Tag: doctors

Paying doctors

Back in 2011-12, when I was about to go freelance, a friend told me about a simple formula on how I should price my services. “Take your expected annual income and divide it by 1000. That will be your hourly rate”, he said. I followed this policy fairly well, with reasonable success (though I think I shortchanged myself in some situations by massively underestimating how long a task would take – but that story is for another day).

The longer term effect of that has been that every time I see someone’s hourly rate, I multiply it by 1000 to guess that person’s approximate annual income (the basis being that as a full time worker, you “bill” for 2000 hours a year. As a freelancer you have “50% utilisation” and so you work 1000 hours).

And one set of people who have fairly transparent hourly rates are doctors – you know the number of appointments they give per hour, and what you paid for that, and you can back calculate their annual income based on that. The interesting thing is, for most doctors I’ve seen, based on this metric, what they earn for their level of eduction and years of experience seems rather low.

“So how do doctors earn?”, I wonder. Why is it still a prized profession while you might have a much better life being an engineer, for example?

Now you should remember that consultations are only one income stream for doctors. Those that practice surgery as well have a more lucrative stream – the hourly rates for surgeries far exceeds hourly rates of consultation. And so surgeons make far more than what I impute from what I’ve paid them for a consultation.

One possible reason for this arbitrage is the way insurance deals are structured – at least in India, out patient care is seldom paid for by insurance. As a consequence, hospitals and doctors cross-subsidise consultations with surgeries. They are able to get away with higher rates for surgeries because insurers are bearing the cost. Consultations, where patients generally pay out of their own pockets, are far more elastic.

This, however, leads to a problem for doctors who don’t do surgeries. Psychiatrists, for example. If they have to make money solely through consultations, their hourly rate must be far higher than that of doctors who also do surgeries. But then, is the market willing to bear this cost?

Now, I’m getting into conspiracy theory mode. If the amount non-surgeon doctors make is limited (thanks to market dynamics), the only way they can make sure they earn a decent living is by limiting supply. Could this be one reason India is under-supplied in a lot of non-surgical doctors? Again this is pure pure speculation, and not based in any fact.

Continuing with conspiracy theories, even for doctors who are surgeons, the only way to make a certain income is to have a threshold on the ratio of surgeries to consultations. And if this ratio (surgeries / consultations) goes too low, the doctors’ income suffers. Again, hippocratic oath aside, do hospitals try to game this metric, based on the current incentives?

On a more serious note, this distortion in the hourly earnings for surgeries versus consultations is one reason that India is also undersupplied with good general practitioners (GPs). Because GPs don’t do surgeries (though the Indian system means they are all licensed to perform surgeries, to the best of my knowledge), their earning potential is naturally capped. So the better doctors don’t want to be GPs.

How can we fix this distortion? How can we make sure we have better GPs? Insurance cover for outpatient care is one thing, but I’m not sure it is the silver bullet I’ve been making it out to be (and it will come with its own set of market distortions).

This entire post is me shooting from my hip. So please feel free to correct me iff I’m wrong.

The World After Overbooking

Why do you think you usually have to wait so much to see a doctor, even when you have an appointment? It is because doctors routinely overbook.

You can think of a doctor’s appointment as being a free option. You call up, give your patient number, and are assigned a slot when the doctor sees you. If you choose to see the doctor at that time, you get the doctor’s services, and then pay for the service. If you choose to not turn up, the doctor’s time in that slot is essentially wasted, since there is nobody else to see then. The doctor doesn’t get compensated for this as well.

In order to not waste their time, thus, doctors routinely overbook patients. If the average patient takes fifteen minutes to see, they give appointments once every ten minutes, in the hope of building up a buffer so that their time is not wasted. This way they protect their incomes, and customers pay for this in terms of long waiting hours.

Now, in the aftermath of the covid crisis, this will need to change. People won’t want to spend long hours in a closed waiting room with scores of other sick people. In an ideal world, doctors will want to not let two of their patients even see each other, since that could mean increased disease transmission.

