The American Dilemma and How We Can Fix It

THE PRICE OF VIRTUE

A man was attending a seminar and at the end of the day he went into his hotel’s bar to relax with a drink.  He sat down, placed his order and pulled out his notes from several of the sessions that he thought were most helpful.  As he sat there reviewing these a very attractive young lady sat down at the bar several seats away from him.

He couldn’t help notice her as she was truly stunning, very well-dressed and seemed to have an outgoing personality.  Much as he tried to keep his mind on the seminar material he found her too distracting.  So he put away his paperwork and moved to take a seat next to her, asking her if she minded if he joined her.

“Not at all,” she said.

So they introduced themselves and began chatting.  This young lady was not only bright but she was a brilliant conversationalist and the man realized how much he enjoyed her company and how much he desired her beauty.

After he had purchased several rounds for both of them he finally got up the pluck to ask her the question that was foremost on his mind.

“I hope you won’t be offended,” he said, “But if I were to offer you ten thousand dollars would you sleep with me?”

He waited for her reaction, half expecting to have her throw her drink in his face.  But instead, she paused and said, “Why, yes I would.”

“Well, would you sleep with me if I only offered you twenty dollars?”

The young woman looked very offended and said, “What kind of a girl do you think I am?”

The man replied, “Well, we’ve already established that.  Now we’re just negotiating the price.”

Although the intensity of conversation on the subject of Wall Street and banking abuses has died down in recent weeks, there are many of us who feel that financiers who make huge salaries are being overpaid and are taking risks that threaten the collapse of our financial system.  Perhaps there is some truth to those statements.

As our story illustrates, with few exceptions, everyone has a price.  And when the prize is the potential of earning billions of dollars, there is no question that even those of us of the highest morality might find the temptation  too great to resist.  In part that explains the demise of Lehman Brothers and MF Global – among many who have fallen by the wayside.

Although I in no way mean to serve as an apologist for the business of banking, I would say, in their defense, that making money is the sole objective of their business.  But if they do that in an irresponsible way that threatens the well-being and security of the rest of us, it is not only our right but our duty to object.

Speaking of finance, there is another industry which is playing its part in contributing to our outstanding and rising deficits which also threaten our well-being.  That is the business of healthcare.

Now I realize that most of us have a view of our doctors as trained specialists who have spent years learning their craft.  We see them as being charitable good-doers who want nothing more than to see all of us whole and well.  And, of course, there are many in this profession whose focus is exactly that.  They run clinics for the poor and survive through small contributions.  God bless them.  They are true beacons of light who have taken the meaning of their oath seriously and are living it daily.

But if our healthcare system depended solely on these charitable souls, the line to get in to see your doctor would extend across the country.  No, most of us depend on the dispensation of our medical services from practitioners who have a dual mandate – to take care of the sick and to make a profit doing it.  Unless we all suddenly start receiving Manna from Heaven, each of us has to do something to pay our way through life – a practice which we call “earning a living.”

Although it is not our customary way of thinking about it, I believe that it is only fair to call medicine, just like banking, a business.  And just as in the case of egregious behavior on the part of some bankers, we also have the right to call into question the motivation which guides some in the medical industry.

About twenty years ago I remember speaking with the partner in a consulting firm that looked to improve the efficiency of the way in which hospitals functioned.  He was a good friend and the two of us used to share horror stories about our respective businesses.

Randy told me about speaking with two hospitals (the only two hospitals) in a relatively small town in downstate Indiana.  Both of them were struggling to make it financially and they needed his firm’s help.  So he sat down with the administrators and senior staff of the hospitals over a week’s time to review their activities.  He returned to Chicago and spent a few days writing his report and scheduled a return visit to discuss it with both staffs.

Given their precarious financial positions, the first thing on his agenda was to discuss with them the fact that they had both placed orders for a new piece of medical equipment.  It was some sort of imaging machine and the cost which each had committed to incur was over $1.5 million.  The doctors on staff at both hospitals were in agreement that once it was delivered, the equipment would only be used once or twice a month.

So Randy suggested that one of the hospitals cancel their order and that they share the cost of the equipment and decide at which hospital it would be installed.  As he put it, describing the reaction to this recommendation, “You would have thought I was talking to a bunch of nuns and called the Pope the Anti-Christ.”

Despite the frosty reception to this statement he went on to explain the finances which lay behind his thinking.

