Equality, Relativity and Democracy

The World Record for solving a Rubik’s Cube is 4.73 seconds. My kids can do a 2×2 in under a minute. I have never solved a Rubik’s Cube.

Inequality has existed for as long as we have.

The Greeks developed philosophy, literature and architecture when Britain was filled with “…illiterate tribal peoples, living at a primitive level.”

The Chinese invented “…the compass, printing, paper, rudders and the porcelain plates that the West call ‘chinaware’…” centuries before Europeans (Wealth, Poverty and Politics, by T. Sowell).

Equality

Some use income to measure fairness and morality. High incomes indicate greed and oppression.

Economic egalitarians believe in equal economic outcomes, regardless of effort and circumstance.  Egalitarians oppose meritocracy.

In Greek mythology, Procrustes’ bed fit every traveller, no matter how tall. Procrustes stretched short travellers on a rack and cut the legs off tall travellers: the original one size fits all.

Economists say that we should look at production, not income. Henry Hazlitt (quoted in Sowell) wrote:

The real problem of poverty is not a problem of “distribution’ but of production. The poor are poor not because something is being withheld from them but because, for whatever reason, they are not producing enough.

A bit harsh perhaps, but barring misfortune, no doctor is poor.  Even the lowest paid specialties earn 4 – 5 times the poverty line in Ontario.  But some doctors earn 20 times as much as their lowest paid colleagues without 20 times the effort.

The problem comes, in part, from price fixing.  Prices normally indicate the scarcity of a product or service. Fixed prices remove information that prices would otherwise signal. Fixed prices produce bizarre results.

For example, the highest billing specialist in one field can make 5 times what the highest billing specialist makes in another field.

Both work flat out, often over 80 hours per week.

Both do good work. Both help thousands of equally needy patients. Both follow the rules and pay similar overhead.

The billing difference comes from the arbitrary prices set on the services provided.

Relativity & Democracy

Relativity has plagued medicine for as long as doctors have had fees.

It got worse after 3rd party payers (governments and insurance companies) took control and fixed prices.

Patients used to know the cost of medical services and could adjust their behaviour accordingly.  For non-urgent care, patient demand impacted price. Although imperfect, at least patients had some impact.

With monopolistic control of prices, relativity becomes political. Too often, it depends on who has political power.

Before we tackle relativity, we must ask whether we believe in representative democracy.

The Greeks denounced direct democracy from the start. Direct democracy is mob rule: Whoever has the most votes gets to crush the losers.

Western democracy grew as representative democracy based on a constitution. People elected representatives to act within the confines of a constitution.

Democracy crumbles when majority governments do whatever they want and trample on minority opinion.

Too often, we design brilliant technical solutions for relativity but apply them with majority rule. Representative democracy based on a constitution of shared principles might improve our efforts on relativity.

Value

Inside the state monopoly on medical care, our attempts at price fixing will be halting and imperfect. We might start by asking whether a service adds value, and if so, by how much?

Doctors usually complain that procedural work is overvalued; no one gets paid to think anymore. But the opposite holds true in some specialties, such as radiology. Radiologists earn more reading scans than doing procedures.

Merit. Effort. Value. Equality. Democracy. Heady concepts, but we must wrestle with them all.

We need to find a way towards unity. We must take baby steps towards consensus. But we cannot wait too long.

Those who refuse to change only increase the chance that government will impose a clunky solution.

Those who demand rigid economic equality only increase the chance that the status quo continues, making things worse, not better.

Relativity impacts access to patient care in two ways: Governments try to limit access to costly services, and medical students avoid training in undervalued specialties. Either way, patients lose out.

Maybe that’s a good place to start work on a solution. In a world of inequality we should ask: How does relativity impact patient care?

Photo credit: theimaginativeconservative.org

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14 Replies to “Equality, Relativity and Democracy”

  1. Absolutely spot on Shawn. Relativity, as it has been applied in the OMA, is based on a zero-sum assumption. Given a fixed pot of money, how do we divide it up? That fixed sum, even if it is notional, places an impetus to judge a price for a service at the expense of some other service. The government has been playing us for fools with this simple lever of a stipulation at the outset of almost every negotiation that ends with us devalued a little bit more.
    To escape this trap, we have to revisit everything in the Schedule of Benefits and look at what it is actually worth. In this negotiation, we cannot just agree to a fixed larger (presumably) pot of money to then be fought over with the bigger dogs winning again. We need to set a price on a physicians time, skill and training level. Modify the price for the time it is delivered (after hours premiums). Add on overheads needed to deliver a service – procedures have higher overheads if delivered privately than in a hospital. i.e. a wage rate that is fair and that does not arbitrarily value say sawing bones more than massaging minds or diagnosing disease.
    Once we have these rates, we then charge for every service provided – no fee work period.

