The physician as entrepreneur

Warning: not a post about "disruptive innovators"

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Frank Knight, risk and uncertainty

In this article, I wish to introduce the reader to the theory of entrepreneurship advanced by Frank Knight (1885-1972), and show that the common, everyday work of the physician could be considered a form of entrepreneurial activity in the Knightian sense.

Knight was an influential American economist.  He is best known for his book Risk, Uncertainty, and Profit in which he proposed to distinguish risk and uncertainty as follows:

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Good medicine starts with friendship

Advice from the ancients

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Whenever I have the opportunity to suggest that good medicine is based on friendship, I usually get a nod of approval mixed with a quizzical look.  What’s that supposed to mean?!

At a recent meeting of an editorial board on which I serve,  the reaction to my suggestion was more forceful and perhaps more honest.  The topic of the day concerned patient education, and how hard it can be to move patients to do things like exercise more or eat better.  I timidly proposed that, as physicians, we might want to start by being our patients’ friends.  The physician sitting next to me immediately objected: “I wouldn’t go that far!”

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How doctors became subcontractors

In our healthcare system, the "middleman" is not who you think

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During my recent podcast interview with Jeff Deist, president of the Ludwig von Mises Institute, I remarked that third-party payers are not, in fact, intermediaries between doctors and patients.  In reality, it is the physician who has become a “middleman” in the healthcare transaction or, as I argued, a subcontractor to the insurer.

Important as it is, this reality is not well recognized—not even by physicians—because when doctors took on this “role” in the late 1980s, the process by which healthcare business was conducted did not seem to change in any visible way.

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Neither expert nor businessman: the physician as friend.

Arguments against the outcomes movement

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In a recent Harvard Business Review article, authors Erin Sullivan and Andy Ellner take a stand against the “outcomes theory of value,” advanced by such economists as Michael Porter and Robert Kaplan who believe that in order to “properly manage value, both outcomes and cost must be measured at the patient level.”

In contrast, Sullivan and Ellner point out that medical care is first of all a matter of relationships:

With over 50% of primary care providers believing that efforts to measure quality-related outcomes actually make quality worse, it seems there may be something missing from the equation. Relationships may be the key…Kurt Stange, an expert in family medicine and health systems, calls relationships “the antidote to an increasingly fragmented and depersonalized health care system.”

In their article, Sullivan and Ellner describe three success stories of practice models where an emphasis on relationships led to better care.

But in describing these successes, do the authors undermine their own argument?  For in order to identify the quality of the care provided, they point to improvements in patient satisfaction surveys in one case, decreased rates of readmission in another, and fewer ER visits and hospitalizations in the third.  In other words…outcomes!

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Feel-good medicine: yesterday and today

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I’m on summer break but I thought you might enjoy this piece, published a year ago in the August 2014 issue of the Nob Hill Gazette.  The version below is slightly edited compared to the original.

In their recent book titled, Dr. Feelgood: The Shocking Story of the Doctor Who May Have Changed History by Treating and Drugging JFK, Marilyn, Elvis, and Other Prominent Figures, Richard Lertzman and William Birnes chronicle the startling career of Max Jacobson, a physician who specialized for decades in treating celebrities with his personally concocted injections of vitamins, human gland extracts, and high doses of amphetamines.

Operating from a filthy office in Manhattan, Jacobson showed no regard for basic medical hygiene and never obtained a basic medical history from his patients. Yet, over the years, he dispensed untold quantities of his “cocktails” to political and show business superstars suffering from fatigue, pain, or lack of stamina. For some of his patients, such as Cecil B. DeMille, the German-born doctor was a paragon of modern medicine. But others saw their careers and personal lives ruined as they became addicted to the treatments, and a few might have actually died as a result of it. The authors of the book relate instances where, under the influence of Jacobson’s amphetamines, President Kennedy’s behavior became wildly erratic. They even speculate that a motive for his assassination might have ensued.

Max Jacobson’s story might seem like a sordidly entertaining tale from a bygone era. Nevertheless, given our current love affair with medications (one in five adult Americans takes a psychiatric drug, and 70 percent of the U.S. population takes some form of chronic prescription medication), it behooves us to reflect on the professional and ethical failings of Jacobson’s practice to help keep our way of “better living through pharmaceuticals” within healthy boundaries.

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Is medicine a scientific enterprise?

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I was recently involved in a Twitter tiff triggered by the following Mayo clinic announcement:

Readers were promptly outraged:

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