Money vs. Mission: How Generic MBAs vs. Physicians Think about Health Care

Lambert here: Many of us still think of the medical system as a source of health care enabled by MDs, much as many of us still think of the university system as a source of education enabled by professors. That is, both institutions have considerable “good will” on what we might call society’s balance sheet (were society to have such a thing). In health care, as in education, MBAs trained in the ways of neo-liberalism are busy transforming that good will into institutional power for themselves and profits for their masters. Of course, neither institution will be able to function well for long with a degraded product and without “good will” (we might also use the word “trust”) but by the time society comes to that realization “I’ll be gone; you’ll be gone.” This post explains how MBAs are crapifying health care in detail from a physician’s perspective.

By Roy M. Poses, MD. Originally published at Health Care Renewal.

On Health Care Renewal, we emphasize problems in leadership and governance in large health care organizations, and how they affect health care professionals’ attempts to carry out their mission, and ultimately how they affect patients’ and the public’s health.  Large health care organizations are increasingly lead by people trained in business, not health care professionals, thus generic managers.  The stewards of these organizations, the members of their boards of directors or boards of trustees, are also increasingly current or former managers without direct health care experience. Yet all too often, health care leadership is ill-informed, incompetent, unsympathetic or hostile to health care professionals’ values, self-interested, conflicted, dishonest, or even corrupt.

Recently, in an effort to “bridge the gap” between physicians and MBAs, a new article in Becker’s Hospital Review by Todd Kislak discussed differences in the thinking and values among business trained health care managers and physicians.  The author, an MBA, listed nine issues on which MDs and MBAs have different views.  I have summarized below what appear to me to be the main points, somewhat reorganized from how he did it. Whether he meant to or not, Mr Kislak showed why physicians may have reason not to trust their new generic managers. 

Making Widgets vs Treating Patients

Mr Kislak wrote that MBAs see health care in terms of orderly, uniform and standardized processes, while physicians see it in terms of the complexity and variability of patients, the ambiguity of diagnosis, and the unpredictability of outcomes.  

2. Scalability. As a rule, MBAs tend to seek solutions to problems in a way that they perceive to be scalable and replicable, trained in the belief that the capacity to perform repetitively and consistently leads to better efficiency and quality. One-off situations are by definition outliers, and as such their importance tends to be downplayed.

Also,

 3. Centralization….   MBAs, … tend to seek centralized approaches to decision-making, often appearing in the guise of policies, programs and processes. 

So, the gist is MBAs see health care as analogous to an assembly line.  The idea is to provide uniform, consistent services that conform to the policies, programs and processes that come down from central headquarters, run by MBAs.

On the other hand, he noted that physicians think that “every case has the potential to be unique in some way,” while MBAs “view the unusual case as an unwelcome break in the routine, adding cost while slowing down the efficient care of other patients.”

IMHO, common sense, and a raft of epidemiological data support the MDs.  Patients differ in demographics, biopsychosocial characteristics, co-morbid conditions, histories of previous treatment, responses to therapy, etc, etc, etc.  Patients, their complaints, and their situations are complex and variable.   Furthermore, acute illnesses, complications of chronic illnesses, accidents occur unexpectedly, in unexpected ways.  Diagnosis are often unclear and ambiguous.  Patients’ prognoses and responses to therapy are unpredictable.  Thus, IMHO, seeing health care like an assembly, in terms of regularity and uniformity, seems dissociated from reality.  I have a hard time believing that MBAs who actually require medical care want to be treated as if they were identical to the next 10 patients.

“You Manage What You Measure” vs Complexity, Variability, Ambiguity, and Unpredictability of Patients, Diseases, Prognoses, and Treatments 

Mr Kislak suggested that MBAs emphasize measurement, especially the measurement of physicians’ performance,

5. Performance. One of the healthcare MBA’s favorite analytical tools is performance rankings of the MDs. Quantifying ‘results’ based on pre-determined metrics, assigning them a weight for averaging purposes and reducing performance down to a number is, to the MBA, how MDs and indeed all workers should be measured. You manage what
you measure
‘ is the MBA’s mantra.

Also,

6. Productivity. MBAs look at MDs’ productivity statistics (another performance measure) and wonder why so many MDs claim they are overworked. Looking at work hour statistics supplied by the Medical Group Management Association, one would not come away convinced that most MDs are logging more hours than, say, the typical healthcare MBA or indeed any high-caliber professional service provider.

Mr Kislak noted that physicians object to pay for performance and “may viscerally react to this uniform approach to performance assessment as inappropriate and even fundamentally at odds with the practice of medicine. Too much context is lost in the numbers, and too many factors beyond their personal control bear upon the performance ‘data.'”   He did explain why MBAs are unconcerned about the accuracy and meaning of the measures they manage. 

The “you manage what you measure” heuristic seems based on the concept, or better yet fallacy that everything in health care is uniform and predictable.  This seems an extended version of what has been called the streetlight effect or the drunkard’s search.  (See, for example, the version from Wikipedia, attributed to David H Freedman.  (2010). Wrong: Why Experts Keep Failing Us)  It begs the question of what is practical to measure is worth measuring, that is, is accurate, reliable, and meaningful.

Furthermore, there is now a considerable literature in medicine and health care showing that it is extremely difficult to develop performance measures that are reliable and meaningfully predictive.  (I cannot claim to have written comprehensively on this topic, but see posts here, and here.  For some good informal writing on why pay for performance [P4P] may not work, see Dr Robert Centor’s blog DBs Medical Rants)

Considerable research has also shown that P4P rarely improves performance, and may make it worse.   For example, the results of a systematic review published in 2012 [Houle SKD, McAlister FA, Jackevicius CA et al.  Does performance-based remuneration for individual health care practitioners affect patient care? – a systematic review.  Ann Intern Med 2012; 157: 889-899.  Link here.] were that

The effect of P4P targeting individual practitioners on quality of care and outcomes remains largely uncertain.

