The limits of division of labour

Adam Smith made an excellent observation – that division of labour is the foundation of progress (productivity).

But there is a point at which division of labour becomes counterproductive.

I get my blood tested annually, as early indicator of potential health issues. 

In the past, I would walk into the doctor’s office early in the morning, the doctor would jab me and extract blood, stick my name on the tube, and off I’d go to work – in less than 15 minutes. 

Unfortunately, health management “experts” have decided to divide this work into two parts: (a) prescription for the test from the doctor, and (b) separate blood extraction by a nurse. This division of labour might sound well in theory: a doctor should do medicine, the nurse should do the extraction of blood.

But then reality hits. It saves the doctors time, but does it save the patient’s time?

The nurse’s chamber is located within the doctor’s clinic, but the nurse is dramatically slow. She takes at least 20 minutes to do things which the doctor used to take 3-5 minutes to do. And she’s barely competent. Last year (my first time with her) she couldn’t even locate my vein (which was starkly obvious to me) and jabbed me all over the place before finally extracting some blood.

As a result of this “division of labour”, productivity has increased for the doctor, but it has fallen badly for the society as a whole.

Why? Because it fails to factor (a) the transaction costs involved, and (b) the opportunity cost of patient’s time – whose time is often worth many multiples of that of the nurse.

I took a number and waited for 40 minutes while the nurse laboriously collected blood from a mere two people! My turn was next, but by then time was running out I had to leave for work, without getting the blood extracted. I’ll now have to look for another location where a nurse is hopefully more competent.

Unlike me, many busy people will simply not try again, and give up having an annual blood test. 

This division of labour has destroyed productivity and increased ill-health as patients decide to give annual check-ups a miss.

I have a feeling that given their monopoly clout, health managers have a strong tendency to discount patients’ time. Had there been more competition in this market for blood tests, more efficient ways would have been quickly designed. Inefficient, productivity-destroying “solutions” can only occur where government-mandated monopolies exist.

Read more at Sanjeev Sabhlok’s Occasional Blog-Economics

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