How could no one have foreseen the potential abuse and pitfalls of a system like this? Without even reading any further than "Giving Doctors Grades..." I immediately conjured images of a bunch of doctors huddled around each other saying, "I don't want that one." "Well I don't want that one either. My feedback is back at 85% and I can't risk another death screwing me over."
People did foresee it, but that doesn't mean the decision-makers decided against it.
Doctors knew that having hospitals professionally administered as a business would be a nightmare with lots of deleterious effects on patient care, but it's still how the profession has evolved.
The fact is that unless you personally know people who are familiar with a doctor's skill from a medical perspective, it is fundamentally *impossible* to tell if they're any good. And none of those people will talk outside their profession because it's a very private profession in a lot of ways.
I've known about surgeons with world-class reputations who were terrible in the operating room and others who don't have great reputations because they don't publish a lot but are amazing with patients or have amazing surgical skill. You just don't know 99% of the time, so you make the best decision you have with the information you can get. And if it's a major surgery, you don't go to whoever it is your HMO suggests you go to--you actually do some research and ask intelligent questions and consider options and get a second opinion on how best to proceed and reject a doctor who can't answer a basic question or is flustered at being asked and so on.
A neutral rating system is a good idea but it has to be able to normalize for the extent of the diagnosis, and that is a hard problem that apparently wasn't done well here. There are metastasized cancers that are curable and ones that are not, and a whole range of treatability, and lumping them into N3 or N4 after a certain point is going to discourage doctors from operating on harder N4s or harder N3's, for example.
You can also get a really aggressive cancer or the like that a good surgeon can tell under the microscope is incredibly aggressive, that needs to be treated quickly and radically, and the system is really bad about penalizing people for spending the money to do that because the system will say "it just fits into type X," an early-stage small cancer, for example.