Furthermore, a 2012 analysis of pay for performance [Glasziou PP, Buchan H, Del Mar C et al.  When financial incentives do more good than harm: a checklist.  Brit Med J 2012; 345: e5047. Link here.] included the summary statement,

Current evidence on the effectiveness of financial incentives is modest and inconsistent.

Thus, it would seem that the MBAs have neither good logic nor good evidence to support their faith in their current metrics, particularly those they use to assess physicians’ performance. 

Power and Money vs Patients’ and the Public’s Health

Mr Kislak saw himself as supporting physicians in “their mission to provide high quality and effective care to their patients.”  In the conclusion to his article, he asserted that physicians and MBAs “share the same overarching goals … – effective healthcare delivery….”  However, in the body of the article, Mr Kislak suggested that MBAs see their goals in terms of power and money…  

4. Leadership. MBAs like to think of themselves as either nascent or actual leaders. It is understood that their intention is to build a career trajectory that will move them up in their organization (or in another organization) into positions of increasing authority and control. After all, this is an important reason why they become MBAs in the first place.

Furthermore, Mr Kislak wrote

8. Language. MDs and MBAs usually work for some type of
business entity, whether that entity is for-profit, nonprofit, academic, government or sole proprietorship. To the MBA, however, it is all too apparent that with few exceptions MDs have little training in the language of business that all entities speak — the language of finance and accounting.

He noted that “this is a significant disconnect and a root cause of why MDs and MBAs often find themselves talking past each other on even the most basic business issues.”  However, interestingly he did not even mention that MBAs may have as little facility with the language of medicine and health care as physicians have with the language of finance or accounting.  Furthermore, he seemed unaware that it makes as little sense to say that discourse in health care should be in the language of finance as to say discourse in finance should be in the language of health care. 

Finally, Mr Kislak made it very clear that to MBAs, money comes ahead of patient care,

9. Growth. MBAs are trained to look for ways to grow the organization’s revenues and profits to the long-term benefit of the owners or stewards of that organization. Improvements to quality, efficiency, profits, revenues, technology and the like are generally viewed as a means to that end of growing,

Yet he noted that

the MDs sometimes wonder what all the growth talk may be costing their own priorities, including their compensation. This issue can become rather sensitive when it implies that the MD is less concerned with the long-term health of the organization than the MBA, and can devolve into finger-wagging about lack of engagement or weak physician-hospital alignment.

It is a measure of how much generic managers have taken over that the physicians may be blamed for lack of interest in the long-term “health of the organization,” while the MBAs seem totally unconcerned about what effects the organization has on the real health of patients or the public.

Thus, fundamentally, MBAs running health care organizations are mainly interested in growing their organizations so that they bring in more money.  MBAs hope to leverage their organizations’ financial performance so that they personally can rise to positions of greater power and wealth.  Health care is simply a “means to that end.”  Mr Kislak seems to have confirmed my worst fears that most of health care’s current generic managers put short-term revenue, and their own wealth and power, ahead of patients’ and the public’s health. 

Summary

In 1988, Alain Enthoven advocated in Theory and Practice of Managed Competition in Health Care Finance,
a book published in the Netherlands, that to decrease health care costs
it would be necessary to break up the “physicians’ guild” and replace leadership by clinicians with leadership by managers (see 2006 post here).

Thus from 1983 to 2000, the number of managers working in the US health care system grew 726%, while the number of physicians grew 39%, so the manager/physician ratio went from roughly one to six to one to one (see 2005 post here). As we noted here, the growth continued, so there are now 10 managers for every US physician. 

Now we have one MBA with considerable experience inside health care, and personal sympathy for the goals of high quality and effective care for patients, who. perhaps inadvertently, suggested why this managers’ coup d’etat was a terrible idea, and why MBAs should not be allowed to lead health care organizations.  He corroborated our concerns that generic managers may be ill-informed and do not understand the health care context, particularly the variability and complexity of patients and their problems, the ambiguity of diagnosis, and the unpredictability of prognosis and response to therapy.  They believe in simplistic management approaches, particularly the usefulness of measurement and metrics, even in the absence of logic or evidence supporting them.  Furthermore, they may be heedless of the mission of health care, particularly of the primacy of the patient, and in fact put their own organizations’ revenue ahead of patient care, and ultimately may pursue power and money rather than patients’ and the public’s health.  

As I have said before,  true health care reform would put in place leadership that understands the health care context, upholds health care professionals’ values, and puts patients’ and the public’s health ahead of extraneous, particularly short-term financial concerns. We need health care governance that holds health care leaders accountable, and ensures their transparency, integrity and honesty.

But this sort of reform would challenge the interests of managers who are getting very rich off the current system.  So I am afraid the US may end up going far down this final common pathway before enough people manifest enough strength to make real changes.

 

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

43 comments

  1. Clive

    I’ll take the British National Health Service (NHS) over Obama “care” any day of the week, but I think that, absent a general resistance movement about this sort of encroaching managerialism, we’re all going to end up in the same predicament. Clinicians, certainly those here in England, seem unable to counter being demoted into mere cogs in a giant apparatus designed to produce specified healthcare outcomes for a given financial input. Clinical need be dammed.

