I watched the Aaron Carroll video below, Pay for Performance. As you ought to know, because I write about him a lot, Carroll is a doctor and an healthcare policy experts — one of the few you ought to listen to, and one of the main people behind The Incidental Economist. And the video is about the effectiveness of paying doctors more for improved outcomes. For example, a doctor might be paid more for getting a patient with high blood pressure on medication. It sounds like a good idea — and one that would more than pay for itself.
The problem is that in general, it doesn’t work. The studies on it generally don’t show any effect and those that do are small studies that show modest and short-term effects. As Carroll points out, “pay for performance” also has a potential down side: it may turn medicine into a kind of libertarian dog-eat-dog world where doctors only do what is in their financial interest. I actually think this is the crux of the matter.
I don’t have the highest regard for doctors. I used to teach physics to premed students, and I’ve never really recovered. But even I admit that doctors generally want to do well by their patients. Sure, they value their over-compensated jobs, but they really do care. I even saw much altruism among my premed students. In fact, it is this altruism that shows the lie to the conservatives’ favorite healthcare “reform” idea: tort reform. The idea is that doctors over-treat patients to protect themselves from law suits. But studies have shown very clearly that such “reform” doesn’t work, because doctors tend to over-treat patients because the doctors actually care about the health of their patients and not because they are afraid of being sued.
So it isn’t surprising that doctors don’t treat patients better when you pay them more. They are already treating patients as well as they can. If you are really interested in the quality of care patients receive, reduce the case load of doctors so they can spend more time with patients. But of course, that would be too difficult and cost too much money, so we certainly aren’t going to do that! (Although note: American doctors make twice what they do in other advanced economies: France, England, Japan, Germany, Canada. If they were paid in accordance with international standards, they could spend twice as much time as they do with patients. But we can’t do that because the AMA is a powerful lobby and it doesn’t want more immigration of well qualified doctors into the United States.)
This all got me thinking about “merit pay” for teachers. I’ve always thought it was a really bad idea for the same reason that it is for doctors. The truth is that most teachers care very much about teaching their students. Again, if we really cared about improving education, we would do things that help the teachers like reducing class sizes, providing supplies, incentivizing continuing education. But we don’t. We do the easy things: give students standardized tests, deny teachers worker protections, and generally treat them like they are line workers at a manufacturing plant where the fastest worker gets a monthly bonus.
Alfie Kohn — my favorite education policy expert — wrote a great article on this subject over a decade ago, The Folly of Merit Pay. In it, he noted that schools have been implementing “pay for performance” schemes as far back as the middle 19th century. In each case, it failed. So things went back to the way they were until “reformers” forget about the previous failures. Try, try again! Because it just has to work. Economists tell us that incentives are all that matters. You want better teachers, pay them more! Well, sure. But what if pay isn’t the main issue:
In 2000, Public Agenda questioned more than 900 new teachers and almost as many college graduates who didn’t choose a career in education. The report concluded that, while “teachers do believe that they are underpaid,” higher salaries would probably be of limited effectiveness in alleviating teacher shortages because considerations other than money are “significantly more important to most teachers and would-be teachers.” Two years later, 44 percent of administrators reported, in another Public Agenda poll, that talented colleagues were being driven out of the field because of “unreasonable standards and accountability.”
Meanwhile, a small California survey, published last year in Phi Delta Kappan, found that the main reason newly credentialed teachers were leaving the profession was not low salaries or difficult children. Rather, those who threw in the towel were most likely to cite what was being done to their schools in the name of “accountability.” And the same lesson seems to hold cross-culturally. Mike Baker, a correspondent for BBC News, discovered that an educational “recruitment crisis” exists almost exclusively in those nations “where accountability measures have undermined teachers’ autonomy.”
That unhappy educators have a lot more on their minds than money shouldn’t be surprising in light of half a century of research conducted in other kinds of workplaces. When people are asked what’s most important to them, financial concerns show up well behind such factors as interesting work or good people to work with. For example, in a large survey conducted by the Families and Work Institute, “salary/wage” ranked 16th on a list of 20 reasons for taking a job. (Interestingly, when managers are asked what they believe matters most to their employees, they tend to mention money—and then proceed to manage on the basis of that error.)
As for the mid-19th century experiment:
But it isn’t just crazy educational liberal wackos like Alfie Kohn and me who think this. Marie Gryphon of the Cato Institute has noted a number of problems with the whole “pay for performance” scheme, including the way it incentivizes teacher cheating and favors teachers working in high income school districts.
Of course, maybe this is why we don’t hear so much about “merit pay” as we used to. Now the focus is on destroying teacher “tenure.” The main thing is that our solutions to educational problems should always be simple. But more important here is that both of these ideas for supposedly improving education have the result of making teaching a less appealing profession. Although as I follow the debate, that seems to be what education “reform” is all about. There doesn’t seem to be much concern about the children. It seems more about putting teachers in their place and destroying public sector unions.
What’s sad is that low paid teachers are very likely to fail in their efforts to protect their rights as workers and the ability to do their jobs well. Doctors, on the other hand, being wealthy will probably have no problem combating the equally harmful policy changes that are facing them. But that’s America!
And the la-hand of the Freeeeee!
And the hoooome, of thhhhhe, braaaave!
Note that money does matter as I’ve written about in the past. But there is an interesting disconnect in the education “reform” movement. People get upset when teachers go on strike, because the idea is that teachers ought to be willing to live in poverty because all they care about are “the kids.” At the same time, the “reform” movement wants to treat teachers as if they were the same as manufacturing line workers. The point is not that financial incentives don’t help; it is that they aren’t that important and that they certainly aren’t the silver bullet that will fix our educational system.