In the inimitable words of Ravishastri, “something’s got to give”.

One way could be for doctors to simply up their fees and give out appointments at intervals that better reflect the time taken per patient. The problem with this is that there are reputation costs to upping fee per patient, and doctors simply aren’t conditioned to unexpected breaks between patients. Moreover, lower number of slots might mean appointments not being available for several days together, and higher cancellations as well, both problems that doctors want to avoid.

As someone with a background in financial derivatives, there is one obvious thing to tackle – the free option being given to patients in terms of the appointment. What if you were to charge people for making appointments?

Now, taking credit card details at the time of booking is not efficient. However, assuming that most patients a doctor sees are “repeat patients”, just keeping track of who didn’t turn up for appointments can be used to charge them extra on the next visit (this needs to have been made clear in advance, at the time of making the appointment).

My take is that even if this appointment booking cost is trivial (say 5% of the session fee), people are bound to take the appointments more seriously. And when people take their appointments more seriously, the amount of buffer built in by doctors in their schedules can be reduced. Which means they can give out appointments at more realistic intervals. Which also means their income overall is protected, while still maintaining social distancing among patients.

I remember modelling this way back when I was working in air cargo pricing. There again, free options abound. I remember building this model that showed that charging a nominal fee for the options could result in a much lower fee for charging the actual cargo. A sort of win-win for customers and airlines alike. Needless to say, I was the only ex-derivatives guy around and it proved to be a really hard sell everywhere.

However, the concept remains. When options that have hitherto been free get monetised, it will lead to a win-win situation and significantly superior experience for all parties involved. The only caveat is that the option pricing should be implemented in a manner with as little friction as possible, else transaction costs can overwhelm the efficiency gains.

Half life of pain

Last evening, the obstetrician came over to check on the wife, following the afternoon’s Caesarean section operation. Upon being asked how she was, the wife replied that she’s feeling good, except that she was still in a lot of pain. “In how many days can I expect this pain to subside?”, she asked.

The doctor replied that it was a really hard question to answer, since there was no definite time frame. “All I can tell you is that the pain will go down gradually, so it’s hard to say whether it lasts 5 days or 10 days. Think of this – if you hurt your foot and there’s a blood clot, isn’t the recovery gradual? It’s the same in this case”.

While she was saying this, I was reminded of exponential decay, and started wondering whether post-operative pain (irrespective of the kind of surgery) follows exponential decay, decreasing by a certain percentage each day; and when someone says pain “disappears” after a certain number of days, it means that pain goes below a particular  threshold in that time period – and this particular threshold can vary from person to person.

So in that sense, rather than simply telling my wife that the pain will “decrease gradually”, the obstetrician could have been more helpful by saying “the pain will decrease gradually, and will reduce to half in about N days”, and then based on the value of N, my wife could determine, based on her threshold, when her pain would “go”.

Nevertheless, the doctor’s logic (that pain never “disappears discretely”) had me impressed, and I’ve mentioned before on this blog about how I get really impressed with doctors who are logically aware.

Oh, and I must mention that the same obstetrician who operated on my wife yesterday impressed me with her logical reasoning a week ago. My then unborn daughter wasn’t moving too well that day, because of which we were in hospital. My wife was given steroidal injections, and the baby started moving an hour later.

So when we mentioned to the obstetrician that “after you gave the steroids the baby started moving”, she curtly replied “the baby moving has nothing to do with the steroidal injections. The baby moves because the baby moves. It is just a coincidence that it happened after I gave the steroids”.

The cross-selling epidemic

Cross-selling is the phenomenon where you try to get more value out of your existing customers by selling them other things. And from the looks of it it is reaching epidemic proportions in India.

Yesterday a guy came up to me at the gym and asked me to try out some “power yoga” group exercise classes. I told him I wasn’t interested, and he continued to talk (I was on the treadmill so couldn’t run away). Of course my membership includes any group classes so I don’t have to pay more to do “power yoga” but the economics are not the same from this guy’s perspective!