    I am a trustee of a charity which is acts as a patient group for people with a particular eye condition. Treatment for this condition can be drugs, surgery or medical appliance based. For the past, say, 10 years or so that I’ve been involved with this patient group, most of the requests for support came in connection with the disease process itself — the prognosis, the best treatment option for the condition as it was manifesting itself at that stage, risks and benefits of this- or that- approach, maintain quality of life and employment prospects and so on. Now, what we get the most of is concerns about access to a treatment which both the clinician and the patient are wishing to pursue, differences in how “the system” operates in one part of the country compared to another and seemingly endless niggles with what the NHS will cover, what a private medical insurance policy will cover and what neither of these will cover. Our charity often solicits input from clinicians (ophthalmologists, optometrists and even organ tissue banks as transplants can be a last-resort treatment option). All tell the same story — a battle with having to try and cajole a cost management system sausage machine into giving “permission” to pay for what the clinician and the patient are trying to elect for.

    I’ll give a depressing example from personal experience. I get a kind-a useable vision by means of a medical appliance — custom designed rigid gas permeable contact lenses. These come in many form factors, but the cheapest is a set of 26 pre-configured shapes which, if you’re lucky, give a satisfactory balance of visual acuity and fit against the curvature of the surface of the eye. They’re great if they work for you. But if they don’t fit, they don’t fit and you either can’t see properly, or can’t tolerate the lens, or both. I’d been dispensed one of these lenses and trialled it for about a year. I wasn’t convinced from the start, but I persevered for as long as I could. Eventually, I was getting — at best — about 4 hours useful vision so when I had my next 6 monthly exam, I decided that I was going to insist on some new approaches being tried.

    The optometrist agreed that the existing medical appliance wasn’t optimal. The problem — for me — was that it wasn’t so bad that it was completely intolerable. I made it clear that I wasn’t going to be left with a situation that wasn’t viable for me, dropped a few names of some of the senior clinical leads I knew and tried to convey that I knew how to make trouble and was prepared to do so. The optometrist — like the vast majority of healthcare professionals — sincerely wanted to help. I gently enquired what was the problem with dispensing a more complex/expensive medical appliance. I shouldn’t have been surprised by the answer, but actually I still was: departmental budgets. The medical appliance which would work best (known as a “semi scleral lens” — I won’t bore readers with the details) cost £400. The cost to me was practically free (I paid only £3 for postage) but obviously the money had to come from somewhere. In order to process the dispensing, the optometrist had to complete a “patient quality of life checklist” and get it countersigned by an ophthalmologist.

    I’ll leave my personal anecdote there and make my main point. The thing that really bothered me was the meek acceptance by the clinicians of the “seat at the table” (or maybe better put, “permission to be loitering in the consulting room”) that has been given to finance. Their clinical judgement is now second-guessed — and subject to challenge by — a cost/benefit analysis imposed by a cost-centre manager on their department. I kept my mouth shut, but I could not begin to comprehend how we had ended up where you had to score enough points on a “pain and suffering” checklist to “gain funding” for treatment. And I could even less comprehend how clinicians had simply resigned themselves to this fate.

    Now, at this point, any libertarians who are unwisely lurking here at NC may say “ah, that just goes to show the problem of socialised medicine. If you weren’t so enamoured with that particular crappy system and paid your own way, you wouldn’t be in that predicament”. To which I’d retort that, whether the financialisation is imposed by the restricted allocation of government supplied funding or by an insurance company trying to maximise its profits by minimising its cost of claims, it doesn’t really matter. You’ve accepted the entire nasty premise that cost avoidance can insert itself into the clinical decisioning process. You’ve crossed a Rubicon of moving from “I see the doctor and s/he tells me what treatment I need” to “I see the doctor and s/he tells me what treatment I need then either they or I goes to ask the budget holder whether I can have it or not”.

    While I follow you guys across the pond’s struggles with the trials and tribulations of the ACA and the health insurance industry (and am appalled) and think myself glad that we don’t have that to deal with, I believe that this creeping financialisation / managerialism in healthcare is the big problem. It doesn’t matter if you get rid of the ACA by some miracle and move to Single Payer. If we don’t kick the MBAs out of healthcare, whichever system we have, it is a moot point.

    1. skippy

      Concur Clive… Our dual system is a workable compromise [at the moment], yet troubling signs are on the horizon. Lots of regional centers are getting large building – modernization outfits on public debt and as such, nice fatted cows. The currant PM is a screaming free market ideologue which gets wet about austerity or any flagellation on offer, not the kinda card dealer you want when your down on chips imo. Although the general public remains hair trigger over any kind of aggressive restructuring, don’t kick people when their down still has traction in these parts [voters will cross party lines, save the doctrinaires (small pop)].

      Skippy… If I may say the libertarian object fetish is a sight to behold, commodify everything with potential to increase wealth and completely ignore it…. if might diminished wealth.

    2. financial matters

      J.D. Alt adds some interesting insight to this.

      http://neweconomicperspectives.org/2014/05/fallacy-composition.html

      A Fallacy of Composition
      Posted on May 2, 2014
      By J.D. Alt

      “”Recently there was a piece on the PBS News Hour illustrating the dramatic and dire need for us, as a collective nation, to begin understanding Modern Money as quickly as we possibly can.

