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The Decent of "the Professions"
and the Rationing of Health Care

The Ideal behind "the Professions"

Historically, professions and businesses have varied on several critical variables. Business, in a free market, is largely unregulated and unlicensed.  Anyone can do it and anyone can get rich or broke doing it. It is, at its most benign, highly competitive; at its worst (but most financially rewarding to the owners), downright predatory. Because the competition is unregulated and unlimited, many businesses fail and more personal fortunes are lost than gained ("It takes three generations to build a fortune but only one to lose it"). There is no safety net. Caveat Emptor (let the buyer beware) rules. You do not expect to hear the truth from a used car dealer. Similarly, quality standards are not absolute, they are dictated by what the market will bear. For example, if customers are so desperate for software that they will continue to pay full market value for pre-beta quality software packages, the standards for pre-beta software sold as the polished version will continue to drop until customer resistance is met. Prices reflect the cold realities of supply and demand unless a business can be clever enough to manipulate it. Failing to anticipate and adjust prices to fit demand will cause a business to fail in the end. What matters is profit on investment. Consumers are no better, showing loyalty only to maximizing the return on what they spend.

In brief, the rules in the free market may not be fair but they are clear. The rules favor members of the brightest, toughest, and especially the wealthiest families because they have the resources to give and take the biggest drubbing. Everybody knows that it is an adversarial system where I want your money and you want mine. Neither of us can trust anything the other says because even when we are taking each other’s best interest into consideration, it is only to further improve our own position in the market. Survival is profitability; it is not related to whether we are good or decent people, or the size of our hearts; it is the bottom line of our balance sheets. Its not a perfect system but it at least its more humane than armed combat and so far it has worked to produce enough societal wealth to get our species out of the caves.

The problem is that some essential services in life do not lend themselves to delivery through an adversarial relationship between the seller and buyer. Historically, these relationships are those of doctor and patient, lawyer and client, clergy and parishioner. All these relationships involve the buyer being extraordinarily vulnerable for several reasons: First, if these services are rendered incompetently by the seller, the outcome for the buyer could be death, incarceration, or, depending on your religious beliefs, Hell, itself; second, the services provided by the seller cannot be delivered properly without the buyer honestly disclosing his or her true condition; third, for the seller's service to be effective, the seller must continue to work on behalf of the buyer even when it would be more personally more profitable to abandon the client in favor of another client (especially a competitor of the client).

The free market model simply does not usefully extend itself to these essential services. It makes a dangerous and uncertain life more dangerous and uncertain than it needs to be. In response, a new socio-economic class evolved: "the professions." Members of this class were not landed gentry but their standard of living was closer to that group than the peasant class. The members earned a comfortable living, commensurate with their education, training and experience but not beyond it (as they might have as merchants or traders). On the other hand, competition in the professions was usually limited by access to education and training so there wasn’t the risk associated in practicing a profession that there was in tent making or diamond trading. Because education and training played such a prominent role, the nature of the work in the professions tended to be more varied and interesting than in commerce. It also helped people directly. In a sense, the professions occupied a comfortable niche between the contemplative ivory tower of the academics and the sweaty, dangerous trenches filled with those creating wealth. The work in the professions was more mundane than in the academic world but paid better; the work was more genteel than the tasks of the merchants, traders (and later, industrialists) but paid worse.

Unlike the free market, the professions have had strict rules to insure there members will stay advocates for their clients and resist opportunities to become business adversaries or personal rivals. The most important rule of every legitimate profession is a version of "do no harm to people who have entrusted themselves to you." This rule leads to the prohibition of many practices that participants in a more competitive market cannot avoid. For example, most professions traditionally prohibit

Providing services, your clients do not need.

Making misrepresentations about your skills and abilities or the quality of your service.

Using the strength of your professional relationship to obtain something beyond your fair fee.

Revealing any information, you obtain in the course of practicing your profession.

Using secret alliances to make a better deal for yourself in conflict with the interests of your client.

Using supply and demand as the sole basis for your fees.

