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.