HELPING PHYSICIANS ATTAIN FINANCIAL SECURITY
By Robert M. Doroghazi, M.D., F.A.C.C.
The ideas for about half of these newsletters come from my reading. The other half come from my observations, personal experiences, and conversations with people.
I was leaving home to run errands. There was an unsealed envelope in the mailbox, with only my name and a one sentence note on the outside; no address, no return address, no stamp. I know that anything in the mail box can be considered mail, but this was so clearly not mail, and I had already locked the door and armed the burglar alarm, that I just put it back and took off.
When I came back, the day’s mail was in the box, but the envelope was gone. I called the PO. I said I knew that anything in the mail box might be taken, but also that the mailman routinely looks at a letter to make sure there was a stamp, etc. He agreed. I said if the mailman looked at the letter and used common sense, he wouldn’t have taken it. He replied “How can I tell my letter carrier to use common sense when he is following the rules”? I said “thank you” and let it go.
First two points:
1) I shouldn’t have made an assumption.
2) Don’t leave things in the mailbox.
This gives me a chance to make some points about bureaucracy. Webster’s provides these definitions: 1 a: a body of nonelective government officials, 1 b: an administrative policy-making group, 2: government characterized by specialization of function, adherence to fixed rules, and a hierarchy of authority, 3: a system of administration marked by officialism, red tape and proliferation.
Any group greater than one person need rules to function. Thou shalt not steal. Thou shalt not kill. Governments require bureaucracies to function. In fact, for example, in imperial Rome, the bureaucracy was often the source of stability during times of turmoil. After Rome fell, one reason the Catholic Church gained power was because it was the only functional bureaucracy in Europe.
What I want to discuss is when there are rules just for the sake of rules, when they have no productive result, or worse, when the effects are counter-productive. The bureaucratic mind seeks perfection (and to remain in power). Rather than accept that a few people will break the law, they keep heaping laws on top of laws, regulations on top of regulations, rather than just strictly enforcing simple rules.
The dangerous bureaucrats are 1) convinced they know what is best for you, and 2) are inflated by the power of their position, taking pleasure in bossing others around. But most harmful are those that 3) justify their actions by saying they are just following orders. History is littered with people just following the rules to justify their behavior.
The very competitive position of the US is being threatened by an ever-growing bureaucratic maze of regulations. Obama-care will do the exact opposite of what it professes. It will increase the cost of health care and decrease the number of people covered (see more below).
Jamie Dimon, CEO of JP Morgan (JPM) has similar concerns. Last week at the International Monetary Conference, he asked Fed Chairman Ben Bernanke “On top of these changes (the ones already imposed on the banking system), the Fed now wants to introduce 300 new regulations. Has anyone at the Fed studied what impact these regulations will have on credit”?
Mr. Bernanke replied, “It’s complicated”, and admitted no study had been undertaken.
Now for the main point of this letter. Physicians are as devoted as any professional. They pledge to put the patient’s interests before their own. Physicians (used to) work until they were finished: you were taught to clean up after your messes.
I believe the policy of restricting the work hours of physicians-in-training is one of the ways that the system is bureaucratizing our young doctors. I predict (unless it has occurred already) that in the not-too-distant future, you will hear a US-trained physician say “That’s not my job”.
This is not a criticism of young doctors. Those entering med school are just as smart, just as hard working, just as dedicated, and just as idealistic as the physicians that have entered US medical schools over the last 100+ years. Rather, I fear that the current system, as exemplified by the work rules, is geared to steal a physician’s incentive.
More and more physicians are being employed by hospitals and the government. Employment=control. I believe this, in fact, is exactly what is desired.
I ask that everyone do what they can to reverse this trend in our society toward ever-greater bureaucracy, and those of you in positions of influence in academia and organized medicine, to stop what I feel is this destructive trend toward bureaucracy in medicine.
RMD
Jim Rogers was interviewed Wednesday on CNBC. He said the best investments going forward are currencies (the Chinese renminbi) and commodities. Long-term, he is bearish on the dollar. Short term, he is actually bullish, because everyone is bearish. He mentioned silver, and hopes it backs off further, so he can buy more.
RMD comment: Rogers wrote Hot Commodities, which I have quoted often.
The summer tends to be a weak period for the precious metals, with a slight negative bias, thus possibly a good time to add to your positions. I have been adding to my physical precious metals position.