Most of these prohibitions are self explanatory except the one that involves supply and demand and fees. Think of it this way, When the King cried, "My Kingdom for a Horse," a horse trader would have been a fool not to say, "I’ll take the Kingdom for the horse but only if you give me your coat and wallet too." Had the King cried, "I’ve broken my ankle, my Kingdom for a splint," any physician who attended him should have been expected to say, "You don’t need to give your Kingdom, all I want is my normal fee." The reason for the difference is that for the horse trader, the King’s plight would be the opportunity of a lifetime. It would also make up for the occasions the horse trader had taken a beating on the price of a horse because he was in the desperate situation of having many hungry horses and no buyers. For the physician, desperation was for patients and their families, it was not for doctors. Because of the good, reliable living the physician was sure to keep making, desperation was largely a stranger to his or her professional life.

Having a social "caste" loosely termed "the professions" has worked one way or another throughout most of the history of Western Civilization. It has provided upward socio-economic mobility to those who were willing to delay immediate gratification in favor of an extended and arduous education and downward socio-economic mobility to children born into the class who were not willing to repeat the rigors of their parents’ generation's training. It also has met the needs of the other socio-economic classes by having provided essential services without excessive risk for economic or physical harm to the patient or client. Over time, "the professions" model has been extended to include other service sole-proprietorships, among them sea captains, architects, surveyors, dentists, podiatrists, and psychologists.

Ethical Abdications

As you probably have already noted from your own experience, the ideal of "the professions" is not the same as the reality of "the professions." Unfortunately, the root of all evil is active everywhere. This situation has become increasingly worse in this country since the Second World War. Professional people were jealous of the industrial and commercial wealth that was generated solely from the fact that this country was the only major industrial power in the world that had not been decimated by the war. The physicians began to raise their incomes beyond incomes beyond what was commensurate with their education training and background; the increases in their incomes was also unjustified by the small risk they took to practice their profession in a highly regulated environment. The doctors wanted the safety of the professions with the spending power of top business executives. The medical profession used the "professional birth control" provided by their licensing board and the admissions policy of medical schools to keep the supply of new physicians down as demand for doctor’s services rose with the post war economic growth and population baby boom. They lowered supply further requiring specialty boards and additional training as entry-level requirements to the profession. Many older doctors retired while younger doctors stopped practicing so they could return to school for the additional training. Basing their fees solely on supply and demand, it got to the point that in most cities, the term "medical specialist" and "really rich guy" were synonymous. This phenomenon was not missed by the public nor was it appreciated.

Attorneys watched as doctors’ income passed their own. There were too damn many lawyers. The lawyers were not in as good a position to artificially stifle supply of attorneys since the cost of educating an attorney was so much lower than educating a doctor. Unaccredited, for profit, law schools (formed by lawyers who preferred to teach than to litigate) pumped enough new lawyers into the legal system that supply did not grossly exceed demand like in medicine. If they could not join the doctors, the basest, least clever attorneys decided to beat them, and a whole new breed of attorney was born: the malpractice attorney. The public now so resented the wealth and arrogance of physicians that it was not hard to find a jury who would be happy to arrive at an astronomical sum to award a plaintiff for damages. The lawyers got their 40% and they could again afford the same country clubs as the doctors.

The brighter lawyers noticed that it was not just professional birth control that was making doctors rich. It was payments from insurance carriers who were happy to pay doctors whatever they charged since they could pass the cost on to consumers in the price of their premiums. What other kind of insurance did people and businesses carry? So automobile, homeowners, and general liability insurance carriers became the target of the personal injury attorneys. So many lawyers proposed preposterously high damages in personal injury suits that a damage award that would have once been laughable became the norm. The public came to view a personal injury as an opportunity to win liability lotto in the courthouse. Juror’s resenting their climbing insurance premiums, retaliated (at least in their minds) against the insurance companies by awarding even higher sums in personal injury suits. Not satisfied just to be ambulance chasers, the personal injury lawyers even began to advertise for potential "victims" of personal injury. The beauty of a personal injury lawsuit was that a single lawsuit could make more than just the lawyer for the plaintiff and the lawyer for the defendant busy: since it was easy to spread the blame to more than one defendant and/or insurer, each defendant and/or insurer needed to be represented by his or her own independent counsel. A person who slipped on a banana on their neighbor's sidewalk could end up indirectly providing work for a dozen different attorneys when they sued the neighbor.

