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Is public philanthropy evil?

Summary:
That lobotomies were an unsuccessful way to treat mental illness was known by 1941, yet lobotomies continued for thirty more years, mostly in public asylums.  Here's why: Because superintendents [those managing publicly funded asylums] received federal funding based on the number of committed patients rather than offering effective medical care, treating patients was a secondary matter.   [these superintendents]... sought low-cost treatment options. The lobotomy provided such an opportunity. Unlike the therapeutic or hydro and shock treatments available (all of which are still used today), the lobotomy was comparatively cheaper and did not take years to complete. It also frequently made difficult patients more docile and easier to manage. In contrast, private asylums, which also faced

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That lobotomies were an unsuccessful way to treat mental illness was known by 1941, yet lobotomies continued for thirty more years, mostly in public asylums.  Here's why:

Because superintendents [those managing publicly funded asylums] received federal funding based on the number of committed patients rather than offering effective medical care, treating patients was a secondary matter.  
[these superintendents]... sought low-cost treatment options. The lobotomy provided such an opportunity. Unlike the therapeutic or hydro and shock treatments available (all of which are still used today), the lobotomy was comparatively cheaper and did not take years to complete. It also frequently made difficult patients more docile and easier to manage.
In contrast, private asylums, which also faced overpopulation issues and treated the same patient demographics as public asylums, were funded by philanthropic donors and the patients’ legal caretakers. When patients failed to improve, were mistreated, or not offered sufficient quality of care, an asylum risked its profitability. Accordingly, using erroneous or excessively harmful treatment methods like the lobotomy would be detrimental to their bottom line.

QUESTION:  how would you better align the incentives of superintendents with the goals of patients (and their caretakers)?

HT:  MarginalRevolution.com

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