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Taking pulse

By Keith D. Cummings
web posted January 5, 2004

John Kirk is a popular fellow in his community. As a mechanic who specializes in fixing damaged fuel injection systems, John gets his share of business from people driving older cars, many off warranty. Of course, his repairs aren't easy, and they don't come cheap. There are several reasons for this.

First, the parts John needs to get are rare, hard to find and expensive. The average repair can cost upwards of $2,500 just in parts. Also, John didn't just start fixing cars when he was 18. He went to special school, where he was trained for four years in the basics of car repair. Once he completed his basic training, John went to specialty school. For four more years he studied in the classroom, then he spent four years in apprenticeships at two of the top fuel injector repair shops in the United States.

Having completed his years of study, John struck out on his own. He set up shop in the small city that he calls home, and set out to help people with their engine problems. For years he was successful, and many of his neighbors envied him. They didn't understand, or they chose to forget, that John incurred nearly $250,000 in debt while he was learning his craft. So, while John earns a solid living now, they think he gets paid entirely too much.

Starting about thirty years ago, lawsuits against auto repair shops began to increase until last year when juries in America awarded an average of $70,000 to each plaintiff in an auto repair negligence case. While only 40 per cent of cases receive a jury award, men like John Kirk carry liability insurance that often pays off plaintiffs without a trial. John is now paying close to $5,000 a month in insurance premiums.

Last month, the federal government, responding to complaints by John's neighbors and millions of other owners of older cars, passed legislation whereby the government will set prices for John's services. The government will reimburse him directly, and he will be forbidden to take one penny more than the amount the government tells him he can. As a result, John is closing his shop. Under the new price regulations, John will barely be able to afford his overhead, and he will have no choice but to find a new line of work, or retire at age 45 on the modest nest egg he has already saved.

Of course, this is ridiculous. We all know that the federal government hasn't yet tried to regulate the auto repair industry. In fact, most of us would be up in arms if the government tried to set price controls in our line of work. Grocery stores, department stores, movie theaters and others all set their prices based on expense and what the market will bear. Mechanics are the same. However, there is one industry, one populated by men and women who undergo as much as my fictitious friend John did to get their expertise, where no one seems to care constant government interference: Medicine.

Today, and even more so in the future, we read about doctors around the country who are leaving the business because Medicare, that most socialist and unconstitutional of programs, is dictating to them what they can charge for their services. More importantly, it is illegal for Medicare patients to pay their doctors above the fees dictated by government fiat under the ballooning entitlement. Brian Lewis of Chevy Chase, Maryland is just one of thousands of doctors who are seeing the handwriting on the wall.

Working in states across the country, these men and women, many of whom are still servicing the debt they incurred to become doctors in the first place, are seeing their benefits decrease over time. As Lewis told The Washington Post, "…most jobs reward time and experience with greater financial rewards, but in the case of his practice…he would have to fight like hell just to keep even."

Years ago, Mike Royko, syndicated columnist from Chicago, wrote an article entitled "Poll on Physicians' Pay is Sick." In it, Royko pointed out that remarkably few Americans understand the time and effort our doctors put into their training. A nation that lauds its musicians and sports figures and doesn't begrudge them the millions of dollars they make a year; complains when a doctor earns six figures. There isn't a movie star or athlete that has made the investment in their career that a doctor has. The thirty-six hour days during their internship is more than most of us would bear. However, can you imagine the outrage if one top cardiologist appeared on MTV's "Cribs" to show off his half million dollar home?

As the Bush Administration continues its liberal bent, we can't expect anything but greater federal involvement in our medical system. Now, it's only Medicare and Medicaid patients who can't reimburse doctors for the difference between what they need to make to make a decent living, and what insurance dictates they should make. It is only a matter of time before the government sets prices for all procedures. The claim that it's "in the public interest" will be the defense. All I ask is, who's interest is served when the only doctors in America are substandard and few and far between?

Keith D. Cummings is the author of Opening Bell, a political / financial thriller. His website is http://www.keith-cummings.com.

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