As was mentioned above, the mechanism for the post-war redistribution of wealth into the professions of law and medicine was through insurance carriers: Doctors' incomes rose through payments from medical insurance carriers and lawyers' incomes rose from payments by automobile, liability, & homeowners insurance carriers. The insurance companies’ incomes rose because they just passed the increased premiums on to the public and were satisfied to take their actuary-determined fixed percent slice of a geometrically growing financial pie. It was a happy ride if you were one of the railroad engineers, conductors, or passengers on the insurance gravy train but it wasn’t so happy for the average citizen who was only paying the ever-growing freight with what used to be his or her discretionary income. Psychologists, seeing a few empty seats at the back of the gravy train, greedily climbed aboard and were happy to discover they were sitting right behind the psychiatrists. Learning quickly from their fellow passengers, Psychologists and Psychiatrists formed partnerships to open hospitals for least likely population to be helped: alcohol and drug addicts. Not only was this a tough population help, it was declining in numbers of its own accord. The per capita consumption of alcohol at the time of the Revolutionary War was approximately 4 times what it is today. Worse, it was entirely in distilled spirits, which are metabolized more fully, and quickly than wine and beer. This statistic is not to say that alcoholism and drug addictions aren't a tragic problem for many people and families today. It is to say the media were successfully manipulated by the Addiction Industry to believe the problem was growing; not shrinking. These new Barons of the Addiction Industry charged the insurance companies for full hospital beds at the same rate as if the patients were in intensive care unit beds.. The course of treatment was never less than 30 days and often several months. Despite the grandiose claims made by the Addiction Industry (not to mention the claims made in the offices of corporate human resources directors), the one-year failure rate was 80% in the best facilities. There was nothing new to that statistic as far as treatment goes. Turning this black eye into a feather in their cap, the Addiction Industry just took the patients that had fallen off the wagon and recycled them through the program declaring the recycling to be a therapeutic success. Before it was over, these scamming psychologists and psychiatrist were managing to rip off 5% of the total annual expenditures for medical care.

Reputable and ethical doctors, lawyers, and psychologist didn't participate in either these fee, treatment or gratuitous lawsuit abuses but remained silent to them They raised their fees when their patients or clients asked them why they were charging so much less than the other in their professions. They justified their fee increase saying they didn't want people to think because they didn't charge as much they weren't as competent as their colleagues. Still, they profited personally instead of putting a stop to those who were ruining the reputation of their profession by treating the profession like it was a business.

The Great Medical Come-Uppance

The insurance company corporate executives finally noticed that doctors and lawyers (and even a few psychologist) were making more money than they were. Now that pissed them off. They didn't know what to do about the lawyers but they saw a great upcoming opportunity to change things for the doctors. That opportunity was taking place in Washington, D.C.

It had been known for perhaps a decade and half that the entire Social Security system was going to go in the tank because Medicare was impossible to fund. The U.S. Government, it seems, had insured the wrong end of the age spectrum when it deducted a Medicare premium from the checks of workers. It would have much better to deduct the premium and apply to health insurance during the working years where a small percent of the total lifetime medical costs for the average individual occur. Instead, it seems the Social Security Administration elected to give that lucrative segment to the private insurance industry; the U.S. Government insuring instead, the population over working age. Unhappily, 90% of an individual's lifetime medical costs are run up in the last year of his or her life. These costs are, for the most part, paid by Medicare. Oops. The crisis was predictable because it was simply a matter of demographics: as the population aged, the costs would become greater and greater until Medicare premiums could not meet Medicare expenditures. The drop-dead date was 1997. What to do? How could Congress and the White House ration medical care to old people? It was a cold business. It turned out to be easy: Ration medical care to young people first! All the elected officials had to do was turn their heads the other way when the health insurance industry pulled off a leveraged buy out of the medical profession paying for it not by liquidating assets but by liquidating services.

Pros Pros to the Rationed Health Benefits System

Medicare did not pull the entire Social Security System down with it.

