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04/10/2011

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It also discourages job turnover by employees because they have to obtain new coverage after changing employers or taking time off from work.

Xavier L. Simon aka Xavier

Christopher, for the record, I did see the distinction in your original post and I should have been clearer. My sole purpose with the last comment was to set the record straight on the facts as I know them. The problem you mention, on the other hand, is one of the toughest problems people have to face and for which there are no government solutions. That is why values play such an important role in my own model. It is also why I threw in the comment that “You should give that doctor the benefit of the doubt: it could well be that he considered a more honorable course of action to be that of giving his patients the time he knew he needed to dedicate in order to live by his Hippocratic Oath.”

I faced that problem numerous times when I was still active in business, and believe me it was the toughest balancing act that I ever had to face outside of the family. Obviously I have no clue what happened in the case of your doctor but I always hold back making judgments in such situations. As you say, and I agree fully, “There are other considerations, especially for someone who has built up a trust over decades with people in their community.” It is just that having seen how my own GP suffered in his last days because he didn’t have enough time to do justice to his patients that I had to mention what a tough balancing act that is, one deserving of comprehension.

Christopher Graves

Yes, I agree with you, Xavier on the difficulty in balancing legitimate self-interest, responsibility to those who are suffering who have become dependent on a doctor in more ways than clinical medical care, and the doctor balancing time and energy among patients. Many ethical decisions involve questions of this sort. That is why I am drawn to virtue theorists such as Plato and Aristotle for insight into these kinds of dilemmas.

I think that there was a slide that government involvement in health care started that perhaps has led us to these kinds of troubling cases becoming more unbalanced in the way they are addressed by medical professionals and institutions. When people paid out-of-pocket for most of their medical services, doctors did not attempt to jack up the prices to take advantage of people who were in a vulnerable position. There was very likely some price discrimination that allowed the doctor to charge those who could afford it more to compensate for treating those who could not afford the regular prices. While the doctor benefited from this pricing strategy to some degree, in most cases, it was not a ruthless attempt to "shake-down" the patients. Again, there was a balancing act at work, but, as far as I know, it was not exploitative of the patient.

Then we got employer provided private insurance for a broad range of medical services (which was instituted as a way to evade wage controls in WWII) followed by Medicare and Medicaid. These trends lessened the personalistic quality of medical care. Doctors, clinics, and hospitals felt free to drop the balancing act that we both have been referring to and proceeded to charge all that they could get. Afterall, it was faceless, impersonal institutions that were being billed. Why not get what you can? As a response to this problem, these government and insurance companies instituted forms of price controls that create shortages and other distortions in the market. That is why reducing the role of third party payers is an important aspect of reforming our payment system for our medical care.

But now, it seems, that this mindset of doctors and clinics charging what the market will bear is beginning to shift to include the patient in addition to the large institutions. That is what I see at work in the experience that I described above. Doctors and clinics have become used to the larger income from the third party payers and are looking to make up the difference from somewhere and that somewhere is us. The third party payer system raised their expectations and it is hard for the medicals pro's to adjust. If we had a real market all along with people directly paying for most of their regular medical care, prices would be much lower than they are now with doctors and hospitals retaining the ethos of balancing their own needs and desires with those of their patients rather than attempting to max out their income. So, it is governmental intervention that created this imbalance. And if government involvement continues, even as it does under the Ryan Plan although the Ryan Plan is an improvement, these imbalances will continue.

Xavier L. Simon aka Xavier

Exactly Christopher; for many years I have been studying the process of evolution you describe, which is an integral part of change and development. Elsewhere I have written how “progress,” by which I mean increases in the carrying capacity of societies, happens through specialization and economies of scale. These require the continuous development of new mechanisms for coordination and rules for achieving it, rules that need to be tested, adapted and disseminated before they are fully effective. The material part is easy to see and explain. The related values and cultural norms are an entirely different story. On the whole I think the material components are growing much faster than societies are able to adapt their values and cultures, including their governance capacities, and that is why I think history shows that every society eventually collapses.

My interest has been from the perspective of less developed societies, but I have observed that the process, at least the process I’ve come up with, seems to apply everywhere (that is why I zeroed in on the particular process). All countries, institutions, and agglomerations of people develop a culture of their own. That culture very much determines how people behave in that particular environment. In the US there have been major cultural changes over time, particularly since the Industrial Revolution reached its shores in the 19th century and then with the start of the Progressive Movement in the 1910s. It then accelerated dramatically in the 1960s. I am still trying to understand that last change but I think it is what created the current chasm between urban and nonurban, left and right, Democrat and Republican. They have become two entirely different cultures with a completely different worldviews.

In the medical dimension I have been observing fascinating changes. It began when I had a heart attack 15 years ago. By pure luck I drew the head of cardiology as my doctor—he was on duty. He had just come from the Mayo Clinic. My hospital was very dysfunctional and to this day it remains so when coordinating specialties; they haven’t developed a good system of rules and a culture to make it work. Today I still have problems getting my various specialists to talk to each other, and they are all in the same building. My cardiologist eventually gave up and went back to the Mayo Clinic. Yet before he did he exhibited an entirely different behavior and method of operation. For him coordination and collaboration was everything, and I benefitted from it. At one point I had to have a procedure done and to my amazement he showed up to observe and, I suppose, consult and contribute if necessary.

