Programmed Obsolescence
Or “planned obsolescence” as is the term first popularized by Bernard London circa 1932 in his pamphlet titled, “Ending the Depression Through Planned Obsolescence”1. Basically the idea was for the government to impose rules of obsolescence on consumer goods which would cause guaranteed production and spending which would in turn create predictable, stable growth. The Wikipedia article that I 
referenced for this piece compares it to the recent, “Cash for Clunkers” program. Get rid of the old, replace with new; move ‘em on down the road.
Of course PO exists in every industry without a government mandate. There are several different categories; technical obsolescence, systemic obsolescence, style obsolescence. Each one is a premeditated, calculated economic strategy. Some say it is unethical, but who cares? It works. When the original product fails, there is another newer, faster, shinier product on the shelf for the consumer to snatch.
So what happens when an existing product that desperately needs to be replaced has no upgraded version? Well the only option is to keep on making small fixes to keep it running even though it is broken.
referenced for this piece compares it to the recent, “Cash for Clunkers” program. Get rid of the old, replace with new; move ‘em on down the road.Of course PO exists in every industry without a government mandate. There are several different categories; technical obsolescence, systemic obsolescence, style obsolescence. Each one is a premeditated, calculated economic strategy. Some say it is unethical, but who cares? It works. When the original product fails, there is another newer, faster, shinier product on the shelf for the consumer to snatch.
So what happens when an existing product that desperately needs to be replaced has no upgraded version? Well the only option is to keep on making small fixes to keep it running even though it is broken.
I read an article this week on CNN.com about malpractice insurance and how the costs are driving doctors out of practice. One case involved a 55 year old OB/Gyn that had a patient base of over 5,000 individuals that went out of business. She was spending over $125,000 per year for her coverage.
Another case was that of Dr. Douglas Evans, a pediatrician.
“"I had a young football player in my office [this week]. His symptoms indicate a problem with his neck," he said in an example. "But I have to get authorization from his insurance company first to get an X-ray or an MRI. It's an example of how insurance companies dictate to me what I have to do." Evans is frustrated that this process will delay treatment by several days. "My first concern is that he's young and has his career in front of him," he said. "My second concern is that there's a predatory lawyer out there," meaning that if his patient's condition worsens while he waits to get authorization, it could expose him to a malpractice suit.”2
“"I had a young football player in my office [this week]. His symptoms indicate a problem with his neck," he said in an example. "But I have to get authorization from his insurance company first to get an X-ray or an MRI. It's an example of how insurance companies dictate to me what I have to do." Evans is frustrated that this process will delay treatment by several days. "My first concern is that he's young and has his career in front of him," he said. "My second concern is that there's a predatory lawyer out there," meaning that if his patient's condition worsens while he waits to get authorization, it could expose him to a malpractice suit.”2
Broken, obsolete. So what are the long term solutions to getting these costs under control? One way the problem is being attacked, is by mitigating one of the major elements that is driving up premiums: malpractice suits.
A USA Today article delves into the details of several possible solutions that include in-facility risk management programs, and specialized health courts.
“For nearly a decade, the University of Michigan Health System has been using a program in which patients report errors to a hospital "risk-management" program before filing suit. The hospital investigates and, if warranted, issues an apology and an offer of compensation to the patient. If the patient turns that down, he or she can go to court. The vast majority settle.
The system moves quickly, sometimes catching errors before they're reported.In August 2001, there were 262 open claims against the medical center. In 2007, the numbe
r was 83. Some Michigan lawyers who represent patients praise the system — quite a testament to its ability to treat injured patients fairly.
Similar systems are proving their worth at as many as 300 hospitals and university medical centers across the country. A few malpractice insurers are using such programs for their insured doctors. In 2005, then-Sens. Barack Obama and Hillary Clinton proposed a law to encourage such systems and build a national database of disclosed errors to help physicians avoid them. This promising measure died in a committee.
Another intriguing idea is specialized health courts, where experienced judges using impartial experts would decide malpractice cases without juries. Awards would be more consistent and quicker. Yet no state has even tried a pilot program.”3
“For nearly a decade, the University of Michigan Health System has been using a program in which patients report errors to a hospital "risk-management" program before filing suit. The hospital investigates and, if warranted, issues an apology and an offer of compensation to the patient. If the patient turns that down, he or she can go to court. The vast majority settle.
The system moves quickly, sometimes catching errors before they're reported.In August 2001, there were 262 open claims against the medical center. In 2007, the numbe
r was 83. Some Michigan lawyers who represent patients praise the system — quite a testament to its ability to treat injured patients fairly.Similar systems are proving their worth at as many as 300 hospitals and university medical centers across the country. A few malpractice insurers are using such programs for their insured doctors. In 2005, then-Sens. Barack Obama and Hillary Clinton proposed a law to encourage such systems and build a national database of disclosed errors to help physicians avoid them. This promising measure died in a committee.
Another intriguing idea is specialized health courts, where experienced judges using impartial experts would decide malpractice cases without juries. Awards would be more consistent and quicker. Yet no state has even tried a pilot program.”3
Sure it’s good to work for Delta which is member of the oligopoly of locums firms. But the fact of the matter is that we are a short term fix for the problem of physicians that close their practices to work under our malpractice insurance. Only a small number of our physicians have come to us for this reason but the data suggests that many more will be walking that road in the near future. And believe me, we are happy to do it and will continue to do it until the malpractice issue is resolved. It is time however for a shiny new product for the industry to consume, because this clunker we are in now is on its last wheel.
1. http://upload.wikimedia.org/wikipedia/commons/2/27/London_%281932%29_Ending_the_depression_through_planned_obsolescence.pdf
2. http://money.cnn.com/2009/09/14/news/economy/health_care_doctors_quitting/index.htm
3. http://blogs.usatoday.com/oped/2009/06/our-view-on-doctors-vs-lawyers-tired-malpractice-debate-ignores-promising-solutions--risk-management-programs-and-heal.html
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