Asking people to potentially pay $100,000 for a $9,000 treatment seems unrealistic.
You’re right that the incentives can align when the numbers are right, but I suspect realistic numbers leave you with bad incentives.
You’re right that the incentives can align when the numbers are right, but I suspect realistic numbers leave you with bad incentives.
I mean, I think the real problem in misaligned incentives here is that there would be an incentive for the for-profit experimental treatment providers to keep things that should become mainstream "experimental" so that they could continue to charge for things that worked. But even so I still think my suggestion is better, at least for those paying for treatment, than the case in the story where people without medical expertise end up deciding to spend lots of money up front for treatments that explicitly are not generally accepted as effective by the medical community.
But there’s usually more than one doctor or hospital that can do a given treatment. And some of them will figure they’ll do better if they charge $10,000 up front instead. Would you still take the $100,000 option?
The only way I see it working is if the odds are very good. If there’s a 90% cure rate, paying a small premium for a cure in exchange for paying nothing if it fails makes decent sense. Any retailer with a generous return policy works this way, for example. This also helps the incentives to align: the loss from not handing out treatment will be much higher.
I think that this means the “I’ll pay you if I live” model is a great model for normal medical treatment. You get diagnosed with cancer that has a 50% cure rate? Set it up so you pay 2x if you’re cured and zero if you die, and you’ll help ensure you get the best treatment. You get diagnosed with a disease that will bear your name and your only hope is some crazy experimental treatment that has a 1% chance of saving your life? Going that route will just leave you stuck between death and bankruptcy.
In a way, this is a lot like my mechanic; Like I pay the mechanic mostly for doing stuff, like they are supposed to figure out what to do through the service manual (I joke that the biggest difference between fixing cars and fixing computers is that the manuals for fixing cars are a lot better)
We've already got paths to take if the doctor steps out of the conventional path and screws it up as a result.
My general feeling is that "experimental" and "alternative" treatments are going to have a lot of stuff that doesn't work at all mixed in; I mean, that seems unavoidable; if you know it works, it's not 'experimental' at all. and because it's outside of conventional medicine, I'm not protected from bad choices through that convention the way I am with conventional medicine. Therefore, it seems like changing the incentive structure is reasonable; there's no real guide as to what the right thing to do is.