I blog about free markets in medical care and transparent pricing.
I think it is hard to know what is true these days. One thing is definitely true for me though. I think that most people, myself included, can only take so much truth in one sitting. In my experience, freedom-minded thinkers tend to be independent thinkers and most of the time are open-minded, with a willingness to self-examine and change prior beliefs and thoughts that don’t pass the test of philosophical consistency. This type of mindset can lead folks to something called the truth, something to which ideologues of all stripes are often times blind. And drinking in too much truth too fast can breed unbridled cynicism and a sense of unbalance.
One of my favorite movie lines ever was from “V for Vendetta,” when the chief inspector, brilliantly played by Stephen Rea, asks his protege this question: ”..would you want to know?” In this scene he has reluctantly come to the conclusion that his own government cannot be ruled out as a suspect in the deaths of many of the citizens. He very carefully states that he has no proof, but rather asks that if it were true, “would you want to know?” I see his question now as an extremely well-mannered gesture, an opportunity given to the young protege to limit the pace of unpleasant ideas coming at him.
I think that for those of you who would answer “YES!” to the inspector’s question, you should remind yourselves how unsettling the nature of the truth can be. Believing, for instance, that the Unaffordable Care Act is crafted to line the pockets of various corporate interests, no matter how many are killed or neglected in the process, is not sunny picnic talk. After coming to this conclusion, I craved a P.G. Wodehouse novel for my own balance.
While the truth about the world around us is troubling and unsettling at times, the truth about freedom and liberty itself is always uplifting and buoyant for the spirit. The miracle of the free market has brought affluence to the human race like no other influence on the planet. Mutually beneficial exchange renders both parties wealthier. This tendency to improve your own lot by cooperating with others, while all parties pursue their self-interest, can certainly be soiled by the state, but the tendency and the truth of the nature and consequences of this interchange remain, nonetheless.
The more anger and vitriol I see from the statists, the more I know they are threatened by the growing appeal of the idea of less state coercion in our lives. The more desperate I see statists in their actions, the more I believe they feel their backs to the wall, their power threatened.
I am grateful to all of those whose personal examples have kept me from succumbing to skepticism and cynicism, that although to some degree necessary to survive in this world, can spoil the joy and laughter that an understanding of freedom brings. This is the balance that is difficult to maintain, I think.
In the arena of ideas, no one manages this better than Lew Rockwell, founder of the Ludwig von Mises Institute. Look at his picture on google. He is always smiling! He is funny, all the while having few peers as a hard hitting writer. During the few times I have been around him, everyone around him was laughing. I never met Murray Rothbard, but I understand that he had the same sort of influence on everyone in the room. He was, quite simply, hilarious, but as brilliant and incisive as any scholar of his time.
I suppose I am giving this advice as much to myself as to anyone reading this. Focus on the presence of liberty as much or more than you do on the suffering caused by its absence. The cause of liberty is always good news for those who wish to be free.
G. Keith Smith, M.D.
Thanks to the indefatigable Jeremy Snavely of the Association of American Physicians and Surgeons (AAPS) for filming and posting this video of my remarks to a group of AAPS members in Austin.
You can more closely follow the diagram with an explanation at the LewRockwell.com website, here.
G. Keith Smith, M.D.
Patrick McGuigan writes this piece about the Entrepreneurial Excellence in Oklahoma Award presentation this past Friday. Labor commissioner Mark Costello is running radio ads featuring our facility and once I have a copy of this I will post it for all to hear.
Commissioner Costello credited Dr. Lantier with introducing him to Austrian economics in his remarks just prior to presenting the award. Costello had no idea that I was headed out the door with two of my sons to the “Mises Circle” in Houston, just after the award presentation. When I spoke to Lew Rockwell in Houston about having received this award from the State and the Commissioner’s economic “Austrianism,” he said, “..that is shocking, and remarkable.”
