I am thinking of pairing blogs with music or wines or book reviews, three things I love. ”Foodies” pair with wines. Why not bloggers? There’s a guy in New York City who is pairing wine with his love for theatre (I think his place is called City Winery). I’ll try this occasionally and watch for feedback. ”You should read this blog with a Dunn Howell Mountain Cabernet…”….something like that. Let me know your thoughts.
G. Keith Smith, M.D.
Ever see a picture of Murray Rothbard? He is always smiling. Ever see a picture of Lew Rockwell? Same thing. These guys (Rothbard is deceased now) faced the truth, denied the bliss of ignorance and remained “smilers.” When I first started reading about the extent to which we had all been scammed by our own government, I found it irritating and disturbing….nothing to smile about. How then can these great libertarians be so happy? Are they people who always look on the bright side no matter? Like a friend of mine who once told me that the great thing about his horrible marriage is that he no longer feared death?
Rockwell wrote an article months ago that there was a joy and peace in knowing the truth, even if that meant that you were like a physician standing amongst those dying from the plague…at least you know why what’s happening is happening…there is a peace in understanding calamity. Armed with logical and correct thoughts, predictive power is enhanced and the uncertainty of “what’s next” is alleviated to some extent. John Nichols, founder of Devon Energy, is known to have said that “..the human mind can stand anything…the worst of news…except it can’t stand uncertainty.”
I think that is why Rockwell and others are always smiling. The lack of uncertainty, the predictability of world events provides a certain solace to them. There is also a faith in the power of the free market that no matter what government does in the short run, the market will rule in the long run and events will unfold as they should eventually. Great libertarian thinkers also seem to find morbid humor in various injustices. Some of the funniest things I’ve ever read were excoriating remarks from libertarian writers.
Joe Sobran: ..”if the Iraqis need a constitution, let them have ours…we’re not using it.” Also, “I will never forgive George Bush for making me miss Bill Clinton.”
Lew Rockwell: “..we have the stupid party and the evil party. Sometimes they get together and do something stupid and evil. That is called bipartisanship.”
Walter Williams: ”…when you hear that Williams’ guns are gone, you will know that Williams is dead.”
Postmaster General to Lew Rockwell on Bill Buckley’s “Firing Line”….”I haven’t read your writings or newsletter.” Rockwell responds,” …and you betray that.”
Walter Block:…sorry I can’t begin to repeat a fraction of the hilarious stuff from this guy!
P.J. O’Rourke: ”..if you think health care is expensive now, wait until it’s free!”
Will Grigg: ”…the show “Cops” is basically bootlicker’s pornography.”
Frederic Bastiat: ..on the definition of government: ”Government is the great fiction through which everybody endeavors to live at the expense of everyone else.”
Peter Schiff: ..”unemployment isn’t high enough…the goon in the white house still has his job.”
Yuri Maltsev: ”We pretended to work in the Soviet Union and they pretended to pay us.”
Hans Sennholz: heavy german accent…”..there are two ways to obtain wealth: work and robbery.”
Will Rogers: “Thank the Lord that we aren’t getting all of the government that we’re payin for!” Also..” ..two things you should never watch being made: laws and sausages.”
A surgeon I work with said in the operating room one day,”…I just paid off my mortgage and it feels good to finally own my house.” I said, “..don’t pay your property taxes and you’ll find out who really owns your home.” He was devastated and irritated with this truth. I thought it was funny.
Adopting the freedom philosophy is advisable if for no other reason than to put a smile on your face in this extremely troubled world. Please comment if you have other funnies that you’d like posted.
G. Keith Smith, M.D.
Breaking news: a bank bag carried in a car in Oklahoma City apparently came undone spewing $20 bills all over the place. Dozens of motorists stopped to scoop them up. The “scoopers” could now face felony charges. Charged with? Possession of stolen property.
How are the “scoopers” any different than those who accept government welfare payments? I don’t just mean the poor. The crony capitalists, the whole bunch at the trough who gorge on taxpayer dollars. They see the cash strewn everywhere and decided to….well…just pick it up. How is this different?
Often times I hear conversations about folks on welfare. I hear how they game the system. I hear about Medicare or Medicaid beneficiaries and how they game the system to their advantage. Legislation is kicked around to curtail this gaming. Those who are “picking the government money off of the street” are denigrated by power-hungry politicians trying to gain popularity. Florida welfare recipients are subjected to drug testing in order to receive their “benefits.” Entire political campaigns have been based on denying illegal immigrants’ children access to “public schools.” Government policy debates result in limits on the number of children for which a single mother receives support.
