With a title like this, it usually stirs the pot. So, I will start post by giving out the punchline: I don’t think doctors/dentists set out to act against your interest, but the system in which they operate in “nudges” them towards making some less than desirable decisions for their patients.

A perk of having a dentist brother is that I get to hear both patient and dentist perspectives, which are similar to doctor/patients perspectives (also, you should read his blog on all dental things here). One can quickly realise that in any dental transaction, the incentive for dentists differs from the one for the patients.

Let me explain.

Any transaction in dental clinic is one where one party, namely the patients, has to make a decision with incomplete knowledge, whereas the counter-party has most of the relevant information. Normally, there is less willingness for the both parties to enter a transaction because of genuine mistrust between the two. Hence, regulations are generally enacted to lower the barrier for commerce to happen. At the very least, a patient knows that safety and quality of service are guaranteed by the Government.

Since it is an exchange of goods and services between two parties, there are incentives that guide their decisions. And that can be very different depending on the “rules” of the game. For patients, it is reasonable to assume that they want the best treatment/service for a fair price. However, when we look at incentives for doctors/dentists, we find that sometimes they do not quite align with those of patients.

Here are just some of the examples and what they can mean for patients:

1) For a dental clinic, overhead is constantly on any dentist’s mind. For him, it is about cutting cost down and perhaps increasing the number of patients to increase profit. After all, market economy incentivises those who can maximise profit. So, they might not order an X-ray photo on the first examination to save time and money, but as Dr Supa said:

…what would the doctor say when a patient shows up with a broken arm and said “Doc, I want you to fix my arm but I don’t want you to take an X-ray”. He would probably say “I don’t know the extent of the damage to your arm and I won’t be able to recommend the best treatment”. Essentially he doesn’t have enough information to treat the patient appropriately. He can guess but would you want your doctor to guess or do you want your doctor to know?

On the surface, it seems that dentist may be doing you a favour, but upon further thought, it may be not your best interest.

2) To increase the number of patients, a dentist may choose to operate on each patient quickly. Simple minded that I am, think that this should lead to increase chance of mistakes and generally low quality of service.

3) Going oversea for a dental surgery is getting quite popular with many Australians because of price competitiveness. However, how many people pause to think about incentive for oversea dentists? Is there any incentive for a dentist there to perform at their best knowing that if something goes wrong the patients will most likely not fly back to get their dental done again? Further, when something goes wrong, would an Australian dentist accepts liability of fixing someone else’s mistake?

4) As explored in this episode of Freakonomics, doctors/dentists are bounded by regulation. Whenever there are rules, there is an incentive to game the system. Doctors acting in their patient best interest ends up reducing overall efficiency of the system.

So, next time, it worth thinking about incentive for the expert sitting on the other side of the table.