Saturday, August 4, 2012

Perverse incentives - Don't shoot the messenger!

I don't follow international badminton as closely as perhaps I should, but maybe we've all been a little guilty of that.  However, the recent disqualifications of Olympic players got my attention.  It seems that some top badminton teams were blatantly trying to lose their matches.

Puzzling, huh?  It is until you read about the tournament system and strategy around match play.  It seems that the top-ranked teams don't want to face each other until the finals, and so they conspire to throw preliminary games so that they are matched with less expert opponents.  This strategy improves their chances to make the finals, and end up with a medal of some sort.  When you think of it like that, it makes sense, except that it was so obvious to spectators and officials that the teams were flubbing games, that they were disqualified for not living up to the competitive Olympic spirit.

I wonder what the athletes were told before they left for London: Your country expects you to give your best in ever match, or Your country expects you to bring home a gold medal?  Even if it wasn't explicitly voiced, I suspect the second is strongly implied.

Commentators pointed out that the format of the tournament - round-robin - encouraged this type of "cheating" as athletes knew that this would be their best chance to win a medal.  So who is to blame?  Is it disingenuous of Olympic officials to expect athletes to give their all in every match when it could deny them a chance at a medal?  Why do the Olympics only recognize the three top teams with medals if grit and determination are more important?  This is a classic perverse incentive.

It made me think of the current fee-for-service remuneration system for physicians.  Provincial health insurance plans "reward" us for providing more visits and procedures, yet at the same time, we're told we need to provide better quality of care (which sometimes means doing fewer interventions...).  At present, our monthly billings are the only scorecard we have, yet health care commentators ask us to "give 110%" to patient-centred care.

If physicians can legally maximize their billings without compromising patient care, then it's only natural that we will do so.  (Note that there is a difference between passively "not compromising"- i.e. status quo - and actively optimizing care.  The latter is preferred, but needs an incentive...)  In the same way that the Olympic officials should consider the influence of tournament structure on player behaviour, officials responsible for maintaining the current physician incentive structure should do the same.

Leaving a dysfunctional structure in place is not a passive choice.  It is an active decision to avoid taking the steps to make a positive change.

Don't shoot the messenger!