      The news piece was about a new wonder drug which has been proven to cure hepatitis C—a devastating and, ultimately, deadly viral infection. The “news”, however, was not about the drug being proven 100% effective, but rather about the fact that we can’t afford it. The PBS piece did the math: the drug that cures the infection costs $1,000 per pill, taken for 120 days = $120,000 per cure times an estimated 5million Americans currently infected with the virus. Framed this way, the question posed is: how can we come up with $600 million Dollars to cure the folks who have just this one disease? The implied message was clear: there simply aren’t enough Dollars to pay for all the pills. Obviously, the real resources exist to produce the pills (since they are, in fact, being produced) but there aren’t enough Dollars to buy the number of pills we need. So the pill manufacturer—just like the villagers sitting beside their tools and road-building materials waiting for Dollars—the pill manufacturer is sitting beside his pill-making machine waiting for Dollars that, according to the commentators on PBS, are going to be virtually impossible to find.

      Big numbers, apparently, frighten us. We couldn’t possibly get our hands on the giga-billion Dollars necessary to buy all the wonder drugs that are rapidly becoming technically feasible. But this is the real fallacy of composition—the cognitive dissonance that prevents us from rationally understanding and managing the most fundamental aspect of our socio-economic contract: MODERN MONEY. The big numbers we should be frightened of are the millions of American citizens who are under-nourished, under-housed, under-educated, and under-cared for—and the massive number of our citizens who are sitting idle beside stacks of available materials and arrays of available tools while uncounted lists of useful things need to be accomplished. Those big numbers mean the thing we thought we were creating when we agreed to form “a more perfect union” is beginning to fail.””

      1. SqueakyRat

        $120,000 X 5 million = $600 billion, not million. About the size of the defense budget. But your point remains sound.

        1. Saddam Smith

          BINGO!!

          This discussion is happening of course, but not nearly broadly enough, and the mainstream barely touches the topic. When it does, it measures things like ecosystems and ‘nature’s services’ in dollar-terms. The cultural reflex is to measure value/wealth in money, and that which increases the amount of money (i.e. ‘wealth’ in this preposterously skimpy philosophy/paradigm) is of highest value. Ergo: How is saving random lives profitable? Or, can saving those lives lead to a good return on the investment? Measured in money, highly unlikely: only those who can afford it are worth saving, because the market says so. On other ‘measures’ of course it’s a resounding yes.

          We need healthier and richer cultural definitions of and relationships with wealth. This cannot be said loudly nor often enough. At least until people start really thinking about the implications of this simple question: What is wealth?

          And yes, Financial Matters, it is preposterous and cause for further investigation that we have skills, know-how and resources but not the proper money system to harness our potential sustainably. If only this elegant line of thought were more prevalently out there in the public mind right across the planet…

      2. mellon

        Many drugs patents are expiring so the drug industry seems to have gotten the green light to soak the public for whatever they can extort on the ones that are still under patent and generics as well.

        The prices on many formerly inexpensive but name brand drugs has shot up three hundred percent or more since Obama took office.

        Generics are more expensive and harder to find.

    3. Cynthia

      The end of hospitals as we know them has begun. Big corporations now have found ways to “profit” off of hospitals whose original purpose was to put people over profits, most of which are teaching hospitals. Phoenix-based behemoth Banner Health recent acquisition of Arizona’s largest teaching hospital system comes to mind (see link below). Health care will falter, quality of doctors will fall.

      Health care has become a rent-seeking repository for corporate parasites to loot. This will result in patients paying more to be misdiagnosed by way too busy doctors who are working like a machine, not a person. It’s a sad day for all who use these factories.

      http://www.crainsdetroit.com/article/20140707/NEWS/140709905/consolidation-could-be-next-for-academic-medical-centers

      1. Art Eclectic

        Everything today is about rent seeking. If there is a financial transaction happening, anywhere for any reason, there’s a rentier looking for a way to make a profit off it.

        Our food supply is controlled by rentiers
        Our housing is controlled by rentiers
        Our energy needs are filled by rentiers
        Our health care is run by rentiers

        Either everything is a market transaction (those with money get to live, eat, and have shelter) or we have to create a few areas where we will establish a baseline of things a modern society provides to its citizens. So far, the market transaction people are winning.

        1. David Harley

          Water is being privatized too, as useable aquifers are being pumped dry by Nestle or by golf courses.

        2. mellon

          The free trade agreements mandate that everything that governments procure be for profit only, and they ban new public services.

          Do people know that all the FTAs have a compltely amoral, backwards value system that views public services and compassion as bad?

          Basically they see them as a theft of the profit which would otherwise be made on those people by some corporation. A “taking”. And they set up a mechanism for their compensation if the government does something that adversely effects the profitability or value of a corporation’s investments! (investor-state dispute settlement, or ISDS) So its entirely possible that if a country decides to help poor people it would have to pay twice, once for the help, and then again to the “owners of that market” as compensation to them for doing so.

          Not just for health care- for dozens or even hundreds of pressing social problems!

          We are sensible people and we make suggestions- like single payer health care or jobs programs-

          Well, the neoliberals are literally 20 years ahead of us. Those things are all banned now, but they hide it, they dont tell us, and instead, to hide the ugly facts they pretend to be in gridlock.

          90% or more of the things which people here (and everywhere in the US, which has been prevented from learning about the FTAs by a media blackout) 90% of the things that people suggest that our government should do to fix dozens of things either are already banned or in the process of being banned by these truly evil free trade agreements.

          That is not an exaggeration! Finding some way to help poor people that is not subject to these new evil rules in one way or another – is now intentionally very very difficult.

          With the effect always being to give corporations free taxpayer money as much or more as goes to a single poor person. If its a good work by government, its now often FTA illegal. Ad its getting worse very quickly.

          Giving poor people things they need but cannot afford is seen as a trade barrier that “devalues the market”. The more people need something, in their logic, the higher the price is justified to be. Cost has nothing at all to do with it, they dont want to budge on that one, its “a matter of principle” for them.