You might want to give Terra Nitrogen (TNH) a look (see chart below). The stock pays a monster dividend and has just broken out of a 3-year base (or consolidation) period to a new recent high. It is in the agricultural area, which I like. Note that it has performed well over the last several weeks, despite the poor performance of the market.
One suggestion: The spread between the bid and ask on TNH is often 0.5 or 0.6 or even more. There is no reason to give the sharpies such easy money, so put in a limit order. You’ll get filled at your price, not theirs.
In a recent newsletter (5/23) I mentioned that David Daugherty, a Social Security judge in West Virginia, approves almost every case he sees. I noted he criticized his less generous associates by saying “Some of these judges act like it’s their own damn money they’re giving away”.
Wall Street Journal (6/9/11). “The Chief Social Security Admin Judge (Charlie Andrus) in W. Va. has stepped down…Mr. Andrus’s decision comes two weeks after the SS Admin placed…David Daugherty on indefinite administrative leave”.
RMD comment: The vast majority of people are reasonable. These judges had over-stepped their bounds.
The same Wall Street Journal: “The Dept of HHS has opened an investigation into physician-owned distributorships (PODs), middlemen entities that allow surgeons to profit from the medical devices they use on their patients…Since surgeons often dictate to their hospitals which devices to buy, surgeons involved in PODs can effectively steer business to themselves”.
RMD comment:
1) This sounds like double-dealing. I’m glad it’s being investigated.
2) The instrument makers cannot be blind to these goings-on. If fault is found, they should also be held accountable.
3) The most important point: As the financial pinch gets worse (and I believe it will), I am concerned this might put all physician for-profits ventures in the cross-hairs of the politicians. If 10% (or more) of the populace is unemployed, another 6 or 7% are grossly under-employed, millions are losing their homes to foreclosure; and pensions, Social Security, Medicare, and other benefits are at risk; even if something is totally legitimate, people will show little sympathy for a physician who makes a quarter-million or half-million or more a year.
Think about this if you have a for-profit venture.
Today’s Barron’s. Roundtable member Felix Zulauf is one of my favorites. In response to “If you ran the ECB (European Central Bank), how would you deal with Greece”? , he said “There is no painless solution (my emphasis). We have to let entities, even governments, default. But we have to make sure first that the banking system can handle its clients’ defaults. That is the problem…
By the middle of the decade at the latest, we will have a major crisis, bigger than 2008…the US dollar will be forced down tremendously. It will push bond yields up and stocks down…
Bonds can’t be recommended to long-term investors for the next 10 years. Gold will beat stocks in the next few years”.
RMD comment: I suggest you read this again, try to play it out in your mind, and ponder what to do. This is exactly what I believe (fear) will happen. For the last 3 years, my advice to you has been built around this scenario, and how you can best protect your wealth should things play out this way.
In the same issue of Barron’s, Roundtable member Archie MacAllaster said “The Obama administration is anti-business…He is anti-business because he never grew up with business”.
RMD comment: If a stint in the Armed Services, or working a year or two at Granite City Steel, or on a road construction gang, were a prerequisite for political office, I think we all would be much better off.
In the last newsletter, I noted there was nothing you can still buy for a penny. Actually, there is; the penny slots at the casino. It’s interesting to watch folks feed in their pennies and go wild when they hit a jackpot for $8.00.
I was in Chicago twice in the last two weeks. June 2-5 was Alumni Weekend, where I was elected President of the Alumni Assoc. for the Pritzker School of Medicine and Division of the Biological Sciences at the University of Chicago.
I was back on June 9th for the Student/Faculty recognition dinner. I had the honor of presenting the Doroghazi Clinical Teaching Award, which my family endowed 8 years ago, to Dr Scott Stern.
For the last decade, Dr. Lampis Anagostopoulos, a native of Greece, has finished the proceedings by reciting the Hippocratic Oath in Greek. This year, 13 graduating students then recited two stanzas of the Oath in their native language. I am not easily moved, but this was impressive. For my physician subscribers, you might consider something similar for your graduation ceremonies.
Last week I got on the down elevator at the 12th floor with a man who looked like a physician (there was a big cancer meeting in Chicago). A lady in exercise clothes gets on at 7. As she gets off at 6 (the gym floor), he starts to smile.
When the door closed, I said “She took the elevator down one floor to exercise”. He said “Yeah, I noticed that too”.
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