Clinical Practice Guidelines: The Warped Incentives in the U.S. Healthcare System

Abstract

The healthcare system is sick. The players are incentivized to maximize their own benefit and externalize their costs onto the other parties. This paper examines the warped incentives that underlie the system. The tort system, lacking expertise and slow to adapt, is unable to overcome cognitive biases to adequately solve the problems. Clinical practice guidelines could pose a solution, but not as they are currently developed. Guidelines promulgated by healthcare associations are infected by a web of conflicts of interest with every player in the industry. Government agencies, and their revolving doors, are underfunded and also subject to the industry's web of conflicts. Even if adequate guidelines could consistently be produced, state legislatures and courts have been unwilling and unable to substantially incorporate guidelines into the legal landscape. Lastly, this article proposes a private regulation regime that could be a solution which would align all of the players' incentives to society's interests.