          The sooner we all realize this the better.

  2. DakotabornKansan

    I no longer recognize the health care system I entered decades ago. Physicians have fled private practices for hospital employment. Independent small group practices have been replaced by hospital-owned medical group practices.

    Because many people don’t receive regular medical care, they tend to have more medical conditions that need to be addressed before being discharged from the hospital. So costs go up along with the average length of stay.

    Pressures mount from hospital administrators [trained in business, not health care professionals] about “performance,” “length of stay,” and “avoidable days.”

    Billing codes, created by the hospitals, were changed to get more revenue from private insurance and Medicare. However, attending physicians must attest to the accuracy of the codes. Any inaccuracies are the responsibility of the physicians. Thus, hospitals get the money while physicians are legally responsible for the fraud. Physicians take the risk while hospitals reap the reward.

    Anyone who stands alone against them, advocating for better patient care, is either marginalized or terminated.

    Putting legions of MBAs and stockholders in between patients and our healthcare providers helps nobody but the rent seekers.

    We are hosts for the parasitic billion dollar insurance companies and health care conglomerates…the crapifying of health care.

    1. Art Eclectic

      A doctor friend of mine is looking to leave private practice because his income volatility is too much to handle anymore. A private practice has become too expensive to run with all the staff you need today (mostly because of insurance and billing) so a hospital or group practice helps smooth out income levels.

      A dentist friend, same situation. She can only expand by taking on another dentist, she can only sell just so much of her own time. But taking on another dentist means she has to double her marketing to bring in more patients, which means another office staffer as well as another dentist.

  3. Thorstein

    I would only expand Lambert’s intro to include the crapification of K-12 education along with “the university system”. By comparison, the crapification of K-12 is a relatively recent phenomenon. Let us not forget that it was Henry Dunster who began the crapification of the university system back in 1650, selling Harvard out from faculty control to a bunch of Boston investors back in 1650, creating the first corporation chartered in the colonies.

    1. Kokuanani

      Thanks, Thorstein. I was thinking the same thing, particularly with regard to the evil “Common Core” and the endless testing that accompanies it. All of this is based on the MBA assumptions of what’s “measurable” and how one measures.

      An analysis of K-12 education in this light, and in particular the attack on teachers, would be quite useful. I hope someone tackles it.

    2. Jim Haygood

      With K-12 education operating as a gov-chartered, cost-plus monopoly that taxes property to raise revenues, it has no incentive to change. It doesn’t care what you or I think, except when it’s time to approve another bond issue. Surely more money can fix this problem! /sarc

      1. hunkerdown

        There is a case to be made that public K-12 education needs to tighten its belts. But it is the MBA welfare queens in the administration office that are taking money and headcount from instruction and curriculum development.

    3. David Harley

      Thorstein, it’s OK to have a bunch of would-be clergymen gathering in a shed with one teacher as personal property, but everything larger, such as a town, a college, or a trading company such as Massachusetts Bay, has to be a corporation. Otherwise, one couldn’t take it to court. All the Oxford and Cambridge colleges were corporations in 1650, and had been for all of their existence.

    4. mellon

      They see all those jobs in education as a potential gold mine in trade concessions – to do that they need to privatize education down to the municipal level and then globalize it. Thats one of the main goals of TiSA, I am pretty sure. Fracking jobs too. Anybody who thinks they are telling the truth about TiSA when they say that it will increase employment in the US for Americans is drinking Kool Aid. American companies may win out but it will be in part by bundling workplaces up into contracts- then putting those contracts, basically the remaining jobs that many people now think are secure up for international, competitive bidding.

    5. H. Alexander Ivey

      Teachers are always looking for “how did someone else do this” when they look to teach (not to copy, but as a first draft for their teaching). This posting is an excellent first draft to state why education is rapidly failing – just sub “teacher” for doctor and you have it. Just be sure to acknowledge the author to keep the plagerism harpies off your back (har, har).

  4. Jim A

    Business handle “long tails” poorly. If something works well for 85% of the customer base, then ignoring the remaining 15% is usually the most profitable solution. One of the reasons that Fed Ex and UPS are profitable, and the USPS has difficulty breaking even is the people that USPS delivers to (universal mandate) and that are served poorly or not at all by the commercial services. It certainly sounds from the above that the same is true of healthcare.

    1. mellon

      USPS privatization is being driven by GATS- its a fact. Its not secret. They need to eliminate it to help UPS and FedEx and DHL make the argument that other countries should do it too and then give them more business.

      The US would be hypocritical if it maintained its own postal service while telling other countries that these FTAS required them to give up theirs. Its very similar to the Rx drugs and health insurance services situations.

      We in the US have to get a bad deal or it looks bad. They couldn’t give their own country a better deal than they force on others.

  5. Larry

    From Sam Smith of the Progressive Review:

    March 24, 2014

    Pocket paradigms The managerial class:
    Recent decades have been characterized by the invasive influence of an arrogant, autistic, and amoral class of late 20th century MBAs and similar members of the technocratic elite. This class junked sixty years of social democracy, helped wreck the economy, made every American worker a temp-in-waiting, carpet bombed the English language, trashed every moral concept in their way, and twisted reality so effectively they even convinced many that they were sex objects.

    And they are everywhere. You will find them running schools and universities and managing once great museums. They talk mush, think mush, market mush, report mush, and defend mush. They attempt to make up in certitude what they lack in wisdom; they can’t tell the difference between a phrase and a product; and they create infantile and self-serving distortions of economic principles that they declare to be the only principles in life worth observing. They are, in the end, just so many more televangelists, but with themselves as God. Perhaps worst of all, they are without the capacity for shame. Like other sociopaths, they are remorseless.