Then for the last two weeks my gym (Gold’s Gym in Jayanagar) has been full of advertisements for protein supplements. And today some of their salespeople had even set up shop inside the gym hawking their stuff. From conversations I overhear in the locker room I know that several other members of the gym regularly take such supplements but the kind of advertising within the gym was way too intrusive!

Later today I had gone to visit a dermatologist (who I found via Practo) for a rash I have on my hand. The doctor seemed least interested in checking me and more interested in putting me through a battery of blood tests (which were done in the lab attached to the clinic). I don’t know why I went along but after becoming poorer by a thousand and three hundred rupees I figured that the tests included liver function and thyroid function test! Why a dermatologist would need such tests I don’t know! Anyway I’ll just pick up the reports tomorrow and run! Oh and when I was walking out the receptionist helpfully pointed out that I could buy the prescribed medicines at the little pharmacy also in the clinic! I refused an walked out!

A few months back I’d gone to my ophthalmologist for a routine checkup. After having got my eyes tested I asked him to check for my power on contact lenses also. He said he’ll do so if and only if I were to buy the lenses from his clinic! Since I’d found those lenses to be of poor quality the last time I’d got them, I scooted. Oh, and this guy has been my regular ophthalmologist for over twenty years!

This brazen cross-sell seems so suboptimal that it possibly drives away customers (but from what I hear, if every doctor indulges in such practices there isn’t much choice anyway!). I wouldn’t have minded paying an additional sum (over and above what I’d paid for my generic eye test) to get my eyes tested for contact lens power also. But this option (which would’ve worked out more simply for both of us) wasn’t available! Bizarre, I tell you!

Practo and rating systems

The lack of a rating system means Practo is unlikely to take off like other similar platforms

So yesterday I found a dermatologist via Practo, a website that provides listing services for doctors in India. I visited him today and have been thoroughly disappointed with the quality of service (he subjected me to a random battery of blood tests – to be done in his own lab; and seemed more intent on cross-selling moisturising liquid soap rather than looking at the rash on my hand). Hoping to leave a bad review I went back to the Practo website but there seems to be no such mechanism.

This is not surprising since doctors won’t want bad reviews about them to be public information. In the medical profession, reputational risk is massive and if bad word gets around about you, your career is doomed. Thus even if Practo were to implement a rating system, any doctors who were to get bad ratings (even the best doctors have off-days and that can lead to nasty ratings) would want to delist from the service for such ratings would do them much harm. This would in turn affect Practo’s business (since the more the doctors listed the more the searches and appointments), so they don’t have a rating system.

The question is if the lack of a rating system is going to hinder Practo’s growth as a platform. One of the reasons I would go to a website like Practo is when I don’t know any reliable doctors of the specialisation that I’m looking for. Now, Practo puts out some “objective” statistics about every doctor on its website – like their qualifications, number of years of experience and for some, the number of people who clicked through (like the doctor I went to today was a “most clicked” doctor, whatever that means), but none of them are really correlated with quality.

And healthcare is a sector where as Sangeet Paul Chaudary of Platform Thinking puts it, “sampling costs are high”. To quote him:

There are scenarios where sampling costs can be so high as to discourage sampling. Healthcare, for example, has extremely high sampling costs. Going to the wrong doctor could cost you your life. In such cases, some form of expert or editorial discretion needs to add the first layer of input to a curation system.

So the lack of a rating system means that Practo will end up at best as a directory listing service rather than as a recommendation service. Every time people find a “sub-optimal” doctor via Practo, their faith in the “platform” goes down and they become less likely to use the platform in the future for recommendation and curation. I expect Practo to reach the asymptotic state as a software platform for doctors to manage their appointments, where you can go to request an appointment after you’ve decided which doctor you want to visit!

Potential investors would do well to keep this in mind.

Update

Today I got an SMS from Practo asking me if I was happy with my experience. I voted by giving a missed call to one of the two given numbers. I don’t know how they’ll use it, though. The page only says how many upvotes each doctor got (for my search it was all in the low single digits), so is again of little use to the user.