Cons Cons to the Rationed Health Benefits Insurance System

How did the Rationed Health Benefits System Industry solve the Medicare funding problem so easily? How did they sell the working age public on Rationed Health Benefits System? The health insurance carriers (who own the Rationed Health Benefits System) substantially lowered Rationed Health Benefits System premiums and raised non-managed plans astronomically. The health insurance industry simply made the working age American an offer he or she couldn't refuse. Once the average working age American had to settle for managed health care, the United State Government used the same technique on Medicare recipients to force them to join Rationed Health Benefits Systems.

You might be wondering what miracle of free market economics is at work and:

How can Rationed Health Benefits Systems install several layers of management between the patient and the medical services and still lower health insurance premiums low enough to save Medicare?

How can Rationed Health Benefits System install several layers of management between Doctors and their paychecks still lower medical premiums enough to save Medicare?

How can Rationed Health Benefits Systems hold meeting after meeting between and within all these new layers of management and still lower health insurance premiums low enough to save Medicare?.

How can the Rationed Health Benefits Systems pay millions of dollars to top executives every year and still lower health insurance premiums low enough to save Medicare?

How can Rationed Health Benefits Systems have enough money left over to pay dividends to their corporate shareholders and still lower health insurance premiums low enough to save Medicare?

How can it be that during the same period of time that the average stock rose four fold in value, the managed health care stocks have risen 13 fold?  Where is the wealth being created to drive these values?

Well, we know the doctors certainly aren't getting paid that much less than before (maybe they took a 25% hit, some specialties a little more). So where is the difference coming from? Unfortunately, the free market has no aversion to increasing profits by lowering the quality and quantity of service until it meets customer resistance. That means that not only has the public had to accept denial of medical services necessary to reduce the cost of Medicare, the public has also had to accept denial of services to pay for the enormous additional overhead supporting the Rationed Health Benefits System. Additional medical services have had to be denied to pay the movie star bonuses of Rationed Health Benefits System top executives and even more services have been denied to pay dividends to the Rationed Health Benefits System shareholders. That's spells out to be a lot of people being denied the right to continue living who previously would have been saved, no questions asked. Since the medical insurance carriers took their profits on a fixed portion of the medical cost pie, for the carriers to keep their total profits the they same as they were reducing the total size of the pie to accommodate Medicare, the insurance carriers' piece had to suddenly grow inversely to the size of the pie. A smidgen of how they increased the size of their piece was from the doctors' paychecks but the overwhelming majority of the remainder they stole from the quality and quantity of your medical care. If ever their was blood money, this was, and this is, it. The free market takes no oath to "do no harm: (if you doubt it, click here to check out where the California Department of Insurance sends you to ask for assistance  when your life--or the life of someone your love--is threatened by a rationed health care manager)".

Identifying with the Aggressor

How difficult was it for the insurance carriers to buy the medical profession? It was as easy as the U.S. Navy 6^th Fleet capturing Little Toot (except that the doctors did not put up the fight Little Toot might have). The insurance companies used Rationed Health Benefits System to confront the doctors with a slight business risk: Just like in the real world. Chicken Little would have been embarrassed at how cowardly the doctors behaved. The doctors, it turned out, were not the clever business people they though they were. Physicians stampeded to trade their professional practices for the chance to be a Rationed Health Benefits System employee before this new train could leave the station without them. All they had to do was sell out their patients and dump their professional standards.