    The fraud, the huckster, the salesman are not new phenomena in America; what is new is that they now so strongly control every estate of our society. Those of a nature that would have once caused Americans to close the door, hang up, or say “no thank you,” now teach our children, run our government, and tell us what to think. They are the Enron generation, filled with postmodern version of Willy Loman: “He don’t put a bolt to a nut, he don’t tell you the law or give you medicine. He’ s a man way out there in the blue, riding on a smile and a shoeshine.” – Sam Smith

  6. fresno dan

    http://www.nytimes.com/2014/07/29/upshot/the-problem-with-pay-for-performance-in-medicine.html?partner=rss&emc=rss&_r=0

    “The problem, one I’ve noted before, is that changing physician behavior is hard. Sure, it’s possible to find a study in the medical literature that shows that pay for performance worked in some small way here or there. For instance, a study published last fall found that paying doctors $200 more per patient for hitting certain performance criteria resulted in improvements in care. It found that the rate of recommendations for aspirin or for prescriptions for medications to prevent clotting for people who needed it increased 6 percent in clinics without pay for performance but 12 percent in clinics with it.

    Good blood pressure control increased 4.3 percent in clinics without pay for performance but 9.7 percent in clinics with it. But even in the pay-for-performance clinics, 35 percent of patients still didn’t have the appropriate anti-clotting advice or prescriptions, and 38 percent of patients didn’t have proper hypertensive care. And that’s success!”
    ——————————————-
    35 percent of patients still didn’t have the appropriate anti-clotting advice or prescriptions, and 38 percent of patients didn’t have proper hypertensive care – – that really is SHOCKING and shows a cavalier attitude toward preventive care. As someone who has been on both sides of the needle, the average person needs to understand that the person who knows your body and is most concerned with your body is you. I had a lump in my neck in my youth and a doctor told me it was mononucleosis. Well, for a number of reasons it struck me that this physician didn’t know what he was doing…..and I was right – I had Hodgkin’s disease.
    You have a right to fire your doctor. Not liking him is a good enough reason – he is not your mommy, and you don’t have to explain yourself to anyone.
    The fact of the matter, is that all of these studies on pay for performance are going to show poor results. Mostly because of the stubbornness of large numbers, and second, in most cases medicine really can’t fix too many people (everybody dies, right?)
    The best thing to do is know what your blood pressure is, what it should be, what your baseline blood chemistries are, and what they should be. Than start eating sensibly and exercising regularly.
    If you know what your parents or siblings died of, than you can learn about the best ameliorative actions to delay or prevent the same result. The below book helps to clarify that medicine can help your body heal, but in the final analysis, your body’s own homeostatic mechanisms is what keeps you alive. So treat your body as best you can.
    http://www.ronaldjglasser.com/books/the-body-is-the-hero

    1. mellon

      “pay for performance” in healthcare these days seems to be a code word for capitation or “pay for non-service” which basically means paying doctors the same whether a patient is sick or healthy, so it acts as a strong disincentive to care. Insurers want doctors to drive away sick patients.

  7. Cynthia

    I have been saying this for years! And it has only gotten worse since the dawn of ObamaCare. Profoundly worse. The vast amount of our healthcare dollars goes to pay people who have absolutely nothing to do with patient care. These people carry briefcases and wear expensive suits, and spend their day in very nice comfortable offices, while doctors and nurses in the trenches are forced to work more and at a faster pace with less support and less pay. They are professional paper shufflers who work in hospital administration and the health insurance industry, and their sole purpose is to squeeze you for money. They wouldn’t know a bedpan from a bedsore, even the ones with an RN or MD after their name.

  8. cnchal

    The managers’ coup d’etet link has a horrible twist not talked about in the post.

    The linked article explains that “that those charged with the stewardship of US hospitals are even more inclined now to hire top managers with little or no health care experience or credentials.“.

    They particularly seem to favor executives drawn from the world of finance.

    The same people that rode the financial crime wave to riches are now running hospitals. They rot and rob the system from the inside out.

    Bullshit jobs now rule the roost in hospital systems.

    Thus from 1983 to 2000, the number of managers working in the US health care system grew 726%, while the number of physicians grew 39%, so the manager/physician ratio went from roughly one to six to one to one (see 2005 post here). As we noted here, the growth continued, so there are now 10 managers for every US physician.

    Now add on the bullshit jobs from the health care insurance end of it, and 98 cents of every dollar spent on health care goes to someone not helping you.

    1. fff

      Why shouldn’t they favor finance; after all, finance draws the highest returns, and that means they are have the most talent and virtue We should be lucky to have them!!:):)

  9. Nat Scientist

    The eternal human goal is for technology to remove “work” rather than measure it. For instance, I left my glasses on the shelf when ‘reading glasses’ were indicated, and bifocals. In fact I read ‘The Art of Seeing” (1942) by Aldous Huxley championing and the Bates method and rather than freeze my weakened eye muscles with a crutch and reduce the need eye’s muscles to realign the natural lens, I go without contraptions on my head.
    An MBA manager would ‘get’ this in how many years?
    “If you don’t make something useful out of nothing, something will surely make nothing useful out of you.”

  10. jgordon

    “So I am afraid the US may end up going far down this final common pathway before enough people manifest enough strength to make real changes.”

    If you will notice, this is a common theme through every aspect of society: the institutions start out relatively effective and fair and subsequently become inefficient and corrupt. Much like entropy, the process never seems to go the other way. Nor will it.