The economists speaking at the Houston event seemed focused on the difficulties the current economic climate has created for entrepreneurs, true entrepreneurship becoming more difficult with opaque price signals and “regime uncertainty,” to use Dr. Robert Higgs phrase. I’ll blog soon about this Houston conference and how I think the information presented there applies to free market health care.
It is our adherence to the free market principles of the Austrian tradition that are responsible for our uncompromising business plan. These same principles have undoubtedly translated into a quality commitment coupled with rational pricing. I doubt seriously that another state’s labor commissioner has the foggiest idea what I mean by the last two sentences written.
Thanks to Pat McGuigan for attending the award presentation, his fine journalism and to all who attended the event. We are pleased to receive this award, particularly as it was presented by a proud “Austrian.”
G. Keith Smith, M.D.
Try to think of Obamacare as yet another bail out of a troubled industry. Many folks, financially able, had elected to forego the purchase of health insurance. This was due to the fact that in their minds as consumers, the value of the product didn’t match the price. Purchase of health insurance didn’t seem like a “win-win” deal. Part of the reason for the high price is that insurance companies had successfully lobbied to the gunvernment to mandate the coverage of certain services in insurance policies, services for which many people had no use. In other words, folks were forced to buy insurance policies that covered risks that were very unlikely to be encountered.
One could not buy a policy without coverage for mental illness, drug abuse, maternity care, etc. The consumer was no longer in control of determining the risk/benefit in the insurance product. One had to buy this coverage whether they wanted to or not. This, of course, drove the price of the health insurance policies through the roof, along with the profits of the insurance companies. Rather than adjust to this distorted market, more insurance mandates were issued. Fewer and fewer people found these policies to represent a value and therefore risked the position of the uninsured.
Enter the gunvernment into the market arena. Out come the guns. ”Let’s just force everyone to buy these awful insurance policies. Furthermore, let’s disallow policies like high deductible policies, that encourage consumerism in health care. This “first dollar” coverage will maintain premiums or even drive them to the stratosphere!”
Insurance executives have told me over the years that the current situation was unsustainable. What they really meant was that more and more people were abandoning their product, making a go of it on their own, rather than buying in. In most cases, this is a good bet, particularly for the young and healthy. If they were to save what they would have to pay for insurance premiums for a year or two, they could afford just about anything that human illness could throw at them. Not always, but almost always.
Even now, the price of an open heart surgery in Oklahoma City at a physician owned cardiac hospital (with outcomes as good as the big names) is $26,000. A total hip replacement? $18,000. A cervical fusion (including hardware) at my facility (easily over $100,000 at a typical “not for profit” hospital), $21,500. These numbers are very near one year’s insurance premiums in Massachusetts, home of Romneycare.
This increase in the price of insurance, in excess of the care it would buy, was going to lead to only one place: fewer and fewer people playing this game. Answer? Have the gunvernment make everyone buy this crap and put most of the companies (leaving only a few giants in business) out of business in the process, preventing the competition that would keep these corporations honest. Obamacare was nothing more than a bailout. The insurance companies were bailed out of a situation they had created with their gunvernment pals, one that did not bode well for them.
I like Thomas DiLorenzo’s term, fascialism. This combination of fascism and socialism perfectly describes the operation of this gunvernment, one which brings us crony capitalism coupled with massive wealth redistribution. We are left without the freedom to not buy something we don’t think we need. Think about that and what it means. Lew Rockwell has characterized the GM bail out in the same way. We basically all bought GM cars against our will but never took delivery. We were made to buy their cars with our money yet no car was in the bargain.
Obamacare is no different. We are all now forced to buy a product that many don’t need or want. The insurance products that we might want will not be allowed on the market as there is not enough profit in it for the insurance companies. Little health care will be available as the pressure to deny care in order to increase profits will be manifest soon enough. Pay against your will, coupled with a contract breach. That is the nature of a bail out and the nature of Obamacare.
G. Keith Smith, M.D.
Read this and you’ll understand why I love this guy. Rockwell’s uncompromising dedication and brilliance have elevated him to a higher level than any previous champions of liberty. Happy birthday to the Mises Institute! Congratulations, Lew.