Doctors and correlation-causation

One of the common cribs about the medical profession is that most doctors don’t have enough grounding in mathematics and statistics (subjects they typically don’t study beyond high school). Given the role of mathematics and statistics in medicine, in terms of gathering evidence, medical testing, etc. the lack of mathematical or statistical knowledge can have serious consequences in terms of interpretation of techniques and symptoms and all that.

In the field of statistics we have this adage that goes that we should “treat the disease and not the symptom”. This is no less true in the medical profession – let’s say that you have a bacterial infection which causes a fever, a poor doctor would diagnose your fever by taking your temperature, assume that it is the fever thanks to which you are sick and give you medication to lower the fever without realising that there is a “third variable” that might be causing both – your fever and your sickness. Thus, your fever might come down and consequently your sickness but both would presently appear.

I’ve had chronic pain in my heels for a few months now. It’s especially severe whenever I put my feet on the ground from a raised position. Someone had told me that it occurs due to calcification near the Achilles Tendon, and I must take medication for that. Having pushed it for a few months now I finally went to see my uncle who is an orthopaedic yesterday (this is the same guy who told me about my Boxer’s Fist).

He promptly diagnosed me with Plantar Fasciitis, and wrote down some medication, and told me what I need to do in order to reduce the pain in my feet. After a short conversation on what else I need to do, and any precautions, and all such, I asked him about the calcification thingy – whether he had ruled out that calcification of the Achilles Tendon was causing this problem.

“I’m sure there will be some calcification”, he said, “and I’m not sending you for an X-ray because I have a very good idea of what it will show and it won’t add much value”. And then he proceeded to explain that calcification is a “result” of plantar fasciitis and not a cause of it. He didn’t use the terms “correlation” or “causation” but he explained that when you suffer from plantar fasciitis you end up with both calcification of your Achilles Tendon and also shooting pain in your heels, especially immediately after waking up. The two are thus related, he said, but neither causes the other, but there is a third factor (fasciitis) that causes both, and that is the one that he is treating me for!

I was doubly impressed with him – first for understanding “information theory” in terms of understanding that the X-ray wouldn’t add much information, and secondly for recognising that there was a third factor and that correlation should not be mistaken for causation. Or perhaps I had a particularly low prior for mathematical and statistical skills of doctors!

Postscript

He refused to charge me a fee, since I’m his nephew. While on my way out I was thinking about it and wondering on what circumstances I would waive my professional fees for my consulting. And I realised it would be hard to do so for anyone! It made me wonder what made my uncle waive his medical fees, while I’m extremely unlikely to do that.

I realised it has to do with the investment. He spent about five to ten minutes with me (perhaps a bit longer), but essentially his marginal cost of treating me was quite low. And this was a marginal cost that he was willing to sacrifice in return for the goodwill he gets for treating the extended family for free. Considering the size of my engagements, though, the marginal cost is usually high and is seldom justified by goodwill!

Collateralized Death Obligations

When my mother died last Friday, the doctors at the hospital where she had been for three weeks didn’t have a diagnosis. When my father died two and a half years back, the hospital where he’d spent three months didn’t have a diagnosis. In both cases, there were several hypotheses, but none of them were even remotely confirmed. In both cases, there have been a large number of relatives who have brought up the topic of medical negligence. In my father’s case, some people wanted me to go to consumer court. This time round, I had signed several agreements with the hospital absolving them of all possible complications, etc.

The relationship between the doctor and the patient is extremely asymmetric. It is to do with the number of counterparties, and with the diversification. If you take a “medical case”, it represents only a small proportion of the doctor’s total responsibility – it is likely that at any given point of time he is seeing about a hundred patients, and each case takes only a small part of his mind space. On the other hand, the same case represents 100% for the patient, and his/her family. So say 1% on one side and 100% on the other, and you know where the problem is.

