Surgery Center of Oklahoma Blog

Some random thoughts:

My youngest son played a song for me today from his iTunes account featuring the late, great Michael Brecker.  You can listen to it here.  I think that Brecker was the greatest sax player ever….period.  I trained as a classical musician in my younger days and always marveled at the technique that Brecker brought to the stage.  Brecker’s technique brought a prestige to jazz that had been lacking until his arrival in my humble opinion.  Until his arrival a classically trained musician might have said that while some jazzers had talent they lacked the technique required to perform the more challenging repertoire.  If you are looking for a more mellow sound listen to him here.  Talent and technique to burn.

Most economists study and adhere to economic “modeling.”  Those apostles of what is called the Austrian school reject modeling, as they subscribe to the subjective theory of value.  What that means, simply, is that something is worth what someone will pay for it and everyone is different.  A buddhist monk will place a different value on a Range Rover than a Wall Street banker.  To project future trends on the sale of Range Rovers without acknowledging this incredibly significant variable seems a waste of time to the “Austrian.”  Traditional economists will often times make fun of those of the Austrian ilk as math dunces, as their rejection of economic modeling must mean that they are not skilled in mathematics.  Right?  Wrong.  At an Austrian scholar’s conference I attended one year, the invited speaker (a brilliant, erudite Brit, if I recall correctly)  was making his pitch for modeling’s place in economics when young Guido Hulsmann (an apostle of the Austrian school and later author of an exhaustive biography of the brilliant Ludwig von Mises) pointed out a mathematical error in the Brit’s calculations on the Power Point slide.  Talent and technique to burn.

Physicians in academic centers often times look down their noses at the folks out in private practice as “adequate” but “greedy.”  Because academicians are salaried and aren’t paid for each patient they see, they “aren’t in it for the money like those greedy private practice guys.”  Somehow brilliance can only be found in an academic center, if you were to ask many of them.  I will not embarass the infectious disease doctor, or the pulmonologist, or the anesthesiologists or the surgeons or the emergency room doctor or the radiologist that I have known in private practice whose brilliance and dedication can only be described as….well…talent to burn.  I will name Dr. Jim Porter, though.

G. Keith Smith, M.D.

A physician with a high deductible health care plan recently tried to obtain a price for his son’s upcoming surgery (an outpatient procedure).  Read his blog about it here.  The local hospital quoted him $37,000.  A local ambulatory surgery center later quoted him $1500…and you thought I might be exaggerating the price differences out there!  It seems that the hospital needs a whole lot more money to not make a profit.  Anyway, the author of the blog asks the right question:  why didn’t his surgeon tell him about this $1500 alternative?  Could it be that the surgeon is a hospital employee?  Could it be that this hospital-employed surgeon has his marching orders and has been told to patronize his employer’s establishment, regardless?

I think this is a great example  of the breakdown of the doctor patient relationship caused by the hospital employing a surgeon.  ”Whose bread I eat, his song I must sing.”  People often times talk about the conflict of interest present if a physician owns a hospital or surgery center.  Once again, why is it that it is ok for hospitals to own doctors and not for doctors to own hospitals?  I think that this is a clear example of the obvious conflict created by hospitals employing physicians.  This creates the “cartelization” of the health care marketplace that distorts competition in a way that is hard to combat.

If he is not a hospital employee then I guarantee you he is not an owner in an outpatient surgery center, for if he had been, he would have picked up the phone and asked and promptly found out what the cost of this procedure would be.

The really bad news for the hospital that tried to rob this guy?  He is the CEO of Healthcare Blue Book, a pricing guide for those looking for a guide to what medical procedures ought to cost. He is a physician and also has a law degree.  Wrong guy to mess with maybe?

G. Keith Smith, M.D.

Check this out.  More interesting than the 6.7 million paid to the head of Kaiser (this name always cracks me up as HMO’s were invented in pre-fascist Germany!) are the salaries on the 9th and 10th pages of this report.  Charge nurses are making in excess of $275,000.  Where did these “not for profit” hospitals get this money?  We have gone over this before.  Not sure what wine to recommend when reading this.  Maybe it should be a scotch.  Oh well.  Think they have overdone the cost-shifting thing a bit?  Think their price for a hernia repair would have to be higher than that at my facility?  Think their administrator has a closet full of suits nicer than anything I have? Think that the Kaiser administrator flies coach to his “meetings?”  Think the administrator of Kaiser is a libertarian and will vote for Ron Paul?  Sorry, I’ve made you sick, haven’t I?

G. Keith Smith, M.D.

Check this out.  This is a great synopsis of Frederic Bastiat’s life and writings.  If you are wanting to read more, I highly recommend the 2 volume set called “The Bastiat Collection,” available from the Mises Institute (mises.org).  Also, the pamphlet called, “The Law,” available here is must reading to understand how the concept of property predates the concept of law and that law’s purpose, therefore, is to protect property, not to be used to rob people of their property.

The writer of the Bastiat synopsis suggests that the French should have provided a statue of Bastiat to stand next to the statue of liberty.  I couldn’t agree more.

G. Keith Smith, M.D.

P.S.  I recommend a Chateau Certan, 1996 Pomerol.  This bordeaux would be fabulous with the Bastiat synopsis.

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.