    1. Great comment, Ernest!

      We need a deep re-think. I’m encouraged to see the new relativity committee….I suspect they will want to go deep as you suggest.

      Thanks for posting!

  2. ” In a free market , where no person or group of persons can use physical coercion against anyone, economic power can be achieved only by voluntary means : by the voluntary choice and agreement of all those who participate in the process of production and trade .

    In a free market , all prices, wages, and profits are determined — not by the arbitrary whim of the rich or the poor, not by anyone’s ‘ greed’ or anyone’s need ( and not by government bean counters) –but by the law of supply and demand….a person can grow rich only if he or she is able to offer better values— better products and services at a lower price —than others are able to offer.” ( Ayn Rand….a red flag to statists and collectivists”).

    Wealth in a free market , is achieved by a free, general, ‘ democratic’ vote of the participants — not by the all wise , all knowing Procrustean central planners , who impose their will on our profession , , distorting market forces….it is they who hopelessly distorted relativity in our fee structures.

    If you want to look at the free market in action and want to see how our own fees have been suppressed by the powers that be , just look at how the work of other freer professions are valued and rewarded….from plumbers to electricians to lawyers to ….

    1. I always enjoy your comments, Andris. Thanks for sharing!

      I wonder what you think of injecting some element of market behaviour inside our publicly funded system? Does it have to be as rigid as we have it now?

      Thanks again

  3. Good piece, Shawn. Not sure if you had a chance to read my own thoughts on the issue back in April, but doubtless you’re a busy man these days.

    If I could throw in one important point, it’s one that I was reminded of by a friend that’s an economics professor: it’s only very, very recently that economics has tried to become an independent “science”. The discipline was traditionally called Political Economy, recognizing that economic policy and even economic *thought* reflect the political realities of the day. It was true for Ibn Khaldun, Adam Smith, Marx, Friedman, Galbraith, and most recently Pikkety.

    Failure to do so results in all manner of policy disaster, from the cult-like adherence to supply-side economics in the U.S., to the renewed interest in Marxism(!) making its way through university campuses.

    Health care in Canada, for better or worse, doesn’t obey the rules of classic economic theory, and doesn’t seem terribly responsive to the ordinary “rules” of politics. IMO, tackling relativity needs to focus less on heady principles, and more on good-faith consensus between traditionally tribal factions.

    1. Great points, Frank!

      I am so sorry to have forgotten about your piece. Please post the link to it here. Readers would love to see it.

      I did not know the history you shared about economics. Too many of us pretend that economics is a strict science entirely divorced from political thought. I also loved the fact that you showed some surprise at the renewed interest in Marxism. Through some of our debates over the years, I wasn’t always certain whether or not you held a soft spot for the old revolutionary. 😉

      Great to have you share a comment, as always.

      Cheers

      1. Shawn,

        If I were a Marxist at heart, perhaps it would explain my apparent blase attitude towards death. God knows Marxism in practice came with a hell of a lot of it.

        As always, I’m a good deal more wordy than you. My three-parter on the topic:

        http://drwarsh.blogspot.ca/2017/04/a-theory-of-relativity-part-i.html

        http://drwarsh.blogspot.ca/2017/04/a-theory-of-relativity-part-ii.html

        http://drwarsh.blogspot.ca/2017/04/a-theory-of-relativity-part-iii.html

        Cheers
        Frank

  4. Your solution is ” good-faith consensus between traditionally tribal factions”.

    Trick question here, how long does it take to record the 20 minute EEG that is reimbursed for the same fee as when Ronald Reagan was President of the USA? (Answer 20 minutes.)

    Cataract surgery required inpatient hospitalization before the Berlin wall fell. it is now day surgery and about 15 minutes in the OR. The fee remained about $400. If you do 25 in an afternoon how much do you bill? ( Answer – more than a geriatrician bills in one week)

    The first commercial CT was 1974. CT was a vague imprecise image and it took all the computing power then available. (Do you remember the IBM XT in 1982 had 5¼ inch floppy disk drive with a 10 MB Seagate ST-412 hard drive?). Ignoring entirely increases in technology, how long does it now require to undertake and interpret a CT or MRI?

