Joel is basing his argument off the book "Measuring and Managing Performance in Organizations." In points out that in situations where the employee gains natural satisfaction from serving the customer, measurement often makes performance worse. The additional effort spurred by the measurement is offset by the distortion to the effort based on what is being measured. However, in the case of doctors, measurement is already taking place, and because it is highly distorted. Thus switching the measurement from number of procedures to increase in health would be a substantial improvement. It may, however, be even more of an improvement to pay a flat fee, regardless of the number of procedures.