    This societal/economic/monetary system has passed its expiration date. We are now left with the decaying zombie that still moves due to some external, unholy power (say fossil fuels and/or ZIRP for example), but will collapse given the slightest perturbation in the finite supply of resources (mineral and human) feeding it. So it will collapse.

    A wise person would stop worrying about the current unsustainable system (aside from how to survive its collapse relatively unscathed that is) and start thinking about what comes after it. Because a failure to plan is a plan for failure.

  11. jfleni

    RE: Generic MBAs vs. Physicians

    They think that what they “learned” in “Bufoon Business Academy” somewhere is true and can be mathematically proven, even though their techniques are often only very approximate and far from universally true. This is always joined by arrogance and hubris which usually sneers at things outside the experience of the BBA morons!

    Thus the physician (or scientist, or careful thinker in general) is immediately discounted by the jumped up bean-counter fools who always make the same supid and narrow-minded mistakes over and over again.

  12. Wade Riddick

    Cost-effectiveness in American medicine would be a great place to start – but neither doctors nor MBA’s focus on this.

    For example, nobody likes to discuss the Pharmacy Benefit Managers where kickbacks are legalized and determine whether shelves are stocked with particular drugs. Phil Zweig has written some about this. More expensive drugs have more profit margin to pay greater kickbacks and hence are more readily available than cheaper rivals. Availability, in other words, has nothing to do with the health of the patient. The result has been an epidemic of shortages in very cost-effective generics, particularly in oncology (e.g., methotrexate and leucovorin). Patients have died because of this. The physician comes out and says, “We gave them the best available drugs.”

    The key word is *available*.

    This is not unlike the middleman rent-seeking that has overinflated the prices of copper, aluminum and oil. This all happened when people who weren’t buyers or sellers were allowed into the commodities markets – and don’t forget Enron killing people in California ten years ago to manipulate the electricity price by shutting down power plants. Banksters do it to collect rents and politicians do it to collect campaign contributions from the banksters. This is the agent profit model that so often results in agent loss.

    Obamacare also preserves the conflicts of interests not just with pharmacies but also with physicians. Spinal surgeons, for example, can still get paid per screw installed. What do you thinks going to happen then? Will you end up with more screws or fewer screws?

    People make the deadly assumption that more expensive care is better care. It’s not. Frequently novelty means expense, patent and risk.

    Think about the FDA for a moment as an organization designed to confiscate public domain chemicals, which are cheap because they’re off patent and we all own them, and to substitute more expensive proprietary (and often harmful) chemicals. Dietary fiber is a good example of this.

    Gut bacteria process fiber into GLP-1, which sensitizes the body to insulin and reduces inflammation. Last century, the FDA said to food processors, “You want to process fiber out of foods and advertise pseudofood as even better than the real thing? Sure!”

    So, decades later when diabetes was an epidemic, the FDA said, “Wouldn’t it be nice if somebody came up with a drug to elevate GLP-1?” And this is how the class of incretin mimetics was born.

    And Byetta is a great drug. For emergency rooms. It elevates GLP-1 instantly whereas fiber takes months. Except Byetta costs $3000+ a year and fiber is about $100+.

    So what happens whenever somebody tries to tell diabetics they’re sick from “fiber deficiency” so they should take dietary fiber with their meals?

    The FDA says, “You can’t say that. You haven’t run a $30 million clinical trial on dietary fiber to prove it’s safe and effective.”

    That’s ass-backwards.

    People have been eating fiber for millions of years. The time to run the expensive clinical trial on risk was when Big Food took fiber out of their product to make it addictive and deadly – and then told the public this counterfeit, inferior product was even better than the real thing. (The gaul! Who did they think they were – investment bankers marketing CDOs or something!?)

    So the FDA manipulates the risk evaluation process to the benefit of campaign donors – and not patients. The entire system runs like that.

    Rent-seekers often have to confiscate public goods to get to their monopoly profits and medicine is no different. But they have to confiscate chemicals by manipulating the information available. This happens in everything from chronic neuropathy, where addictive opiates are substituted for things like low-dose naltrexone and methylcobalamin shots, to autoimmunity where dosing at-risk patients with intestinal worms would prevent autoimmunity, allergy and asthma from even developing. (And autoimmune patients can need $25K-$100K of medicine a year.)

    The recent attack on compounded medicine in the new law is a good example of this. The FDA is pushing to keep compounded medicines from being used to treat patients in doctors’ offices. Aside from killing E.R. patients whose lives might depend on overcoming a drug shortage with something like compounded calcium gluconate burn gel, this is going to raise prices and push doctors (esp. oncologists) into large hospital practices where, unsurprisingly, the in-house compounder is exempt. Notice how none of these in-office restrictions have anything in the slightest to do with effective quality control measures. The product is simply being assumed “dangerous” – yet is it’s so dangerous, why keep letting it out to walk-in patients with scripts to fill?

    It’s a push for further price-fixing plain and simple. Why? Because compounding pharmacies get their raw active ingredients from FDA-inspected chemical manufacturing plants – and they don’t push them through the Pharmacy Benefit Managers associations. They are the last remaining independent part of the supply chain not under rent-seekers’ control.

    I’ll close with another good example of this. The FDA head recently said getting compounded Avastin off the market for advanced macular degeneration was one of her top priorities. Compounded Avastin is just as effective at preventing blindness, just as safe and 1/60th the cost of Lucentis, the only other available treatment. Who is this dangerous to except Big Pharma’s profit margins?