As you might have surmised, employees are not professional people; they cannot be. They cannot be because they work for a business that must act like a business if it plans to stay in business. They cannot afford to provide adequate care any more than a software company can remain competitive delivering anything but pre-beta test quality product if that's the standard in the market. A doctor’s patients are no longer people but individual little organic profit centers because each patient represents income from a paid insurance premium. A doctor's job as an employee is to drive profits up by driving costs down. Cost come from providing medical treatment. Therefore, the doctor’s job is to withhold medical treatment to just before the point of customer resistance. You see this phenomenon happening already when you get the anitibiotic your plan will pay for instead of the antibiotic you really need or when your previously incurable medical problem is solved but your plan decides the cure isn't part of your coverage. Remember, every time one of the doctor’s organic profit centers receives any medical services, no matter how vital or necessary, that little organic profit center becomes less profitable for that financial quarter. In turn, that loss of profitability is shown on the bottom line for that quarter on the spreadsheet a well-paid financial analyst who projects that quarters revenues and expenses over the whole year. That report is handed to the corporate controller who prepares the reports for the SEC. When the corporate controller’s assistant is finished adding graphs, diagrams and photographs to the report, it is bound and handed to the corporate CFO. The corporate CFO’s staff prepares Power Point slides for the CFO’s briefing of the CEO and for the corporate public relations officer’s briefing of the press on the day the report is released. When the report is in the hands of the CEO, the SEC, and the Wall Street Press Corps, all of them will examine the bottom line to see if the projected earnings of the quarter will mean the Rationed Health Benefits Systems stock goes up or down. If it goes up, the CEO smiles and thinks of the millions of dollars of stock options in his bonus plan that are now worth exercising. If the stock goes down, the CEO weeps for the money he lost. In a fit of controlled rage, the CEO says, "Bring me the balls of that asshole who keeps treating sick people. I want a businessman in that clinic, not a fucking Sunday school teacher."

Back to our doctor who realizes he or she has a responsibility to both the widows and orphans who are shareholders of the Rationed Health Benefits System corporation and to the widows and orphans who are the organic profit centers under the corporations care and his line management responsibility. Which widows and orphans will he favor? "Easy," the doctor tells you, "I have a fiduciary responsibility to the widows and orphans who own stock." Even if he or she had no "fiduciary responsibility," the choice of whom to favor would not change because the doctor's promotions and incentive bonuses are based on the money the doctor can save by eliminating medical services and selling off as much personal data on patients as the market will allow "to offset the Goddam expenses these patients are running up against me." Besides, this doctor does not want to be the next doctor to lose his balls to the CEO. As if anyone in a health care profession had them left to lose.

And the Psychologists?

I regret to say that California psychologists have turned out to be no better or worse than the medical doctors when it comes to the Managed Health Care System. Psychologists have, by and large, become employees of the Managed Health Care System. Their loyalties are to the owners of the hands that feed them: The Managed Health Care System Para-professionals (clerks) who send new patients to their offices with pre-qualified numbers of visits. When these patients arrive, the psychologists adjust the fees charged to the insurance company down by about 25% of the 1995 level. That's the good part. The bad part is that the psychologists are required to fill out forms revealing the most intimate details of these "managed" patients' lives, including the intimate habits and behaviors of family members. This information, obtained from clients solely by self-report, is not validated for accuracy before it is returned to the clerks that made the referrals (authorized treatment). When these forms arrive in the clerk's office, they are not only chock full of intimate and personal information, each form is also complete with given client's name, date of birth, address, phone number and Social Security number. No attempt is made to protect the privacy and confidentiality of the patients. To repeat, your identity isn't even protected by a device as simple as omitting your name and using your policyholder number . Nothing "a managed patient" tells a therapist can be safely considered confidential between client and therapist.  Since the clerk works for a contractor who gave the lowest bid to an insurance carrier to "manage" psychotherapy service costs (to do the dirty work of denying benefits), the documentation of the private lives and thoughts of patients isn't even under the direct custody of the major insurance carriers.  Who knows what the clerk does with that information?  Who knows where it will show up next?  You don't have to be paranoid to know it won't disappear.   It might surprise you to know that as a condition of getting your claim paid, you signed a "release form" to let the managed care corporation collect all the information they want from your therapist with no guarantee on that "release form" what will be done with the information. Click here to see where the California Department of Insurance directs your complaint about your privacy being invaded by managed health care corporations (it seems the CDI has no jurisdiction over health management corporations). You can't even be sure the therapist will tell you the truth when asked about the information he or she is collecting for the Managed Health Care System because some Managed Health Care System mental health contractors will drop the therapist as a provider if he or she reveals any information about the forms the company uses.  Frankly, I don't want to be in an alliance with the managed health care corporations against the best interests of my clients.  There are a few other therapists who agree with this position and are trying to change the laws regulating the managed health care industry.  For the present, it is a very bad system and it makes the most useful therapy impossible.

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[This page last edited on 07/16/03.]

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