Some Chicago Boyz know each other from student days at the University of Chicago. Others are Chicago boys in spirit. The blog name is also intended as a good-humored gesture of admiration for distinguished Chicago School economists and fellow travelers.
A lot of people are asking why the both the government and private response to the Deepwater Horizon oil spill is so inept.
No major failure has a single cause but I think one major cause has been completely overlooked:
Everyone involved is simply out of practice.
It is inconceivable to me that if the much-reviled Gov. Sarah Palin had been POTUS when this oil spill occurred that she would not have done a much better job than the pathetic, flailing, clueless response we have seen from our Chief Executive, Mr. Obama. For one thing, she would have grasped the difference between stopping an ongoing disaster and suing for damages after all the damage has already been done. Mr. Obama is like a person standing on the sidewalk as a fire is spreading through a building, and people are screaming for him to do whatever it takes to put it out, and he stands there as the flames spread and the smoke plumes into the sky, and he says, “I will sue the person who caused the fire.” It is flabbergasting that the man seems not to even grasp the existence of the executive function. All he knows, all he is even aware exists, is assigning blame, and clutching at money in response.
Michael Barone wrote somewhere that the American people do not want the President to be a nice man. They want him to aggressively use the powers of his office to secure their well being.
Mr. Obama, faced with his first serious test, has shown himself to be a miserable failure on that score.
I knew he’d be bad. I had no idea how bad.
We can do better.
Describing the dysfunctional management culture of Ford Motor Company during the later years of Henry Ford, Peter Drucker observed that a Ford foundry manager was not allowed to know the cost per ton of the coal being used in his furnaces. This was a function of the secretive and very controlling personality that Mr Ford had developed by this time, aided and abetted by his thuggish sidekick, Harry Bennett.
The discussion of the pharmacy reorganization got me thinking of the trauma center that we started in 1979. That was well before I learned about lean practices or the Toyota method but I think we used a number of their principles anyway.
When we started our trauma center, we did something a bit like your pharmacy project. We were a small hospital (120 beds) in a new suburban area with the ocean on one side and national parks and mountains on the other. Orange County narrows down to a triangle which ends at San Clemente where the Marine base begins. We knew the county was going to regionalize trauma. A study had come out suggesting that too many people died because “the golden hour” was lost in trying to get doctors and operating rooms organized, especially at night.
Several large hospitals planned to enter a competition to qualify as centers; one of course, was the UCI medical center. None of them was within 25 miles of our hospital. We didn’t like the idea of seeing the injured patients, some of whom would be neighbors, being taken that far and we looked to see if we could set up a trauma center for our community that would pass muster with the EMS survey team. First we had to see if the hospital and medical staff would support it. My partner and I couldn’t do it alone.
I did a study of the finances of trauma. The stereotype is a drunken insolvent who is stabbed or shot. Our community is located along I-5 where it runs from Los Angeles to San Diego. We are between mountains and the sea. I took the records of all emergency admissions, who went to surgery or who were discharged with a “surgical” diagnosis and who went to ICU. Some of those were general surgery but by using a screen we got down to the trauma cases. I found that 85% of them had some sort of insurance. This was largely because most were auto accidents. Even if people don’t carry health insurance, somebody may have medical benefits with car insurance.
We presented this to the department of surgery and they turned us down flat. The vote was something like 33 to 2. We went to the Board of Trustees. At the time, the hospital was owned by a partnership, one of the dreaded for-profit hospitals. The Board was easily convinced that this was something we needed to do if this hospital was going to grow. Southern California is cursed with many small hospitals and few big ones outside of Los Angeles. I knew a vascular surgery group, of three men, in the San Fernando Valley that went to 12 hospitals. One of the reasons I moved to Mission Viejo was to get out of Los Angeles.
Anyway, we had the hospital on board but not the doctors. The hospital decided to make the trauma center a contract service like the ER. My partner and I would run it. The hospital hired a city planner to draw up a proposal for the county. They gave me a copy when he was finished and it was the size of a Chicago telephone book. I read through it and it sounded like a proposal for a shopping center. I rewrote it. A lot of it was useful, like traffic analysis, but the vast majority didn’t answer the right questions.
Then we had to figure how we could do this and not go broke. There were two of us. We would call other specialists, like orthopedists and neurosurgeons, as needed. That’s how we got around the surgery department. There were grumbles but they faded as the orthopods began to realize that trauma cases paid well, mostly. Then we figured out who is in the hospital at night. The other trauma center candidates all promised to have a surgeon and anesthesiologist in-house 24 hours per day. We could not afford that. We promised that the surgeon and anesthesiologist would arrive within 15 minutes of being called, usually before the victim. The ER doc would be there. That was just as Emergency Medicine was becoming a specialty and our ER docs were GPs.
David Bernstein observes that if Elena Kagan is confirmed then every single Supreme Court Justice will have attended Harvard or Yale law schools. He also observes that:
The president went to Harvard, and barely defeated a primary opponent who went to Yale. His predecessor went to Yale and Harvard, and defeated opponents who went to Yale and Harvard, and Harvard, respectively. The previous two presidents also went to Yale, with Bush I defeating another Harvard grad for the presidency.
..and asks, “Isn’t this a bit much?”
His post reminded me of something that Peter Drucker wrote, way back in 1968: