Greed is not good when it comes to doctors, patients and medicine

Gordon Gekko is wrong. Greed is not good. Not when it comes to health care providers.

The socioeconomic study of what motivates people is a fascinating field of study, not the least of which is because of how counter-intuitive it is. For example, it seems normal to assume that the more someone is rewarded for their efforts, the more effort they will put forth toward those rewards.

These rewards (increasing salary, bonuses, benefits, status, etc) are known as “extrinsic” motivators and for menial and/or repetitive jobs that have little need for regular complex planning, evaluation, or creative problem solving like unskilled manufacturing, manual labor, or GOP membership, the system works as expected with bigger monetary rewards leading to bigger efforts.

However, this simple linear model of economic motivation begins to break down as “intrinsic” motivators start to dominate the picture. Intrinsic motivators are such psychological variables as the perception of autonomy, mastery of the task or role, and purpose. It turns out that not only do extrinsic variables not work as predicted for motivating a worker tasked with performing complex work that requires thought and problem solving skills but this kind of motivation actually reduces job performance (particularly time spent per task).

This counter-intuitive result is what economists refer to as “crowding out” of the intrinsic values with the extrinsic values. The offer of an extrinsic reward tends to cheapen or dampen the intrinsic rewards and the negative effect on your intrinsic motivations is enough to negate and even reverse any positive extrinsic motivators. External motivators tend to come with conditions that hamper autonomy, mastery, and purpose. A job that was once “fun” has now become burdened with the demands of higher expectations even though a reward is bundled in there somewhere. Extrinsic rewards also impair creativity and thinking by narrowing down the focus of the task (i.e. getting it done faster or more efficiently).

The key to having a happy employee who’s job involves cognitive skills, creative thinking, and problem solving is to 1.) ensure that they are paid enough to close the gap between what they are paid and what they think they should be paid based on their education, training, and experience so that base pay is no longer an issue and 2.) allow the intrinsic motivators of autonomy, mastery and learning, and purpose to flourish. There is a great “whiteboard” animation of a presentation on this by Daniel Pink for those who think I’m crazy. This is not neo-hippy, socialistic, Montessori style, feel-good new management methods. This is real world and is already yielding benefits for companies like Google.

This got me thinking about physicians and motivation. We like to say that what motivates us is the chance and desire to save lives and improve lives. That’s purpose. We like to be our own boss and work on our own schedule. That’s autonomy. And we like what we do. We find it interesting and strive to learn more and improve our skills. That’s mastery.

With so many intrinsic motivators for doctors, why then, do many appear to defy the evidence for the establishment of motivations stated above and simply increase their work loads to obtain the higher salary or bonus or base income? I have seen physicians who round on 15-20 complex hospitalized patients in an hour and others who see a complex medical patient in the span of a 3 minute office visit. Then there are those who push the boundaries of the vast gray area of test and procedure indications (like ordering expensive nerve studies on every diabetic patient regardless of symptoms) and then there are those who commit outright fraud.

Many doctors are employees but the type of excessive extrinsic motivated behavior I’ve seen comes from physicians who are self-employed, while the studies for the effects of extrinsic and intrinsic motivators were done mostly in the context of employee-management relationships. Is this the reason for the discrepancy? I don’t think so. Self-employed doctors function as employee-owners, doing the brunt of the work for their practices while being beholden to insurance companies and the government for their compensation. It’s still very much of an employee-like relationship with the promises of increased compensation for increased work. The same basic motivator mechanisms should still apply.

I believe that the problem starts with insufficient compensation which in of itself is an extrinsic motivator that compels the worker/doctor to try and close the gap between effort and proper compensation. This seem to help explain why higher paid specialists, though they work hard, tend not to follow a pure profit motive pattern. Surveys have found that specialists are more satisfied with their jobs than their lower paid colleges in primary care. Specialists are also more likely to be self-employed (autonomy) and in my experience, they tend to express more interest in and a desire for mastery of their field and skills than many primary care docs.

I believe that the second culprit is the per-patient or per-procedure way that doctors are compensated. This a system that already has multiple levels of bonus and reward built into it just like the unskilled laborer who gets paid more to move more rocks, so to do physicians get paid more to see more patients. So how does a physician with a high level of intrinsic motivators convert to a profit driven machine with the extrinsic motivation profile that is on par with an unskilled rock mover?

The key concept is that they convert the essence of their job from creative problem solving of multiple complex tasks to following more linear basic rule sets. In short, they go from practicing medicine to practicing “cookie-cutter” medicine. You would think that this would apply more for specialists who often deal with more linear decision making for their many technical skills and procedures they perform but I’ve seen profit driven “cookie-cutter” medical practice behavior more often in primary care docs and I think that it is their lower compensation that is to blame.

“Cookie-cutter” physicians try to minimize risk while maximizing profits. One way to do this is to minimize the time spent with the patient and on complex problem solving. It is more efficient and profitable to perform a very basic linear diagnostic and treatment evaluation. If knee pain then –> MRI. If nervousness then –> prescribe sedatives. If fever –> antibiotics. If chest pain then –> cardiologist referral. If vomiting then –> gastroenterologist referral. Most of the complexities and nuances of medical care are tossed aside in favor of a rote if-then decision tree that can be done by any couch potato who’s watched too many episodes of “er”.

