A Fictional Interview

By Darrell Pruitt; DDS

Adam Smith, former 18^th century Scottish economist, is with me in the cyber-world today.  He wrote his theories on economics around the time of the birth of our nation. His book, “An Inquiry into the Nature and Causes of the Wealth of Nations,” predates the word “capitalism” as well as “economist,” by several decades. 

Yet his common sense wisdom, like that of many post-Renaissance thinkers of his day, still stands tall and true against time. 

Welcome Mr. Smith:

Q: I have just a few questions that I was hoping you could help me with. The first question is one that is so basic, yet it causes more acute embarrassment than most doctors can tolerate.  I happen to have lifelong immunity to such silly feelings. 

Mr. Smith, why are professionals paid so much in comparison to other trades?  Please use the English you are comfortable with.

A: “We trust our health to the physician; our fortune and sometimes our life and reputation to the lawyer and attorney. Such confidence could not safely be reposed in people of a very mean or low condition. Their reward must be such, therefore, as may give them that rank in the society which so important a trust requires. The long time and the great expense which must be laid out in their education, when combined with this circumstance, necessarily enhance still further the price of their labour.”  [Smith (1776) Book I, Chapter 10]

http://www.econlib.org/library/Smith/smWN4.html#B.I,%20Ch.10,%20Of%20Wages%20and%20Profit%20in%20the%20Different%20Employments%20of%20Labour%20and%20Stock

Q: I’m glad you said that instead of me (someone in the room chuckles.)  For whatever reason, doctors in modern society have remained silent while stakeholders, who are not accountable to patients, crowded them away from the bargaining table.  To tell the truth, what you might call stakeholders’ unenlightened self-interest seems a lot like tyranny.  What can doctors do about it?  I know that in your day, organizing labour (oops, you got me doing it now) could get one quickly killed.  Since then labour movements have come and gone in American society.  What are your thoughts about unionized healthcare professionals?

A: “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.”[ibid]

Comment: If I understand you correctly, Mr. Smith, you are saying that even though law should not deprive citizens of the freedom to assemble, which, by the way is now a civil right over here in the new world, the government would be wise to not render it necessary for professionals to do so because it would be impossible to prevent conspiracy against the public.  Let’s hope it doesn’t come to that. 

Now, let me show you evidence that our nation’s leaders, in an honorable effort to hold down the cost of healthcare for the common good, actually forgot that part of your lesson sometime over the last couple of centuries. It is thru a contrivance known as pay-for-performance [P4P}.

P4P

Pay for Performance (P4P), not known in your time, is one of the four cornerstone goals for healthcare reform that our President Bush described in his Executive Order.  He officially calls it “Aligning incentives so that payers, providers, and patients benefit when care delivery is focused on achieving the best value of health care at the lowest cost.”  I know you probably have never experienced the magic quality of “buzzwords” before, and the whole sentence is probably leaving with a dry mouth, wondering what “Aligning incentives” is really about.  Don’t feel bad.  This dialect of modern English is difficult for modern doctors to understand as well. 

To put it simply, Bush and his buddies put together an intricate artificial market system where the quality, price and demand will all be controlled by people other than doctors and their customers. 

Wait.  Please, don’t hang up on me.  I can completely understand why you don’t like it, Mr. Smith.  Get this:  I hear Stalin is pissed that Bush stole his idea of vertical collectivism.  I also think it smells a lot like borscht with turnips.  So, let’s move on.

Q: Finally, Mr. Smith, considering there is already unwanted and expensive interference in our nation’s healthcare system that eliminates natural competition between healthcare providers even before our nation turns to universal care, do you think it is unrealistic to imagine that a year from now consumers could demand black market dentistry rather than wait in lines for regulated dentistry?

A: “Particular acts of parliament, however, still attempt sometimes to regulate wages in particular trades and in particular places. Thus the 8th of George III prohibits under heavy penalties all master tailors in London, and five miles round it, from giving, and their workmen from accepting, more than two shillings and sevenpence halfpenny a day, except in the case of a general mourning.

Whenever the legislature attempts to regulate the differences between masters and their workmen, its counselors are always the masters. When the regulation, therefore, is in favor of the workmen, it is always just and equitable; but it is sometimes otherwise when in favor of the masters.”  [ibid]

Assessment

Damned counselors! 

Thank you; Adam Smith! 

Conclusion 

Your thoughts and comments on this artifice are appreciated.

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Healthcare Organizations: www.HealthcareFinancials.com

Health Administration Terms: www.HealthDictionarySeries.com

Physician Advisors: www.CertifiedMedicalPlanner.com

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Filed under: Ethics, Health Economics, Interviews, Op-Editorials | Tagged: adam smith, economics, Health Economics, Investing | 2 Comments »