    The evolution of novel and experimental into readily and commercially available is accompanied by cost alignment. The point of this is that medical services and the fees applicable have distorted “value” of the specialty.

    In dividing up a single physician budget bone among dogs of different specialties you may expect honor, gentlemanly behaviour and generosity. It has not been my experience that all have been prepared to share good fortune.

    1. I don’t doubt that there’s a lack of generosity and gentlemanly behavior, but that’s not a prerequisite for good-faith negotiation. The bottom line is that either doctors are going to agree that their relative pay is a problem and work to resolve it, or it’s time to break up the medical association.

  5. “Remuneration of physicians

    All stakeholder groups that we interviewed identified
    this as a major problem, although not for the
    same reasons. Representatives of medical associations
    and associations of interns and residents questioned
    the fairness of the current processes of fee
    bargaining and allocation and their effect on the
    level and distribution of income within the medical
    profession. Most other groups (including deans of
    medicine and representatives of affiliated teaching
    hospitals, provincial licensing authorities and provincial
    governments) cited the fee-for-service method
    of payment as the fundamental problem with
    remuneration.”

    Toward integrated medical resource policies
    for Canada: 6. Remuneration of physicians
    and global expenditure policy
    Greg L. Stoddart, PhD; Morris L. Barer, PhD
    JULY 1, 1992 CAN MED ASSOC J 1992; 147 (1) 33

  6. Many physicians do not appreciate the gross distortions in the fee schedule that have crept up over 40 years.

    The Central Tariff Committee took major decisions on fee allocations without sufficient information. The prejudices of the individuals contributed to the feel allocation. Once a fee was allocated it became grandfathered. If the fee was too low or too high an weffective mechanism for correcting this does not exist.

    I was a neurology tariff rep in 1979 and found my experience at the CTC utterly humiliating.

    If a patient has blackout and an the patients need an EEG and ECHO as part of the work up it may take 2 months to get an EEG and 2 days to get and ECHO. This is ABSURD and the reason lies clearly in the fee schedule.

    Relativity should be OMA and MOH’s top PRIORITY. Do not allow the privileged groups sabotage attempts at relativity. They have done this repeatedly over the years couched in sophisticated language.

    I am retiring soon and I can see plastic surgeons, neurologists and family doctors scrambling to get EMG consultations in Scarborough. A time may come when plastic surgeons will operate on carpal tunnel syndrome without nerve conduction studies an rely on ultrasound which has a much lower sensitivity and specificity in diagnosing CTS.

  7. “New Brunswick has made public how much it pays to each of its doctors.

    The province released the names of physicians along with the amounts each received in payments for providing medically insured services last year.

    In doing so, it has joined a growing list of jurisdictions that is turning to public disclosure of such data.”

    http://www2.gnb.ca/content/dam/gnb/Departments/tb-ct/pdf/OC/upmpl-lnvpm.pdf

    https://www.thestar.com/news/gta/2017/06/27/new-brunswick-joins-growing-list-of-provinces-who-reveal-how-much-they-pay-doctors.html

    http://globalnews.ca/news/3555516/new-brunswick-medical-professionals-paid/

  8. There are lots of questions that arise.
    If Doctors argue about their relative value it leads to a break up in the group.
    It may be better if the public or government decided on their relative value.
    Fees for procedures verses time in counselling or consulting are difficult to compare.
    House calls for physicians would have to triple in value to change behaviour.
    Why should Nurse Practitioners make more money than some of their Physician colleagues with 50% of the work volume.
    How do you compare the value of physicians whose educational history may be years apart.
    Some tradesmen are halfway to paying off their houses by the time some consultants begin to practice their specialty.
    Is there such a thing as fairness.
    Lifestyle choices and retirement security are more important to some and the benefits of MD management and our group insurance packages help us all to sleep at night.
    In truth, the marketplace has always determined value ,and when the marketplace is removed inconsistencies are bound to happen. In healthcare, we cannot fully predict outcomes. Should we penalise patients for their bad habits, like smokers or drinkers, those who choose to eat more than they should, the addicts or those with genetic predispositions to disease, or occupational or environmental health hazards.
    Should we give credits to those individuals who lead a clean life like insurance companies credit drivers who choose to drive more carefully.
    In all , I don’t envy the task of the Relativity committee. I think they have an impossible task of trying to be fair to all physicians which is probably why the committee consistently fails to come to a satisfactory conclusion every time it attempts this .
    I don’t think the public nor government could do a better job.
    I also suspect that the conclusion will always be a work in progress-just like life!

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