Usually, this type of medical care increases overall utilization of resources. Expensive tests and procedures are more likely to be ordered both because the physician believes that they reduce their liability risk which they have acquired from spending too little time with too many patients and/or because they increase profit. Medications are more likely to be ordered for each and every symptom because it takes less time to explain to and convince a patient – who is usually expecting some type of medication – why they need the medication than why they don’t.

Needless to say, this type of medical practice does NOT improve overall care quality or patient satisfaction and may very well decrease care quality in many circumstances. This apparent paradox in decreasing health care quality in areas of high health care resource utilization has been extensively studied using natural geographic variations in Medicare spending. These physicians tend to prescribe too many referrals, tests, procedures, and medications and they all come with risks. Physicians who practice this way are likely to be too aggressive with diagnostic modalities and treatments for certain subsets of patients. For example, in patients with mild conditions in whom the side effects may outweigh the benefits or those with advanced disease for whom aggressive treatment is more likely to hasten death than to prolong life.

The study of economic motivation models may help to explain and predict that inadequate compensation is more likely to change physician motivation and practice patterns from an intrinsic system to an extrinsic profit driven system which increased health care utilization and ultimately higher costs for no quality benefits. This is particularly true for primary care practitioners and does not bode well for Obama’s new-American health care mecca.

There are some obvious solutions. First, pay primary care physicians an increased amount so that they are adequately compensated for their time, effort, and level of training and that this issue is “taken off the table.” Next, change the per-patient, per-procedure scheme to an annual fixed amount based on a set panel of patients.

Greed is “good” in that it leads to capital investment in macroeconomic systems but in the microeconomic context of skilled health care worker, greed – external profit motives – suppress intrinsic motivators and invariably leads to sub-par performance, increased costs, and decreased care quality and decreased satisfaction values among patients and physicians.

Chris Rangel is an internal medicine physician who blogs at

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  • mark

    “and for menial and/or repetitive jobs that have little need for regular complex planning, evaluation, or creative problem solving ike unskilled manufacturing, manual labor, or GOP membership”
    I stopped reading right there. I’m a Democrat and even I find that crass and indicative of a lack of judgment.

    • SteveBMD

      Agree 100%. Absolutely unnecessary comment, and unfortunately taints what is an otherwise well-argued post.

      Can you imagine Dr Rangel sitting down to discuss health care reform with an avowed Republican who might share some of his views? And showing respect for him/her, or being fair and balanced? I thought not.

  • Dr. Mary Johnson

    Excellent article.

    But the government and the pubic does not care. And, as the world watches Chelsea Clinton play American princess on the Hudson today, I cannot help but change the channel . . .

    . . . for my problems began on her Father’s watch (you might remember her Mother’s theory that it takes a village), and have NEVER been addressed by the government that Barack Obama would now hand even MORE to do/police.

    It’s madness.

    • Alina

      “But the government and the pubic does not care.”
      Why republicans always seem to confuse public with pubic? It’s really not the same, you know….

      • Dr. Mary Johnson

        Chuckle. That’s what typing quickly – before you go in to round on those patients you don’t care about will do.

        Not a Republican. And I’m sorry, Alina, but based on the way I was treated in government service, (1) I’m not confused and (2) it IS the same.

  • Dr. Becky Hollibaugh

    Excellent article

    We are continuously pressured to see more and more patients all the while the quality of our care is diminished. Our patients are less satisfied and we are less satisfied. It shows that it’s not “all about the money” We want to take good care of our patients and build a relationship with them.

  • jsmith

    There’s a problem with intrinsic motivation (IM). It only works if you are already in the game. But medical students, when they make their specialty decision, have no particular reason to think that gastroenterology, say, will be less intrinsically motivating than primary care. And it pays one hell of a lot more. So, what to do? The evidence, according to articles by Mark Ebell, is that med students choose based on expected future earnings.
    Doctor satisfaction is important, and IM is a part of it. Decreasing financial motivation once a doc is at work is a good idea, agreed. But it won’t get us all the way there. A lot of test ordering is not based on greed but on fear, or on simply on the standard of care, or simply because of the urge to do something. GI docs tube colons in part because that is what they are trained to do. They like tubing colons. If you have a hammer. ..
    While I think IM is just part of the puzzle ,your final analysis is correct. Decreasing salary discrepancies and changing the piecework payment system would help this country’s medical system.

  • doc

    Greed may not be good but is an innate instinct. No matter what model is used, there will be winners and losers with potential losers resisting the change. The likely end result: status quo.

  • Alexey

    Great article, thanks for posting.
    If you look at other countries experience, the passion to take care of people and health motivate doctors. My medical school was in Russia and many people did not advice me to go for it, because doctors salary, regulated by government pushes them to the border of poverty. I was highly motivated intrinsically – I always wanted to improve patient’s health and treat. Paradoxically in this doctor’s salary (frequently equal to teacher or janitor’s salaries – called “survival minimum”) situation in Russia, there was always a competition to get into medical school – 3-5 people/ per spot. There is no any money motivation there. But young people still want to pursue medical profession because it’s so nobly.