What a distraction. It is easy to ignore the original act of violence, the theft that occurred to put the money on the street in the first place, isn’t it? Focusing on the abuses of the system and denigrating those who have “figured out an angle” here and there is fluff. This distraction prevents focusing on the original premise posed by an adherence to property rights. Aid to the poor by individuals is called charity. Aid to the poor through “government” requires a violation of the property rights of individuals supplying the money. To paraphrase Walter Williams: it is one thing to give a hungry, cold women $20 out of your wallet for something to eat….quite another to have a government goon put his gun in your ribs for $100 so the women might get $20.
Leonard Read‘s writings (“Anything That’s Peaceful,” and others) have helped me avoid this distracting trap: focusing on the recipients of the loot. The idea of “reforming entitlement programs” ignores the initial theft and violent act required to finance the programs in the first place. Leonard Read and Frederic Bastiat regularly referred to taxation as legalized theft or plunder. Quite simply, theft is legal when government does it, and not legal when individuals do it. This is a basic philosophical tenant of good and limited government that forms the backbone of the great libertarian thinkers including Edmund Burke, Hume, John Stuart Mill, Thoreau and Thomas Jefferson, to name just a few: government cannot engage in acts that are considered criminal for individuals. This basic tenant has been ignored by our government for a long time. What Bernie Madoff did was illegal, but the much more massive Ponzi scheme, Social Security, is perfectly legal. Sticking a gun into the ribs of a liquor store clerk for their cash is illegal. Mugging tomorrow’s grandchildren to pay the current elderly’s medical bills is not.
Is possession of stolen property wrong? Of course it is. But I blame those who accept the legitimacy of the entitlement programs and support their continued existence more than those who scoop up the loot lying around on the street. I think that many times political arguments and debate are much farther downstream (and closer to the falls!) than they should be. Once property rights are violated, any subsequent discussion about distributing the loot seems pointless to me. I don’t care where the thief eats with money stolen from me. That I have been robbed in the first place is my primary concern.
G. Keith Smith, M.D.
Earlier this week I blogged in response to a blog from Bill Doherty (his real name is Bob but he called me Kevin). His challenge was “show me an example where market forces have lowered the price of health care and increased access.” My response was this. He then re-responded. He mocked my pining for the old days before Medicare, saying that life expectancies had increased by 17 years after Medicare was enacted. This logical error, wrongly connecting cause and effect, would disqualify “Bill” from a formal debate. There is a name for this error (post hoc ergo propter hoc, I think). This is like saying that mortality rates fell in my neighborhood once I moved in, therefore my presence here has helped the health of the homeowners. Or, alternatively, the General Motors bail out decreased unemployment, therefore bail outs are a great thing! Never mind the devastation done to the private sector by this robbery.
Watch this video of Thomas Sowell “owning” some smug kid between the 1 minute and 2 minute mark. Sowell fires back..”..compared to what?” That is the devastating question required in any discussion when an elitist know-it-all declares that some government program is a success. Who knows what the market might have created if left alone or if Medicare had never been enacted. Perhaps a better system that hasn’t bankrupted the country? Who knows. Who knows what might have been done with the money that was flushed down the General Motors commode other than give it to their union members. Remember this money was extracted from the private sector (you and me) because someone thought they knew better what to do with it than what you and I would do with it on our own. As Lew Rockwell has said, “you bought a Pontiac but didn’t take delivery of the car.” We will be paying into the bankrupt Medicare Ponzi scheme and not taking delivery of medical care as Canada-style rationing is imminent if major changes aren’t made.
“Bill” maintains that he is not a socialist. He believes in free markets that are properly regulated and adjusted by someone more knowledgeable and brilliant than the average consumer, probably some “disinterested” committee or group in D.C. Oh well. I would be more cordial except this is the type of fellow legislators in D.C. have been listening to and the topic is much too important to allow this socialist tripe any credibility at all.
