only reason I have not given blood in the past year or two has been inconvenience.  If there were an ambulance truck next to my house, I’d probably give as often as possible.  I have a similar argument with my wife about recycling.  She insists we recycle everything possible even though the recycling bin is an entire 40 seconds away from our house.  I argue that it is too far for me because it NY it was at my front door.  I usually lose the argument, but the principle still stands.  I hope the Jews in Egypt didn’t have to work this hard.

Getting back to our subject, convenience is vital for receiving blood donations.  That is why Tel Hashomer offers people free parking in return for a pint of blood.  Usually, the driver isn’t the sick person, he is more likely to be the one in the waiting room accompanying a sick relative.  At this point it is convenient and beneficial for him to give blood.  The stupid mistake they make is that the blood lab closes at night, when, statistically speaking, the greatest amount of patients come and people wait the longest.  The lab for donations is closed when the greatest potential exists.

So what could Israel do to inspire more blood donation?  More specifically, how can Israel reach its target demographic and be as convenient for them as possible?

One idea is to find the missing potential donors.  In the US, donors are 50% men and 50% women, but since women are more likely than men to be anemic or underweight, it stands to reason that more of the eligible donors are men.  In other words, the market for men’s blood has not really been explored as much as it should be.  Perhaps blood-mobiles should spend a bit more time at sporting events, BBQs, and sporting goods stores. 

Another idea would be to have a massive blood drives on Election Day and Yom Ha’atzmaut.  On these days people are easy to find (voting areas on Election Day, BBQ areas on Yom Ha’atzmaut), people have time to spare, and civic responsibility is in the air.  I know what you’re thinking; these are sacred vacation days.  But if these days are as effective as I hope, then it may be worthwhile to give the workers even five times the amount of vacation days for every one they work and still come out on top.

Have you given blood in Israel?  How was it?  What would make you give more blood on a regular basis?