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  • Print publication year: 2020
  • Online publication date: May 2020

8 - Healthcare Waste and Corruption

from Part IV - Political Allocation in Healthcare


Ernest A. Codman, a surgeon at Massachusetts General Hospital, proposed back in 1910 that each hospital should track every patient to determine whether the treatment the hospital provided was effective (McIntyre et al., 2001). This ‘end result system of hospital standardization’ proposed by Codman was one of the first systematic attempts to assess the performance of healthcare activity. In modern terms, Codman’s idea was to understand the extent to which monies were spent on high-value care instead of low-value treatments. To his surprise, the assessment of resource allocation was not an activity that was particularly appreciated by hospital managers, given that it made their actions more transparent, which in turn reduced the room for opportunistic behaviours of different kinds, including waste (and corruption). As Codman puts it, ‘our charitable hospitals do not consider it their duty to see that good results are obtained in the treatment of their patients … It is against the individual interests of the medical and surgical staffs of hospitals to follow up, compare, analyze, and standardize all their results’ because (i) ‘perhaps the results as a whole would not be good enough to impress the public very favorably’; (ii) it is ‘difficult, time-consuming, and troublesome’; and (iii) ‘neither the hospital trustees nor the public are as yet willing to pay for this kind of work’ (McIntyre et al., 2001, p. 9). Codman was clear in identifying the conflict of interest for medical and surgical performance measurement. But it is not only the medical or the surgical staff involved that he thought would be exposed. In publicly funded systems, politicians in charge of funding or regulating health care have more room to manoeuvre the less transparent healthcare practices are, or the harder it becomes for the general public to have access to performance information and subject the hospitals to closer connections between spending and performance.