Is the Business Model Worse Than the Professional Model? Becker

Posner has a good discussion of the shift in the organization of services in law and medicine from a traditional “professional” model to a more business-like model (especially in law). Have the higher incomes and apparently increased inequality of incomes in law and medicine during the past several decades, perhaps partly due to a shift toward a more business model, reduced the social value of the care provided to clients in these professions?

Medical patients and consumers of legal services may be badly served because the doctors and lawyers treating them are either incompetent or unethical. I believe that the low level of competence of many doctors and lawyers is the biggest source of bad medical care and legal representation. I will emphasize the changes in medical care since I am more familiar with the evidence in this field.

Many studies have shown sizable differences within the United States in the treatments provided for different forms of cancer, cardiovascular disease, and other diseases. Sometimes, differences in treatments are consistent with all the physicians and hospitals involved being competent, knowledgeable, and ethical because different approaches appear to have similar outcomes for patients. Often, however, some treatments are used even though quantitative studies show, and leaders in medicine indicate, that these treatments are unnecessary or decidedly inferior to best practice medical care.

Some of these incorrect or excessive treatments are motivated mainly by the monetary gain to doctors or hospitals, such as overuse of MRIs, or multiple use of triage facilities for a given patient on the same day. However, inferior or excessive treatments are often used because doctors misdiagnose a disease or condition, or because they are just not up to date on what are the best treatments for conditions they correctly diagnose.

The sharp growth during past several decades in the drugs and surgeries available to treat different diseases makes it harder than in the past for less competent doctors and hospitals to keep up with best practices. This is why one would expect the frequency of deviations from best medical practices to have grown over time, even when the distributions in the abilities and ethical standards of doctors and hospitals have not changed.

Have the deviations from best medical practice grown even faster than would be expected from the advancement in medical knowledge, perhaps because of a decline in ethical standards of doctors and hospitals, or the growth in medical specialization emphasized by Posner?  That is possible, although I do not know of evidence that assesses the changes over time in the ethics of doctors. Growth in medical specialization per se should reduce the degree of bad medical practice because specialists are more knowledgeable of advances in their field than are general practitioners. Specialization has increased over time mainly because of the growth in medical knowledge and the increased size of the medical market. This is why specialization has grown in all modern countries with very different ways of organizing the medical field, although its growth has been more extensive in the United States.

I will spend much less time on the legal profession because Posner has covered changes there very well. Lawyers involved in corporate or class action practices frequently earn a lot. That is not surprising since even slightly more competent lawyers can often make a large difference in the monetary gains from IPOs, mergers and acquisitions, and product liability suits.

Has the greater competition for lawyers by different law firms, the increased turnover of lawyers from the larger law firms, and other changes in the organization of the legal profession led to lower ethical standards by lawyers, or to a greater social waste of resources spent on lawyers? Any adversary system has “waste” in the sense that lawyers on one side of a dispute partly just offset the arguments put forward by lawyers on the other side. Perhaps that “waste” has grown over time as the stakes in corporate disputes have gotten bigger, and perhaps the adversary system is inferior to other types of approaches to resolution of legal disputes.

However, none of this implies that much of any growth in “waste” from legal disputes is due to the increased competition or greater turnover in the legal field.

Comments

[Neilehat]

As for the "waste" inherent in adversarial systems, the best legal advice is, "Mitigate don't Litigate". There are plenty of courses in "Conflict" Resolution that teach principles to avoid the use of Litigation and the Courts whenever possible. Only a poor Lawyer would take a case to Court when other approaches are available...