G. Keith Smith, M.D.
Here’s a good one:
A local not-for-profit hospital has been in a physician hiring frenzy. They recently added some gastroenterologists to their stable. They had to pay them a lot of money to get them to come over to the dark side. The hospital had this money because they have been very aggressive cost shifters. Anyway, having paid all of this money to these GI doctors they were anxious to get it back….you know…return on investment. The hospital found that they could charge about $1000 if the patients undergoing colonoscopy and other GI procedures were anesthetized rather than sedated. Use of the old tried and true Demerol and Versed cocktail just wasn’t going to be allowed anymore. If the GI docs were forced to use Propofol (Michael Jackson’s sleeping potion) the sedation (which can’t be charged for) could now be called an anesthetic (which can be charged for by the hospital). Bingo! $1000/GI procedure! ”We’ll get a one year return on our investment in two months!” Oh, and this doesn’t include the bill you will now get from an anesthesiologist (remember that’s what I do). Think the patients will be given a choice of sedative or anesthetic?
There are so many places to go with this story. Let’s settle for one. The cost of a colonoscopy at this hospital just went up about $1500 (the $1000 plus the bill from the anesthesiologist). Because this approach is safer? Better? Seriously? That will be the excuse. Anesthetizing the patients will somehow be safer than sedating them.
I’ll know this is a better and safer way to have a colonoscopy when the doctors that don’t have a hospital administrator’s gun to their head embrace this approach. This hospital is going to need to invent a lot more red ink to maintain the fiction of their not-for-profit status if they keep this stuff up.
G. Keith Smith, M.D.
As a non-historian I am going to give the following a shot. Two of the most brilliant thinkers that ever lived were Francis Hutcheson and David Hume. There is not enough space in a lifetime of blogging to begin to scratch the surface of just one of these guys. They are thought of as two of the most influential forces in the Scottish Enlightenment. Their writings were probably the primary political influence on the group of men thought of as the founders of the U.S.
Hutcheson believed that man as an individual and left to his own devices was a “natural cooperator,” and that the quality of his neighbor’s life was of paramount concern to him (this is terribly, almost offensively simplified but you get the message). This is a radical, anti-state message that has been used to downplay the importance of state intervention in human affairs. Hume was more skeptical and believed that man would act in his self interest, no matter what the effects on society or his fellow man. He believed that cooperation between men and therefore peace and prosperity were not a natural consequence of human beings living together. These two men regularly debated openly in Glasgow before a dazzled crowd. The eloquence and force of their arguments were unmatched except by each other. The ideas these men were kicking around and advocating were earth-shaking and had consequences that neither at the time could possibly imagine. Sir Walter Scott was reportedly mesmerized by the intellects of these two philosophical giants sparring in the pubs of Glasgow.
Enter a third individual. Adam Smith. Smith was an admirer of Hume and had actually been a student of Hutcheson. Smith, now famous as the author of “An Inquiry into the Nature and Causes of the Wealth of Nations,” settled the argument. He argued that Hutcheson and Hume were both correct. My apologies for the simplistic conclusion here. He argued that left to his own devices man would act in his own self interest and that this promotion of one’s self interest improved the condition of his neighbor. He argued that the realization of one’s self interest in a free society didn’t occur at the expense of the neighbor but actually promoted the neighbor from his previous condition. This was radical stuff. Up until this time, the idea was that wealth could only be acquired through pillage and conquest, leaving the source of the goods or services diminished to some degree.
Economic exchange between free individuals suddenly became another matter entirely with this new, enlightened line of thought. Men would simply not exchange money for goods, or goods for goods, unless it benefitted both of them to do so. This mutual benefit (both parties in an exchange emerging better off than they were before) is the power of the free market and the birthplace of profits and capital. Walter Williams’ example of buying milk from the grocer is a great way to understand this. Simply, you say, “I want your milk more than I want my two dollars,” and the grocer says,”I want your two dollars more than I want this milk on my shelf.” You both walk away better than before or there would be no reason to make the exchange in the first place.
What’s the point of all of this? Neither party can know whether the anticipated exchange or purchase is worthwhile if no price is attached to the good or service. The lack of transparent pricing makes the exchange irrational…there is no way to even know if the purchase makes sense. This is the economics of health care currently. It simply doesn’t make sense. In addition, there are those who are throwing mud in the water to make sure that it doesn’t make sense so you can’t see how they are profiting from the irrationality.
Posting clear pricing (not some bait and switch gimmick) brings much needed sanity to the economics of health care. The market competition that forces suppliers or sellers to be better and more innovative brings prices down and pushes quality up. Only those who wish to embrace insolvency ignore market competition. Free competitive markets bring prices down. Every time. No exceptions. This is incredible news for the least fortunate in our society. Making health related purchases more affordable is the outcome of price transparency and market competition. Our wonderful government is focused, not on cost of care, but, rather the method of looting the taxpayer to pay for very expensive care. This wrong focus is due to the pressure of very special interests who stand to suffer greatly if price transparency is adopted.
