Mathias Binswanger – Nothing happens in the health system in an interest-free space

What does happiness mean? To what degree do financial incentives create deep-set contentment? What is the relationship between economics and the health sector? Mathias Binswanger, the author of Absurd Competitions (2010) and a member of the 2018 group of Sciana – The Health Leaders Network, spends his time in Switzerland debating the paradox of happiness with relation to income growth in the field of health care.

Binswanger examines what the goal of the economic system is and what motivates people to work from day to day. In essence, what are the economics of happiness?

He said, “The assumption in economic theory is that… people try to do things that make them happy, that make them satisfied. That means happiness is actually at the very heart also of economics because the main goal of most people is to lead a happy life.”

He questioned, however, why people in places which witness high economic growth and continue to get wealthier, cease to “become happier anymore once [they] reach a certain level… We do not actually live in a way to… maximise our happiness or improve our happiness. Instead, we are totally focused still on economic growth.”

Absurd Competitions sheds light on what he called “perverse incentives” inherent in the health care system, referring to artificially staged competitions. These attempt to spur performance measures by offering financial incentives.

Binswanger emphasised the ubiquity of economic interests, saying “nothing that happens in the health system happens in an interest-free space.” He added we often neglect this issue when discussing the ideal health system and ways to move forward. “It’s only better actually for the agents in the system if it somehow also pays off to that. There are also strong economic incentives not to do certain things and to do certain things… I try to raise also a bit the awareness for that, for these economic aspects.”

Health costs, Binswanger suggested, will only continue to climb in the coming years because the health system is already a dysfunctional market.
Binswanger highlighted there is a strong incentive to get as much treatment as possible because each player – hospitals, doctors, pharmaceutical companies, etc. – tries to maximise their own profits. Therefore, improving the system as a whole and taking care of patients’ needs becomes a secondary priority.

Bearing that in mind, Binswanger concluded with his own paradox: “How can we create an integrated system where we think again about the whole health system and not only about single players?”

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