Should dentists and lawyers be rotated, like auditors?

This is another post in our ongoing series on “behavioral ethics.” Prior posts in the series can be found here.

As a general matter, the professional relationships that expert service providers (e.g., doctors, lawyers, accountants) have with those they serve carry the potential for conflicts of interest, at least, where the provider’s advice can impact how she is paid.  Of course, we rely on providers’ professional standards of conduct to mitigate those conflicts.  Beyond this, we tend to think that having a good personal relationship with an expert provider will serve as a useful “inner control,” and steel the provider against the potential for COIs inherent in the very economic nature of the relationship.

Too bad that it apparently doesn’t work.

Among the many fascinating experiments discussed in Dan Ariely’s recently published The Honest Truth About Dishonesty: How We Lie To Everyone – Especially Ourselves is one that he conducted with Janet Schwartz and Mary Frances Luce showing that in the health care context long-term relationships between expert providers and patients actually contribute to more expensive – but not necessarily better – treatment.  (The study itself is available for purchase here.)    As Ariely says, this finding is surprising: “After all, if we have known our advisors for many years, wouldn’t they start caring about us more?”  But, he notes: “Another possibility… is that as the relationship extends and grows, our paid advisers – intentionally or not – become more comfortable recommending treatments that are in their own best interest.” And, on top of this, the study shows that “long-term patients are more likely to accept the [provider’s] advice based on the trust that their relationship has engendered,” diminishing a key external control that can protect against conflicts in such settings.

While the part of the study that is the focus on the discussion in the book concerned dentists, the logic of it would seem applicable as well to other expert providers, including – I have to assume – lawyers (like me).  Indeed, a study published by the Corporate Executive Board just a few weeks ago   about what corporations spend on law firms found “that while many general counsel assume that more work or longevity with a single law firm will earn them a discount, the opposite is true… as time passes they often pay higher rates to the law firms they work with most or have used the longest.”

From the perspective of the patient or client, these two studies confirm the wisdom of seeking second opinions in long-term relationships with expert service providers.  And providers – at least, those seeking to act in good faith (and in accordance with their professional standards) – should more closely scrutinize recommendations made to long-time clients/patients.