The medical profession works on averages. They usually give a treatment with “95% confidence”. I don’t know how they come up with such confidence limits, and whether they explicitly state it out, but it is a fact that no disease has a 100% sure shot cure. From the doctor’s point of view, if he is administering a 95% confidence treatment, he will be happy as long as his success rate is over that. The people for whom the treatment was unsuccessful are just “statistics”. After all, given the large number of patients a doctor sees, there is nothing better he can do.

The problem on the patient’s side is that it’s like Schrodinger’s measurement. Once a case has been handled, from the patient’s perspective it collapses to either 1 or 0. There is no concept of probabilistic success in his case. The process has either succeeded or it has failed. If it is the latter, it is simply due to his own bad luck. Of ending up on the wrong side of the doctor’s coin. On the other hand, given the laws of aggregation and large numbers, doctors can come up with a “success rate” (ok now I don’t kn0w why this suddenly reminds me of CDOs (collateralized debt obligations)).

There is a fair bit of randomness in the medical profession. Every visit to the doctor, every process, every course of treatment is like a toin coss. Probabilities vary from one process to another but nothing is risk-free. Some people might define high-confidence procedures as “risk-free” but they are essentially making the same mistakes as the people in investment banks who relied too much on VaR (value at risk). And when things go wrong, the doctor is the easiest to blame.

It is unfortunate that a number of coins have fallen wrong side up when I’ve tossed them. The consequences of this have been huge, and it is chilling to try and understand what a few toin cosses can do to you. The non-linearity of the whole situation is overwhelming, and depressing. But then this random aspect of the medical profession won’t go away too easily, and all you can hope for when someone close to you goes to the doctor is that the coin falls the right way.

Hospital Issues

There is one thing that I haven’t managed to understand about Indian hospitals – it is the dependence on patients’ attendants. Every patient is required to have an attendant next to him/her all the time. In case the attendant is going out, he/she has  to literally take permission from the nurses. Full time, it is the attendant’s job to monitor the patient and alert hte doctors/nurses in case something goes wrong. And the main job of the attendant is to bring medicines.

Yeah, you heard that right. Most hospitals here have attached pharmacies, and the usual practice is for the doctor/nurse to scribble down a prescription which the attendant has to fulfil from the hospital’s own pharmacy. I find this practice weird and ridiculous, and wonder why the hospital cannot short-circuit the attendant’s role and then finally bill the medicines to the patient along with the rest of the bill.

Over the last couple of weeks when my mother has been in ho0spital, I’ve found myself being woken up at all times – including 1 am and 5am to go get stuff from the pharmacy. Sometimes it’s been as trivial as a syringe. Usually it’s a much longer list. Such a long list that given the crowd at the pharmacy, it’s impossible to check if the pharmacist has given you everything he’s billed you for. And in the wee hours of Tuesday morning when there was an emergency and my mother had to be shifted to intensive care, the first thing the people there did was to give me an extra-long list of stuff to get from the pharmacy. This was at 3am.

I wonder why this practice came about, and why it still exists. Is it to facilitate easy transfer pricing for the hospital? Is it t give some sort of transparency to the patient about the medicines being given to him? If the latter, can’t the patient just sign on the prescription authorizing the hospital to procure the stuff from the pharmacy? And given the monopoly power that the hospital’s pharmacy has, service is usually slow and inefficient, thus leading to long queues. And in such scenarios, it’s not easy to actually check if you’ve received everything you’ve paid for. And on top of this, you have the hospital giving multiple prescriptions for the same non-consumable thing, maybe just hoping you don’t notice.

And then there is this thing about the attendants. Thankfully we have enough extended family here in Bangalore that it isn’t hard to find volunteers to do vigil at  the hospital when I’m away at work or other things. But what if we were in a place with no relatives around? Or if the patient were living alone in the particular city? How would the hospital handle this? Would they make the patient himself run around to get medicines?

Whenever I think about these things I tend to get extremely pissed off. The hospital has been otherwise good. The nursing staff are all very nice and never crib. The hospital is maintained extremely well and is clean in most places. There are enough duty doctors at all times. And then they expect an attendant to be with the patient. And the expect the attendant to run around all the time to fetch stuff from the hospital’s own pharmacy.