  13. MrColdWaterOfRealityMan

    “…“may viscerally react to this uniform approach to performance assessment as inappropriate and even fundamentally at odds with the practice of any real world activity that isn’t in a controlled environment on a factory floor.”

    Fixed that for you.

  14. impermanence

    “He noted that “this is a significant disconnect and a root cause of why MDs and MBAs often find themselves talking past each other on even the most basic business issues.” ”

    To even have a conversation such as this accepts the absurdity that an MBA should have anything what-so-ever to do with health care. Have they not caused enough harm in the four decades it has taken them to completely destroy this health care system?

  15. kevinearick

    The generic MBAs are merely stupid; the Medical Association is far beyond stupid.

  16. kevinearick

    Rigged Indexing

    SO, you have a clock as input, a clock as output, and you are going to bypass gravity, by collapsing spacetime in the middle, with a set of gears built for the purpose, and you want to go many places, so you are going to build interchangeable gears. Have you ever noticed how fast the specialists work, to go nowhere, because other specialists are negating the former, which becomes additive economic activity, GDP?

    Who cares what skills the public, private and non-profit corporations want? Let them train you to be useless on a part-time job. The further up you go, the greater debt you collect, and, sooner or later, the bank calls it, one way or another. That’s what MBAs do. The new doctors aren’t collecting wealth from FILO; they are renting a layer of pollution, their space, like everyone else in the empire. Grade school is pre-automation education.

    The critters are waiting for taxes to gain on government spending, it’s not going to happen until demographics turn again, and civil marriage, the majority on this planet, is not capable of raising children, leaving only a downward spiral in purchasing power. Whether they die slowly or abruptly depends upon their chosen path of war. Empires are self-adjusting, unless you interrupt them.

    Every civilization lionized in History has assumed preeminence over the planet, granted by one superstition or another, and all have failed miserably. There is no exit from the buy to let, disposable debt, natural resource exploitation system, but the psychology of demographic collapse. Timing the interruption depends upon how much gravity you want to carry.

    Collapsing the petrodollar, for a basket of currencies or digital fiat, will have no bet effect, because there is no reservoir of easily exploitable resources available to civil marriage, upon which to base its debt issuance, to re-ignite the confidence scam. Going off-grid sounds great, as an advertisement, but the reality is far beyond the majority.

    You cannot allow single people, masquerading in civil marriage to the end of material possession, set prices with debt and costs with law, and expect a happy outcome, for anyone. The majority has no free will, blaming the 1% as a scapegoat, because it practices no free will, on a one-way trip, backwards, seeking an ‘equal’ right to the product of others, like your production is a gift from their gods, which they should be able to take as needed.

    If you haven’t noticed, all the derivatives are moving back home with their parents, or getting a $100k operation at the hospital to get on the dole, some of them even risking dialysis despite having had perfectly healthy organs. I don’t have to concern myself with those that took my children, granting themselves the right to arbitrarily assign debt to my income, because they are killing each other all around me.

    My children began with the best genes and the ability to ignore ignorance, if they so choose. If they choose, they will be better programmers, and as you can see, if you can program a lick of code to extend compliance, you can write your own check in the empire economy, because it is desperate. Facebook doesn’t sell anything, but advertising, for derivatives on a curve of rapidly diminishing returns.

    Natural resources per capita are growing in the midst of a demographic collapse, which is only now being reported, and the critters cannot ignite sustainable growth, because they have no real skills, and all the talent has vacated. If the electrons worked according to the model proffered by higher education, there would be no electricity. One electron can and does offset many protons and neutrons, in time. DDT or fracking, pick your poison.

    A contrived battle between the middle class, controlling the law, and legacy, controlling debt, is of no more concern to labor than who the actor is on a P&G TV game show on a 50 year run. If you adjust the S&P for purchasing power, everyone lost, despite rigging the index. The critters bills are going up faster than the S&P, and they keep doubling down, proposing more laws to reverse it, wondering why income inequality keeps growing.

    If you want to see what hospitals do, take a look at what the digestive system does, relative to other systems, and examine colon surgeries. Most problems begin in the mouth, so you might want to replace that toothpaste. You have already examined the relationship between debt and education ad nauseum, with no letup in the debt created. But labor has better things to do, in the meantime. If your children don’t have nutrition, the color of your tennis shoes, the type of car you drive, or where you live doesn’t matter.

    If you have a development ready to go at will, another for your children or other people’s children, and another for your grandchildren or other people’s grandchildren, it doesn’t matter what the automatons do. You cannot depend upon your children to invest in your future, to remain unswayed by the rigged ponzi lottery, or the State to remain uninterested in taking your children, but you can be prepared.

  17. cripes

    501c-3 non-profits are similarly afflicted by corporate emulating bean counter and IT types, obsessed with measurements, public private partnerships and calling themselves CEO’s.
    So stupid are they, as a program manager I had to confront the organizations head who was so tight with the pursestrings that we were underspending our grants, jepoardizing current and future funding amounts. I actually had to explain to this fool, that unspent grants simply arent reimbursed to the organization, in a “use it or lose it” system. The fools were behaving as though they could keep profits by lowering expenses. MBA “thinking” has infected all levels of society, despite Bush II and Rick Scott proving what a terrible thing that is.

  18. fff

    Pharmacy is now a cost maker for health care, often filled at a loss. No more ‘fat’ there, 14 hour shifts at CVS with no breaks, untrained ‘techs’ now doing much of the pharmcist owrk.. Yes, PBMs are responsible, also Walmart, which subsidizes lower prices (only those on their list), other non-list items are more expensive than independent pharmacies.

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