G. Keith Smith, M.D.
My father once asked the noted economist Walter Williams at a speech given by Williams if people in Washington were ignorant or evil. Williams laughed and said,”both!” He added “arrogant” to his description. Lew Rockwell once wrote that “on the one hand we have the stupid party. On the other hand, the evil party. Sometimes they get together and do something stupid and evil. And that’s what is called bipartisanship!”
Time to give the politicians a break, though. Let’s rather turn our thoughts to Paul Krugman, a lessor economist, if you can even call him that and someone the Austrian economists think less of than Lew Rockwell thinks of most politicians. Mr. Krugman (he has a Ph.D. from MIT but as Walter Block has said, if recalls were ever in order this qualifies) has written a piece in the hopefully soon to be bankrupt New York Times on health care. He exhibits in the piece the same disregard for facts that have characterized his other writings. Here are some of his claims:
1) Uninsured people avoid the emergency rooms for fear of large bills and so they die. If the poor are avoiding the emergency rooms, why was health care for the poor in the emergency rooms bankrupting hospitals? This, of course, is also a lie. Otherwise, why is there a building crane in front of every big city emergency room I’ve ever seen?
2)Expansion of Medicaid saves lives. Oops. Wrong again. Makes you wonder if he’s wrong intentionally. This has been proven false by Professor June O’Neill, former director of the Congressional Budget Office, in her study.
3) “And surely the fact that the United States is the only major advanced nation without some form of universal health care is at least part of the reason life expectancy is much lower in America than in Canada or Western Europe.” Yes he really wrote this. This is actually a myth the advocates of “universal coverage” love to promote. Even if you believed this, could there be other variables at work?!
4) “So there’s no real question that lack of insurance is responsible for thousands, and probably tens of thousands, of excess deaths of Americans each year.” You’re beginning to get an idea of what a great economic “scientist” he is, aren’t you? Actually this has been studied by Richard Kronick recently and this entire idea has been completely debunked. You can read the abstract of his study here. His conclusion: ”The Institute of Medicine’s (a government-funded institute) estimate that lack of insurance leads to 18,000 excess deaths each year is almost certainly incorrect. It is not possible to draw firm causal inferences from the results of observational analyses, but there is little evidence to suggest that extending insurance coverage to all adults would have a large effect on the number of deaths in the United States.”
Now keep in mind that Mr. Krugman is the poster child for Keynesian economics, the economic thought that holds that an individual or a government can borrow its way to prosperity. It is this economic thought that has prevailed in this country for a long time, primarily because statists (like those in control of the government) love to spend the wealth belonging to future wage earners, as the future voter’s wrath represents no threat to them. Krugman, as a mouthpiece for this bankrupting insanity, bears a lot of responsibility, but instead of having lost all credibility, he is a liberal media darling. The central bank and deficit spending have no greater advocate than our dear Mr. Krugman (yes…I’m not calling him Dr. on purpose).
Here are some facts. A Medicaid card, rather than kept in a patient’s wallet, might as well be worn around their neck, a scarlet letter that precludes entrance into most physician’s offices. This card gives many, just like our Canadian brethren to the north, only a right to hope for care. Many physicians are curtailing their exposure to Medicare patients, as well, due to payment and regulatory hassles, threats of stiff penalties (including jail time for miscoded claims), and artificially low price controls. Physician “opting out” of Medicare is at an all time high. To put it rather bluntly and as Dr. Jane Orient has wisely said, “coverage doesn’t mean care.”
Think about it. If you have “insurance” coverage (whatever that means) and your insurance company decides that they don’t want to pay for a bone marrow transplant, or they set the payment for one so low that no one will do it (one and the same thing), you are not going to get a bone marrow transplant. Period. If the IPAB (Independent Payment Advisory Board) decides that the payment to a physician for an open heart surgery is less than anyone is willing to do it for, guess how many open heart surgeries will be done? Folks like Krugman will be in charge of deciding what these types of procedures are worth, not the market. Even more government involvement in health care is what he is advocating.