    I agree that doctors deserve greater salary than average in US or any other country, but it could be 2-3x, maybe 5 times greater maximum, but not 10x as we can see in US. I think it should be tightly regulated, because it’s provoke a greed and money motivation. It makes medicine nothing more than a business. It’s very sad. Even i consider money as a good motivator for professional growth at some point of career, I think doctor’s should not be motivated by money.

  • imdoc

    I agree that compensation should be just enough that physicians don’t need to worry about, and be distracted by finances, but other rewards need to be evident. I think one thing which has changed is that doctors are not revered in society. The fast-food service mentality as well as broad entitlement philosophy has caused large segments of society to regard all medical workers with diffidence. Medical care is like a public utility. Some people seem to chafe outwardly at the notion of a ‘professional’ as different from anyone else. There is also the ever-growing distrust and suspicion for all forms of authority, fed by the media. So…there goes a substantial part of the intrinsic reward. Couple this with a value system in society that equates money and power to status and there will be some cognitive dissonance for anyone who wants to be in medicine.

    • jsmith

      Nice post. You hit the nail on the head.

  • Dr. Mary Johnson

    Pepple, people lighten up. As an indentured servant formerly of “the village” – drawn and quartered & guts splattered all over the White Wall for all the wrong reasons on Bill & HIll’s watch, it was VERY hard to stomach the fawning coverage of the “wedding of the century” today.

    So Rangel hates the GOP. Big whup. I’d love to compare my notes with his and see who’s got the bigger beef. The problem may start with “insufficient compensation”, but it most certainly does NOT end there.

    Wouldn’t it be nice if we as a profession could stand together and shame politicians on BOTH side of the aisle into finally doing right by the profession?

    Because it didn’t happen with Obamacare as passed.

  • Margalit Gur-Arie

    Doctors are not “revered” anymore because medicine is no longer associated with magic as the education gap is narrowing. However, doctors are still very much respected. It is a prestigious profession and I believe it will always be by virtue of the amount of education required. Perhaps similar to a Physics or Math University Professor on the respect scale.

    As to adjusting compensation to be just enough to allow physicians to take it off the table, I don’t know how you do that. It is easy to raise reimbursement for primary care, but how do you cut reimbursement for the highest paid specialists, when custom and expectations are already in place? And we have to do both…

    • jsmith

      Let’s do a little math. According to Uwe Reinhardt, net physician salaries make up about 10% of national HC spending, so (my estimate)primary care doctor salaries make up about 2%-4% of gross national health care spending. Raise primary care doctor salaries 50% and leave subspecialty salaries alone. The increased costs would represent much less than 1 or 2 years of medical inflation.
      The idea that paying primary care more will break the bank is a myth originated and propagated by people unable or unwilling to do simple back-of-the-envelope arithmetic.
      It’s not the absolute salaries: it’s the piece work payment system.

    • joe

      “….as the education gap is narrowing”

      Narrowing? You obviously have not paid attention to how poorly average americans are educated in science and math. Read the stats.

  • Dr. Mary Johnson

    Yes indeed, I can tell how much the profession is “respected” by some of the comments here.

    I’d like you to go spend a few hours on my blog’s sidebar and then tell me that ALL I care about is money – or that I’m “not competent or compassionate”.

    And from “Easton” on a another Kevin MD post I’m following:

    “If I wasn’t married and never wanted to see my kids, I could still do it . . . But it just wasn’t worth it. I think doctors are realizing that work isn’t everything, especially if it’s bureaucratic paperwork and government-induced, unpaid time. I don’t think I’d look back in 30 years and say, “I’m sure glad I worked all those extra hours.”

    Spot-on comment. I’ve hung on for the love of what I do. Don’t know how much longer that’s going to last. I wonder if I’ll get a write-up in Newsweek then?

    Be careful what you wish for, Alina. You just might get it.

  • Dr. G

    For those of us in private practice, there is no choice but to be concerned with money. Would you recommend an owner of a local retail shop to not be concerned with money? If so, I recommend you not start a business, because it will not be around long.

    Our practice has roughly 30 employees that are dependent on the practitioners of the practice bringing in a certain amount of revenue. If not, they lose their health insurance, their 401K, or even their job. I would love to see one patient every 30 minutes, but I could not afford to keep my doors open if I did that.

    When I go on vacation, the overhead of the practice is still there (rent, employee salaries and benefits, malpractice insurance, etc) ticking off at about $1000 a day. I would love to not have this thought in my mind when I should be enjoying my vacation with my family.

    Dollars and cents matter in medicine, to deny this will only lead to a fiscally insoluble practice, hospital, or HMO. The true challenge is balancing this with the care and compassion required by the profession.

  • IVF-MD

    If what we want is for doctors to render quality care and good customer service (leading to patient satisfaction) and if what doctors want is a balance of financial reward and emotional reward, then it would stand to reason that a system that ties a physician’s reward to the level of patient satisfaction would be a good system. Correct? If we then ask why we don’t have such a system (assuming we don’t), then we could take the next step towards improving things.

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