Want to do what is best for the least fortunate among us? Allow the free market to flex its muscle in the health care arena and everyone will see that the wisdom of Adam Smith is confirmed.
G. Keith Smith, M.D.
Check out this blog. Pretty wordy, so I wouldn’t recommend reading the whole thing. Skip to the last paragraph and check out his question. ..”..Is there any example or evidence, within the U.S. or abroad, that shows that free market health care can work in driving down expenses and ensuring access without government regulation and subsidies?”
The essence of his blog is that there must be a middle ground: a compromise. Free markets by themselves are inadequate, he would say. But communism doesn’t work either. Can’t there be a third way, a third path? Isn’t Obamacare a third path we should support? And besides, there aren’t any examples of free market medicine driving down prices.
OK. Looks like fresh meat to me all of this talk. First, the author isn’t reading this blog. Duh! Second, he has reminded me of a famous story about Ludwig von Mises. When Mises was asked a similar question about a third path of regulated free markets he said there was indeed a third path “…and it leads directly to the third world.” Honest economists call regulated markets “economic fascism” where property is owned privately but heavily regulated by the state. This is very similar to what was called “mercantilism” centuries ago.
That this author is not able to imagine a free market in health care doesn’t mean that it is not possible. This is more an indictment of his imagination than a free market health care system. But then, I am being too kind. What does this guy think our system of health care was like prior to the Ponzi scheme Medicare was enacted? Medicare was what drove prices so high that private health insurance became necessary in the first place. The bill my mother has shown me for my birth in 1961 was about $50. An elderly, retired orthopedist here in Oklahoma City has told me that a hospitalization for a hip fracture with its repair was under $300 in the 1950′s (even adjusted for inflation this is significantly cheaper than today’s cost). No one had insurance. People and/or their families paid these bills and physicians and hospitals couldn’t bill exorbitant amounts because people and their families paid these bills….not insurance companies, certainly not the government.
The author should visit our website. He should perhaps watch this video of my recent visit to D.C. The author’s socialist leanings are unfortunately what the policy makers in D.C. have been exposed to for many years. His blog sounds as if it could have come from the hopelessly compromised AMA, having been purchased by Uncle Sam with the contract for printing code books. Maybe the free market message will get a fair hearing and more will come to know the real life example of how the free market in medicine is currently working at our facility. I anxiously await his challenge to our model: ”…yeah, yeah…but what about the poor?” OK. I promise to write about that even if he doesn’t prod me.
G. Keith Smith, M.D.
Here’s a good one for you. A physician I know who continues to deal with Medicare discovered that he had been accidentally overpaid by them for a particular patient. He notified the Medicare carrier of their mistake and informed them that he would refund the overpayment promptly. He got a letter. The first paragraph acknowledged the mistake and recognized his refund as the solution.
Second paragraph. Ready? ”….this refund of the overpayment made to you does and will not protect you from future prosecution.”
This should help you understand why fewer and fewer physicians are willing to see Medicare patients. I’ve said before that it is no coincidence that Medicare is the only insurance company that has its own F16′s and tanks. The good news for the elderly is that as fewer and fewer physicians deal with Medicare, paradoxically more and more of them will be available to see the elderly. As Medicare unwinds due to its inevitable bankruptcy, the market will perhaps be allowed a chance once again in the delivery of health care to the current elderly. Don’t forget that Medicare and the concept of health insurance is a fairly new thing. In the 1950′s surgery for hip fractures and C-sections for child birth were very affordable events, the payment for which came directly from the patients or their families and without the involvement of insurance at all.
The return to rational pricing in health care is a real possibility, I believe. The market must be given a chance, though. The introduction of market discipline into this economic health care mess begins with transparent pricing. If you are following this blog, you know that is exactly what we are trying to do here at our facility. As we attract more business, our competitors will be forced to offer price transparency, not because of some government mandate, but because the harshest disciplinarian of them all, the free market, will force them to post prices or lose all of their business to those who do. As prices fall and the quality of care improves (both natural consequences of competition) the fear of bankrupting medical bills will begin to subside and the importance of insurance for health care will begin to fade.