As I blogged the other day, 1.5 million individuals declare bankruptcy every year, 62% of which are for medical bills. 78% of those filing for medical bill reasons had insurance. These folks have “coverage.” Is this the security Mr. Krugman would bring to us all?
The brilliant Bob Murphy has challenged Krugman to a debate, an event Walter Block would characterize as the intellectual equivalent of taking candy from a baby. The equally brilliant economist William Anderson likens Krugman’s receipt of the Nobel prize as “an intellectual event matched only by the sacking of Constantinople in 1453.” His Nobel prize has afforded him a pulpit from which to spew his leftist vitriol, one the New York Times has been all too happy to provide, as their printing of this opinion piece would indicate. Maybe he’ll go away when The NY Times does.
G. Keith Smith, M.D.
P.S. Many thanks to the National Center for Policy Analysis for the links to the above refuting studies. You can read their review of Krugman’s piece here.
Ludwig von Mises adopted as his life motto a verse from Virgil: Tu ne cede malis, sed contra audentior ito. The translation is: Do not give in to evil, but proceed ever more boldly against it. His writings and his life reflect the extent to which he truly adopted this wisdom. His refusal to compromise, while closing many doors to him (and nearly costing him his life, as he was forced to flee Nazi Germany), has inspired some of the greatest thinking about economics and its relationship to human behavior. Lew Rockwell’s dream of an institute dedicated to the field popularly called “Austrian” economics, is named after Mises, no doubt signaling to all that compromise of principle would simply never be entertained.
I’ve always liked Mises’ motto, wondering what a world would be like where more people adopted this way of thinking. I ran into another saying this past weekend at the annual meeting of the Association of American Physicians and Surgeons (AAPS) that I wanted to share with you, no less powerful in my opinion, than Mises’ favorite quote from Virgil.
Principiis Obsta, Finem Respice. The translation is: Resist the beginnings, consider the ends. Interestingly the author, Publius Ovidius Naso, known as Ovid in the English world, was, like Virgil, a poet of Latin literature. This quote was revealed at the AAPS meeting as used by a former Nazi to describe the sequence of events in Germany that led to their fascistic insanity. Very small steps, unnoticed by most, led to the totalitarian regime we all now know well.
I think these two quotes have affected me because they are unfortunately applicable in our time. Bob Dole of Kansas was asked in a debate once if there was an issue over which he was willing to lose an election. His opponent was making the case for an absence of principle in Dole’s career. Dole simply did not know what to say. He, like almost anyone in politics or with power, chose victory and the maintenance or growth of their power and influence, over principle. It seems like people will say anything these days to gain power, knowing their future actions bear no resemblance to prior pledges and promises.
So what does any of this have to do with health care? Universal health care was the issue that eventually brought power to the Nazis. This is an extremely inconvenient fact for those promoting it. Countries that have embraced this insanity have wholeheartedly embraced rationing of care to the sick and euthanasia, as an individual’s health, rather than staying an issue for that individual, became a matter for the “state.” In Great Britain (a country Hayek warned in his Nobel prize winning “Road to Serfdom, was embracing the very economic policies of the Nazis they were fighting!) euthanasia has morphed into murder, as their Liverpool Care Pathway is used to “free up” hospital beds.
“But that can’t happen here,” you say! The Independent Payment Advisory Board screams otherwise. The data mining through electronic medical record systems screams otherwise. ”Meaningful use” and “best practices” cookbook medical approaches scream otherwise. Accountable Care Organizations, HMO’s by another name, scream otherwise. I think none of these small steps would have occurred had we heeded the advise from Virgil and Ovid.
G. Keith Smith, M.D.
Lew Rockwell described the General Motors bail out as follows. Imagine that you have saved enough money to by a car. After doing careful research you decide that you want a Toyota. Uncle Sam says, “NO!” ”You must buy a Chevrolet!” The funds are taken out of your account and deposited in the General Motors account. The catch? You don’t get a car!