The Mayo Clinic works well, my hospital not yet although it is finally in the black. In those fifteen years it has gone through various managements. The most recent is by MedStar, a large conglomerate, the very kind that supposedly will now help improve medicine and reduce costs—once the government learns how to tailor incentives correctly, and for which they are launching various pilot programs—under the new healthcare law. Since MedStar there have been notable improvements but mainly to the administration side, including a central data base for each patient. Doctors, however, still don’t coordinate well (they normally don’t even look at the work and conclusions of other specialists; I get printouts where I underline stuff I want other doctors to see).

Getting my hospital to operate like the Mayo Clinic is going to be a very major challenge. I used to be a manager and one of the toughest, if not the very toughest challenge was to change and mold a corporate culture to the demands of new technologies, products and client needs. I could make it work in small groups but taking it to anything over 20 to 40 people was nearly impossible and often required getting rid of many of the old timers, not a very pleasant prospect especially when you are weighing loyalty to a company with changing needs (at the hospital I’ve noticed that the departments that work better have all new faces after many failed tries with the old ones).

It is tough, tough, tough and probably the source of much of our societal resentments. That is why above I mentioned that material change is much easier to adapt to and get right, and can thus move much faster than adapting to the new values and cultures required by change. Over the years I have developed a good understanding of the process—parts of it are currently breaking down quite seriously in our society—but how to fix it is another matter. At least I think I know what needs to be worked on and maybe even how but I still need to finish writing it all up.

PS. Changing a corporate culture takes a lot of “nonproductive” time and money. The only successful one that I know of and have studied is also the only big bank that fared well in the recent financial crisis, JP Morgan Chase. Its CEO, Jamie Dimon, didn’t get caught up in the mortgage and derivative frenzy because according to him it just didn’t smell right and wasn’t adding value. He even took some derision and lost a few clients. Many years ago I worked for the man, Lew Preston, who created that discipline when it was JP Morgan. He was a tough ex-marine with a very deep sense of values and of doing right by other people and the community. Rather than fire people he retrained them; sometimes he practically shutdown the bank and turned it into a school where the new direction and values were deeply inculcated on every employee (note that in the more effective armed forces more time is spent training and creating a culture than in any other organization). It paid of many decades later.

At least in some part the financial crisis was the result of innovation moving much faster than even the specialized culture of the banking community was able to absorb. This innovation was a specialization of risk. Derivatives broke risk down into its various components which were then sold to people who supposedly could use them to hedge an opposing risk. In the 90s my unit trained bankers in emerging economies and the experts used to tell me how very dangerous derivatives were because other supposed experts didn’t really understand them. I have to admit that despite my various degrees I still don’t understand many of them myself. I still see articles by mathematicians disagreeing with each other on some of the inherent risks. This has been a clear case of specialization moving much faster than man’s capacity to assimilate its characteristics and learn how to manage them. And I believe that we are not yet out of the woods; it is one reason why I want large banks broken into smaller banks.

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Harold Helbock

I do not think that personally paying for insurance will improve patient scrutiny of health care spending and therefore will not reduce the rate of rise of medical costs. While patients will have to pay for, and therefore by disinclined to purchase uncovered items, they will agree to any expense that their insurance covers. To even begin to make this work there must be high deductibles with health savings accounts or some similar idea.

As an aside I think that "preventative medicine" is the big hoax of the 21st century. In 45 years practicing medicine I don't think I (or to my knowledge any of my colleagues) have ever gotten anyone to make major life changes (quit smoking, lose 50 pounds, quit drinking, give up drugs) despite many hours of "counseling". All this idea will do is increase costs by funding a whole new group of "providers" who will claim that they are unsuccessful because they have inadequate funding. No doubt these new "preventative medicine providers" will produce some "data" to show that for every dollar spent on "preventative medicine" the tax payer saves $100.

Jack

"As an aside I think that "preventative medicine" is the big hoax of the 21st century. In 45 years practicing medicine I don't think I (or to my knowledge any of my colleagues) have ever gotten anyone to make major life changes (quit smoking, lose 50 pounds, quit drinking, give up drugs) despite many hours of "counseling""

.... Interesting. Do we need to do more research to learn more about why folks drink too much and why we have an obesity epidemic?

Among my suspicions, having seen some info on cattlemen NOT cutting back on bovine growth hormone 30 days? before slaughter? Or? as most EU nations don't allow the stuff anyway, is that crap getting into heavy meat eaters? Also, we know there is a link between poverty and obesity; cheap fast fried foods etc. Should we let our corps profit from foods not conducive to human health??

In auto insurance we've discounts for safe drivers and penalties for those who speed or crash too often. If we are to be good citizens in an insurance pool or single payer group, should we get into similar incentives/reminders in H/C? I suppose it might not fit well with "fee for service" as docs might fear losing customers were they to rat them out to the insurance carrier.

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you know with that amount of people, who would pay for the healthcare cost????

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A much bigger problem is presented by the expected growth in government spending on medical care and retirements during the next several decades.

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Do you think that paying primary care physicians more will get better ones or do you agree with your recent WSJ article that paying judges more will not get better judges? After all, human nature is human nature.

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Correct me if I am wrong, but didn't Ryan just drop his voucher plan?

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