“You can expect to be reimbursed approximately $2,000 per procedure.  If both hospitals combined do two of these a month, that comes to about $50,000 per year.  With only one imaging machine it would take thirty years to recoup your investment – and with two, it would obviously take sixty years.  But with the progress that is being made in this kind of technology you can expect that this equipment will be obsolete in ten years or less – so the fact is that you will never recover your investment – not even on one machine.  Buying  two is even more absurd.”

He continued his presentation and was gratified that they liked at least some of his proposals on how to improve efficiency.  Sadly, these represented the smallest improvement in the hospitals’ balance sheets.  They rejected all those which would have truly made a difference.  And, simply out of hubris, both hospitals took delivery of their new imaging equipment.  One hospital couldn’t have its rival look more modern and up-to-date than they were.

Several years passed and Randy and I got together one night for dinner.  During our conversation he asked if I remembered his telling me about these two hospitals.  I had.

He said, “Well, the end of the story is that one of them closed their doors last week.”

When we think of holding on to our virtue we often see this in terms of being able to resist the temptations money offers.  But if we really delve into the subject, being able to overcome our egos is just as significant a challenge.  We see that in the behavior of our “celebrities” and occasionally we see that in two small hospitals in southern Indiana.

Does virtue have a price?  Indeed.  And if we forego our responsibility to hold on to it the price is very dear – and it is one for which we all pay.

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Comments on: "THE PRICE OF VIRTUE" (7)

  1. Well as a past CEO of a large hospital providing a full range of services I understand just how expensive the provision of health care is these days. There has been quite a change from the days when I grew up. People just did not go to doctors or the hospitals unless it was a life or death issue in those days so costs were not as significant as they are now. In today’s world we schedule regular visits to check on our health and are encouraged to do that. A better understanding of healthful practices means we now live to average ages that are far above the average of the past. So the huge costs of today are because people live significantly longer and consequently are sicker in their final years. In the “good old days” people had a heart attack or got cancer and died. These days we patch them up using technology that costs millions of dollars. costs of which have to be recovered. This is the age of rising expectations. In my growing up days we got married and made our own furniture piece by piece as we could afford it. These days people get married and go into debt immediately because they want everything in the home as they start married life together and they need a super salary to start off with. None of us would like to go back to the “good old days” so it looks like we will be stuck with high costs of everything including health care unless we can lower our materialistic expectations.

    • Sadly, we are just beginning the process of understanding the value of prevention rather than treatment. If each of us took more responsibility for his or health, we would all be better off.

  2. Your point on ego is dead on. It’s a problem I think we all have (at least I sure do!). Your health care example of the machine is a scenario I have seen played out many times in small town hospitals, gotta have the latest, don’t have enough use for it to keep the operator qualified but (insert town here) has one so we have to have one also.

    It acomplishes absolutely nothing (we have plenty good enough transportation to move a patient 10-50 miles, if necessary) except to drive up the cost of care and magnify the egos of doctors and administrators. Most of the time they don’t need the boost, either.

    And, yes, your health and health care is your responsibility, not the doctor’s, not the hospital’s, and certainly not the government’s. The only solution I see is for routine care (including prevention) to go back to being out of pocket so the consumer is back in the loop and has a reason to control it.

    Think that’s too draconian? We have a doctor here, fully qualified, takes absolutely no insurance payments (at least for routine care, beyond that I don’t know) the cost for an office call is $25 compared to the rest at about $100-150.

    BTW, that’s one of my favorite jokes, with a nasty pinch of reality.

    • I wish we could clone you. We need a lot more people with ordinary common sense. (It doesn’t surprise me that you live in the midwest).

      • I think it’s that Midwest air, too. Witness, you. By the way I grew up on the edge of the Indiana suburbs of Chicago. I’ not quite as countrified as I like to claim.

  3. Wow. Just wow. This is deep on so many levels. I mean, why can’t hospital administration think like this? What “hubris” is more vital than saving the entire system?

  4. They tell me that dogs have short term memories. I don’t know if that is true but I had a very good friend whose companion dog adored me. The man moved but returned for a visit three years later. When he got out of the car, his dog spied me from across the street and bounded over, jumping up on my shoulders and licking my face totally clean. Best facial I had in a long time.

    I would argue that it is people who have the short term memories. We ignore things that have been repeated in history countless times – and then wonder what went wrong. Chief among those is that short term solutions which have no basis in good judgment will inevitably result in long term resolutions which will not conclude well.

    Hence the demise of a small hospital in downstate Indiana.

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