I don’t like the use of “bail out” as a phrase that indicates a rescue of sorts. I prefer to think of “bail out” as ejecting from a burning airplane leaving everyone else on board to fend with the mess. Isn’t this what the GM bailout really was? ”What was seen” was GM continuing to operate. What was not seen was the robbery of the taxpayers and the ruin inflicted on those holding GM’s bonds.
“Bail out” can also mean scooping water out of a sinking ship or vessel. The key to understanding this use of the phrase is that the ship is sinking.
I think it would be more honest to start using the phrase “bail in.” This phrase would be more useful in that Uncle Sam’s role might be more clear as the distributor of money stolen from taxpayers to political or corporate favorites. Solyndra is a great example of a “bail in.” Your money and mine was “bailed in” to that poorly conceived black hole. We have involuntarily participated in countless “bail ins” for big banks over the years, institutions deemed “too big to fail.”
I have begun to think of Medicare as a “bail in” effort. Rather than declare this Ponzi scheme a disaster, voters over the years have tarred and feathered anyone suggesting even the slightest change in this program. ”Don’t touch MY Medicare!” ”I have paid in to this for many years and now I want my benefits!” The current Medicare beneficiaries receive their “benefits” not from money they paid in, but rather from money others currently pay and even money that future generations will pay. Medicare is being “bailed out” by bailing young people’s money in.
If a private company had Medicare’s balance sheet, it would be declared bankrupt, broken up and sold off and those that had put money into the organization would take their lumps, recognizing they had contributed to a failed enterprise and learned their lesson. However, as a government institution, Medicare has the power to bail the money of future generations in to this financial abscess, only to make the boil even larger. Cries from Medicare beneficiaries continue and the politicians respond just as you think they would, maintaining or increasing the benefits to this powerful voting bloc.
Some politicians paid a big price for voting for the various bailouts. I don’t see the difference between that and political promises to “save Medicare.” Placing Medicare in to receivership won’t be easy and can’t be accomplished quickly as too many folks have come to count on this program to provide funding for their health care. That said, I believe it is irresponsible and immoral to continue to present future generations with the current health care bills of today’s Medicare population. Is it possible to end the confiscatory “bail in?” Is it possible for a group of the elderly to endorse the end of the robbery of our young, and those struggling to make their own ends meet?
G. Keith Smith, M.D.
I’m writing this from Washington D.C., just having experienced the TSA experience many have come to know and love. The Association of American Physicians and Surgeons invited me to participate in a congressional briefing with Rep. Paul Broun, GA and I feel compelled to make a report.
Very few in power here have shunned the influence peddling that seems to go along with the job. Those who are principled seem a bit sad, much of their vigor gone with Justice Robert’s ruling.. Lost with Robert’s ruling was a real opportunity to roll back the commerce clause’s grip on states and on the federal overreach. The likelihood that a court challenge will occur again in our lifetime presenting this opportunity is remote, according to one legislator speaking to me. The beast of big government has the upper hand, like never before.
The beast is bankrupt, however. One libertarian congressional staffer told me openly that Medicare is going to vaporize whether this is politically palatable or not. The money coming in doesn’t remotely cover the anticipated expenses by as early as 2017. The implosion of this Ponzi scheme will be accelerated by the court’s decision to uphold the Unaffordable Care Act (UCA,) bringing fiscal insolvency to this program likely prior to 2017. Any legislator in office when that happens is probably finished. I found it interesting that there was more discussion about how to unwind or dissolve Medicare and Medicaid than how to reform this ill-conceived entitlement program.
The legislative “kick the can” approach, always leaving tough decisions and issues for the future legislators continues and will bring collapse and chaos to the medical arena and many others. So many corporatists have bet their future on loot from Uncle Sam to fund their various market-unworthy scams. These folks will soon be bankrupt and deservedly so. Hopefully, more bailouts will be politically impossible and these companies will be reorganized and sold off, cleansing the marketplace of this mall-investment.
