Goodhart's law

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Although Goodhart's law has been expressed in a variety of formulations, the essence of the law is that once a social or economic indicator or other surrogate measure is made a target for the purpose of conducting social or economic policy, then it will lose the information content that would qualify it to play such a role. The law was named for its developer, Charles Goodhart (a chief economic advisor to the Bank of England).

Point 11

(a) Eliminate work standards (quotas) on the factory floor. Substitute leadership.

(b) Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.

— Deming, W. Edwards., The Essential Deming: Leadership Principles from the Father of Quality (p. 141). McGraw-Hill Education. ISBN 0071790225

Origin

The law was first stated in a 1975 paper by Goodhart and gained popularity in the context of the attempt by the United Kingdom government of Margaret Thatcher to conduct monetary policy on the basis of targets for broad and narrow money, but the idea is considerably older. It is implicit in the economic idea of rational expectations. While it originated in the context of market responses the Law has profound implications for the selection of high-level targets in organisations.

It has been asserted that the stability of the economic recovery that took place in the United Kingdom under John Major's government from late 1992 onwards was a result of Reverse Goodhart's Law: that, if a government's economic credibility is sufficiently damaged, then its targets are seen as irrelevant and the economic indicators regain their reliability as a guide to policy.

Alternate Expressions

  • A risk model breaks down when used for regulatory purposes. (Daníelsson, 2002)
(Daníelsson formally labels this a corollary of Goodhart's Law.)
  • Goodhart's law is a generalized social science expression of the more well-known and economic-specific Lucas critique.

A related dictum is Campbell's Law:

The more any quantitative social indicator is used for social decision-making, the more subject it will be to corruption pressures and the more apt it will be to distort and corrupt the social processes it is intended to monitor.[1]

Examples in healthcare

Physician's role

While improving compliance with guidelines may improve patient outcomes[7], physicians have an ethical responsbility to balance care of the individual patient and the population health[8][9][10].

Tactics to avoid harm from Goodhart's Law

The RAND's Assessing Care of Vulnerable Elders (ACOVE Project) proposes[11]:

  • Balancing measures such as adding to a quality measure for blood pressure control a quality measure for assessing otherstatic hypotention
  • Adjusting measures for life expectancy rather than absolute age and consideration of "Lagtime-to-Benefit"

Other approaches:

  • The N-of-1 trial[12][13]
  • Goals should not be viewed as invariable[14].

See also

External links

  • Goodhart, C.A.E. Monetary Relationships: A View from Threadneedle Street in Papers in Monetary Economics Volume I, Reserve Bank of Australia, 1975
  • K. Alec Chrystal and Paul D. Mizen, 2001, Goodhart's Law: Its Origins, Meaning and Implications for Monetary Policy
  • Daníelsson, Jón. "The Emperor Has No Clothes: Limits to Risk Modelling." Journal of Banking and Finance, 2002, 26, pp. 1273-96.

References

  1. ↑ Campbell, Donald T (1979). "Assessing the impact of planned social change". Evaluation and Program Planning. 2 (1): 67–90. doi:10.1016/0149-7189(79)90048-X.
  2. ↑ Walter LC, Davidowitz NP, Heineken PA, Covinsky KE (2004). "Pitfalls of converting practice guidelines into quality measures: lessons learned from a VA performance measure". JAMA. 291 (20): 2466–70. doi:10.1001/jama.291.20.2466. PMID 15161897.
  3. ↑ Saini SD, Vijan S, Schoenfeld P, Powell AA, Moser S, Kerr EA (2014). "Role of quality measurement in inappropriate use of screening for colorectal cancer: retrospective cohort study". BMJ. 348: g1247. doi:10.1136/bmj.g1247. PMC 3935739. PMID 24574474.
  4. ↑ Lee SJ, Boscardin WJ, Stijacic Cenzer I, Huang ES, Rice-Trumble K, Eng C (2011). "The risks and benefits of implementing glycemic control guidelines in frail older adults with diabetes mellitus". J Am Geriatr Soc. 59 (4): 666–72. doi:10.1111/j.1532-5415.2011.03362.x. PMC 3764989. PMID 21480838.
  5. ↑ Radomski TR, Huang Y, Park SY, Sileanu FE, Thorpe CT, Thorpe JM; et al. (2019). "Low-Value Prostate Cancer Screening Among Older Men Within the Veterans Health Administration". J Am Geriatr Soc. 67 (9): 1922–1927. doi:10.1111/jgs.16057. PMID 31276198.
  6. ↑ Walter LC, Bertenthal D, Lindquist K, Konety BR (2006). "PSA screening among elderly men with limited life expectancies". JAMA. 296 (19): 2336–42. doi:10.1001/jama.296.19.2336. PMID 17105796.
  7. ↑ Visser BC, Ma Y, Zak Y, Poultsides GA, Norton JA, Rhoads KF (2012). "Failure to comply with NCCN guidelines for the management of pancreatic cancer compromises outcomes". HPB (Oxford). 14 (8): 539–47. doi:10.1111/j.1477-2574.2012.00496.x. PMC 3406351. PMID 22762402.
  8. ↑ DeCamp M, Pomerantz D, Cotts K, Dzeng E, Farber N, Lehmann L; et al. (2018). "Ethical Issues in the Design and Implementation of Population Health Programs". J Gen Intern Med. 33 (3): 370–375. doi:10.1007/s11606-017-4234-4. PMC 5834965. PMID 29256088.
  9. ↑ Bogdan-Lovis E, Fleck L, Barry HC (2012). "It's NOT FAIR! Or is it? The promise and the tyranny of evidence-based performance assessment". Theor Med Bioeth. 33 (4): 293–311. doi:10.1007/s11017-012-9228-y. PMID 22825592.
  10. ↑ Baird AG (2014). "Just stick to the facts: remember Goodhart's law". Br J Gen Pract. 64 (623): 309–10. doi:10.3399/bjgp14X680305. PMC 4032009. PMID 24868064.
  11. ↑ Lee SJ, Walter LC (2011). "Quality indicators for older adults: preventing unintended harms". JAMA. 306 (13): 1481–2. doi:10.1001/jama.2011.1418. PMC 3285267. PMID 21972311.
  12. ↑ Kravitz RL, Duan N, Niedzinski EJ, Hay MC, Subramanian SK, Weisner TS (2008). "What ever happened to N-of-1 trials? Insiders' perspectives and a look to the future". Milbank Q. 86 (4): 533–55. doi:10.1111/j.1468-0009.2008.00533.x. PMC 2690377. PMID 19120979.
  13. ↑ Tanenbaum SJ (2012). "Improving the quality of medical care: the normativity of evidence-based performance standards". Theor Med Bioeth. 33 (4): 263–77. doi:10.1007/s11017-012-9226-0. PMID 22810580.
  14. ↑ Kuvaas, Bård; Buch, Robert (2018). "Leader-Member Exchange Relationships and Follower Outcomes: The Mediating Role of Perceiving Goals as Invariable". Human Resource Management. 57 (1): 235–248. doi:10.1002/hrm.21826. ISSN 0090-4848.

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