A wake-up call for physicians

June 15, 2017

Everyone knows the name of Warren Buffett, the famous octogenarian-billionaire businessman and investor. His folksy persona and investment insights/elevated returns have earned him the appellation of “The Oracle of Omaha.” His estimated net worth of more than $74 billion makes him one of the wealthiest people on the planet.

Everyone knows the name of Warren Buffett, the famous octogenarian-billionaire businessman and investor. His folksy persona and investment insights/elevated returns have earned him the appellation of “The Oracle of Omaha.” His estimated net worth of more than $74 billion makes him one of the wealthiest people on the planet.

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His friend and business associate, Charles Munger, is the nonagenarian-wisecracking sidekick of The Oracle. Together, they host the annual business meeting of their large company, Berkshire Hathaway. This event has been dubbed “the Woodstock of Capitalism.”

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More than 30,000 people flock from around the world to listen to The Oracle and his colleague-and perhaps be one of the 16 or so persons permitted the privilege of asking a question of these two wise men. The wide-ranging, question-and-answer session is beamed around the world real-time via Yahoo! and is archived on podcast. The answers these men give become the stuff of newspaper headlines.

Taking on healthcare

 

Taking on healthcare

In response to a question about healthcare in the United States, Munger spoke to the burden that rising costs place on American businesses:

“If you go back to 1960, corporate taxes were about 4% of GDP (gross domestic product) and now they are about 2%. In 1960, healthcare was 5% of GDP and now it’s about 17% of GDP. So when American business talks about taxes strangling our competitiveness they are talking about something that as a percentage of GDP has gone down from 4 to 2 while medical costs which are borne to a great extent by business, have gone from 5 to 17%. So medical costs are the tapeworm of American economic competitiveness.”

Buffett goes on to state that other countries with national health systems have restrained their health expenditure growth during the same period (from 5% up to 10 or 11%).

“They have gained a five- or six-point advantage. If you talk about world competitiveness of American industry, it’s the biggest, single variable where we keep getting more and more out of whack with the rest of the world.”

Munger is a board member of a Los Angeles hospital and piped in with his perspective:

“What I don’t like is that there is too much medicine. There’s too much chemotherapy on people that are all but dead. There are so many vested interests that it is really hard to change. The system is crazy and the costs are going wild. If present trends continue it will get more and more [expensive].”

“It is deeply immoral,” Munger continued. “If you have a bunch of hospital people and doctors feasting like a bunch on jackals on the carcass of some dying person, it’s not a pretty sight.”

What I didn’t hear from The Oracle were any proposed solutions to lower healthcare costs while maintaining or enhancing quality. But I was impressed that a group of business leaders and investors, young and old, who tend to believe in free market approaches, clearly are so frustrated by our costly system.

A clear message

 

A clear message

The hyperbolic language of the 93-year-old Munger may be unfortunate and perhaps offensive to many in our profession, but to me the larger discussion conveys a clear message.

We do spend too much on care for people near the end of their lives that would be better allocated to less-costly palliative care, and we are not successfully managing the costs of the care we provide.

Either we physicians will wake up soon and start taking responsibility for addressing the problem, or outside forces will soon weigh in and we will be bystanders who may not be happy with the solutions imposed upon us.