The current environment for medical decision making: Alternative efficiency concepts and decision motivation

Health services delivery is rapidly changing in the U.S. and along with it the incentives and motives for making decisions about the use of services. This paper discusses the economic criteria for making good decisions from both individual and social perspectives. The position is taken that individual criteria for decision-making efficiency in health services is quite different from social efficiency criteria but the two perspectives can be viewed as complementary. These criteria are used to examine current developments in health services, including aggressively competitive managed care. The analysis concludes that current directions may be in conflict with both social and individual efficiency. Alternative public policies are required to alter motives and incentives such that decisions better meet the complementary efficiency criteria.Originally prepared for presentation at the Annual Meeting of the American Association for the Advancement of Science, Atlanta, Georgia, February 17, 1995, as part of the symposium Cognitive Interpersonal, and Societal Influences on Medical Decision Making (A. M. Isen and B. S. Moore, Chairs).