What will happen after the government medical juggernaut hits bottom? We will have to fiercely oppose any “top down” solution that does anything other than remove all federal interference. I’ve come to some conclusions. Health care is not a federal issue. It is not a state issue. It is not a government issue at all, at any level. Making health care a government problem makes one’s health, another’s liability and begs for control, rationing and euthanasia, ultimately.
Health care is a service that physicians provide to patients utilizing whatever necessary resources are at their disposal to achieve the best outcome. That ‘s it, isn’t it? Anything that interferes with this process is the “issue.” Robbing one individual for the health benefit of another is an “issue.” Government created scams like PPO repricing and uncompensated care, two of the primary culprits of the high cost of medical care, are “issues.”
Government has been the massive “issue,” interfering with the delivery of health care for several decades now and bringing us from a time when no one needed insurance to a time when even with insurance, bankruptcy is a reality for the sick. Federal “solutions” to health care have focused on insurance coverage, rather than an examination of the true costs, an approach designed to distract attention from those profiting from the finance of health care while having nothing to do with its delivery.
There are some glimmers of hope, though. There is general acknowledgement that the high price of care is Washington’s fault. There is a realization that the politicians must choose their path: take the money or lose their power. The collapse of government health care will be a rough political ride for those who are in office when it happens. If for no other reason than preserving their own political fortunes, we might yet see a roll back, one that will occur in tiny, almost imperceptible bites, though.
There are some good people in D.C. Not very many though. “The reason people think politics is dirty, is because it is dirty,” as Lew Rockwell has said. I think this is why I always feel like I need a hot shower when I get back.
G. Keith Smith, M.D.
United Health Care has announced that regardless of the Supreme Court’s decision regarding the constitutionality of the Unaffordable Care Act (UCA), as a company they will honor some of the provisions provided within the legislation, including the elimination of lifetime benefits on medical care and “no cost” preventive screenings. You can read the LA Times version of the announcement here.
Lew Rockwell has a section on his great website (LewRockwell.com) called “political theatre.” One of my favorite parts of his site, this serves as my regular reminder of how D.C. politics serves primarily the role of a distraction, the purpose of which is to conceal the exchange of bribes and favors by the power brokers behind the scenes. I have recently written that I didn’t think the proponents of the UCA cared whether it was overturned by the courts, as the UCA was, like most laws, simply a distraction necessary to conceal the transfer of massive taxpayer money to government cronies. United Health Care was one of the proponents of the UCA. Having dealt with United Health Care as a physician, I can assure you their “honoring” certain provisions of the UCA regardless of court action, is not a touchy-feely extension of their love for all of us poor, sick folks. My guess is that they are keeping their end of the bargain, a bargain meant to completely destroy the private insurance industry. You see, “honoring” these provisions is part of the equation that will cause an unsustainable increase in insurance premiums. United and others will charge more and more and more (this stuff they are “honoring” isn’t free, you know!) until “the people” cry out to their D.C. goon for relief from “rising health care costs.” The result will be a complete government takeover of this industry, the administration of which will be left to United and the other biggies.
Just as unsurprising is the “high five” given to United by Arthur Kellermann of the Rand Corporation. In the same LA Times article linked to above, Kellermann takes his hat off and bows to United for this promise to “honor” certain provisions. He should bow and perhaps grovel as United is one of the Rand Corporation’s largest donors! You can check that out here. Interesting that the Rand Corporation (no kin to Ayn Rand) has shacked up with the usual suspects, especially since their famous study in the ‘70’s and ‘80’s indicted HMO’s as insurance products likely to be over-utilized. The study also concluded that the focus on preventive care did not improve patient outcomes. You can read about their study here. Now they are funded by the giant medical corporations for which they gladly provide cover. So much for their objectivity.
Keeping Rockwell’s “political theatre” distraction model in mind and Rothbard’s “cui bono”(who benefits?) makes it easier to see through the curtains, I think. Think about it. No matter what happens to the law, the insurance companies are going to proceed as if it is in effect. Who’s kidding whom?
G. Keith Smith, M.D.