This is all good news. It is particularly good news for the elderly and the poor, as without events unfolding as I have outlined above, the already scarce resources will be rationed out to fewer and fewer of the sick and more and more patients will go without care. This “good news” message was the one I recently delivered in Washington D.C. and was well received. This message is not good news for everyone, however. Those who profit from the current unsustainable scams and those bureaucrats who would need to find a new line of work are not pleased with what I had to say. The scams and shell games are finding fewer places to hide, though, and like it or not the market will deliver in spite of all the attempts to stop it.
G. Keith Smith, M.D.
HMO’s are trying to make a comeback. I guess those marketing these schemes to get rich denying care think that people’s memories are short. They may be right. Another nightmare making a comeback is the Physician Hospital Organization (PHO). These little gems are sometimes called something else, but essentially, hospitals lure physicians into thinking that if the two (doctors and hospitals) act together in contracting with the government or insurance companies, they will both be better off for having not acted alone. Several hospitals tried this in Oklahoma City back in the early 90′s, trying to capitalize on the physician’s fears of the Clinton Health Care Plan. When the dust settled these attempts to make the physicians SUCKERS! failed. In spite of the attempts by the AMA to make it a reality, the Clinton plan failed before any of these unholy alliances were finalized. It was clear afterwards that the physicians were seen as chumps by the hospitals and had these efforts been successful, the doctors would have found themselves trapped by a contractual arrangement that would have destroyed their independence and made the hospitals loads more cash. The doctors that nearly fell for this were angry. The brownshirt physician collaborators were vilified. And now….they are back. This collaboration between the hospitals and the physicians has taken two forms.
One hospital (let’s call them hospital #1) in Oklahoma City is aggressively hiring doctors. This will not end well for this hospital, as human nature being what it is, the hired doctors will not work as hard with a salary guarantee and relieved of much of their overhead. This will not end well for the doctors, as upon contract renewal, they will be offered half of their previous salary and find themselves saddled with a malpractice policy “tail” that is so expensive they can not realistically separate from the hospital. In addition, that part of their practice that was independent of the hospital will be gone, their entire patient volume originating from the “hospital network” referral doctors. They would also labor under non-compete clauses that would prevent them from practicing within a certain mile radius of the hospital and would probably be precluded from seeing any of the patients currently in their practice. Ok…I could go on but this is exhausting and I’m pretty sure you’ve got it by now.
Another hospital (how about hospital #2) in Oklahoma City is enjoying the influx of physicians that hospital #1 has run off. Some physicians, fed up with the aggressive physician practice takeovers by hospital #1 have simply left. Hospital #2, another large hospital, has taken a different approach. This, too, will not end well. This hospital has a few physician employees but has decided to revive the old PHO concept. Physicians are told that the hospital doesn’t want to hire them. They just want to work with them. You know…work together. ”Just agree to a few provisions in this contract and together we will all prosper like never before.” My advice to you if you are a physician and have been approached with a PHO offer is thus: look for your exit strategy…what my favorite lawyer calls your “punch out clause.” Start the conversation with the hospital administrator with a discussion of “…what if this doesn’t work out between us.” They won’t like that. You aren’t supposed to ask that. ”But it will work out,” they will say. Or ask,”..I think I hear what you are offering me but what is in this for you?” These are the types of questions that any businessman would ask but that physicians tend not to ask. You will be tethered and bound in some way. Your independence will be diminished. They will own some part of you, not unlike if you had succumbed to the offer of employment.
Hospitals #1 and #2 are both in the business of controlling physicians and their practices, they have just gone about it differently. The only ones who suffer more from these arrangements than the physicians are the patients with whom they formerly had an uncontaminated relationship.
G. Keith Smith, M.D.
We have had another first at our facility. A patient that found us through our website and had shoulder surgery about a year ago returned to have his other shoulder operated on. He was one of the most appreciative patients I have ever met. The closest bid he could find to our price….well, let’s just say it wasn’t even close. An internet patient return customer. Maybe I shouldn’t get so excited about each of the breakthroughs like this but I just can’t help myself.
Patients paying for their surgery directly and finding our facility through our website has picked up significantly in the last month. Someone told me in D.C. today that our prices were so low that people would be inclined to drop their health insurance altogether, a month or two of premiums being all it would take to pay for many of the procedures on our list!
Hat’s off to the surgeons and staff at The Surgery Center of Oklahoma. Together we may have ushered in a whole new level of competition in the medical marketplace with implications at the local and national level.
G. Keith Smith, M.D.
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