Brother, Can you Spare a Latte? by Pat Conrad MD


Most if not all of us in medical training at some point were taught by hard experience the value of calm analysis, and separating emotion from making major changes in treatment regimens.

The urge by too many to rush in and “do something” has generally caused great misery, more so in the past century-plus, accelerated by the rush and rumble of industrialization and the Information Age’s ability to amplify emotion across geography and social strata as quickly as someone can hit “Like” on Facebook.

Dan Price, co-founder and CEO of Gravity Payments in Seattle wanted to do something about income inequality. Last year his financial services company processed $6.5 billion for 12,000 small business customers. Spurred by rent/student loan worries of a friend and employee who’s take home was $40K, Price made the radical move of drastically cutting his own salary while raising all of his employee wages to a base of $70,000/year. Price is the product of a strong family and devout religious upbringing that emphasized the twin practical imperatives of personal success and concurrent altruism. He is described as a very competitive and thoughtful youth, traits that led him to multi-millionaire status by the time he hit 30.

So he arbitrarily jacked the salaries for all of his workers, and received immediate acclaim from the mob media and the Harvard business school. He also came in for resentment from many who felt personally devalued overnight. Peers in neighboring firms felt pressured to follow suit in Seattle’s current climate of equalizing incomes, most notably the recent adoption of a $15/hr. minimum wage. Price “did not actively oppose Seattle’s minimum-wage increase, but a reason he urges other business owners to follow his lead on pay is to avoid more government regulation.”

Some clients mistrusted the move and Gravity lost some old business even as it gained new clients – clients whose accounts will not start to provide steady profit until next year. In fact Gravity gained so much new business that it had to hire additional personnel. Some of Gravity’s employees felt immediate tangible improvements in their living conditions; others in Price’s inner circle had second thoughts over being valued the same as newbies with less experience, investment, and motivation – both colleague and employee skepticism was derided as “selfish” – and quit. One employee who quit shortly after receiving a raise said, “Now the people who were just clocking in and out were making the same as me,” he complained. “It shackles high performers to less motivated team members.” Price was hit by a lawsuit from his sibling/co-founder, and more recently had to rent out space in his home to help pay his bills.

Does this guy have a future in health care? You bet he does!

Price could become a hospital administrator. Every hospital schemes to rope in new physicians with income guarantees that compete with already existing local practices.

He could become a vice president for Aetna or Humana. Third party insurance rates paradoxically suggest income basements by setting income ceilings, encouraging doctors to meet the minimum payment points per patient as they scurry to the next exam room. That’s perfect for a guy with experience in paying arbitrary salaries irrespective of value return (and he could easily back that logic up with a new round of quality indicators to deal with the inevitably poor morale and subsequent infighting as a way of maintaining overall creative control).

Price has made a national splash in taking an altruistic goal and pursuing it through a precipitous economic upheaval that led to a simultaneous increase in demand, increase in administrative cost, and disastrous revenue shortfalls. This experience alone makes him supremely qualified to become an ObamaCare czar. His willingness to use moral assumptions about others to rationalize policy is a bully tactic that would recommend him for a White house cabinet post, and later a gig on MSNBC. And his ability to take careful aim and blow a foot off so government won’t have to is a trait any moderate Republican would envy.

The vital point is that Dan Price, like our current health care overlords, did something.

Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  2 comments for “Brother, Can you Spare a Latte? by Pat Conrad MD

  1. Pat
    August 24, 2015 at 2:43 pm

    Lance, absolutely I agree with your lead-in, hell yes a private biz owner can (should) do what he wants. I’m still glad he’s not in health care…yet. ~Pat

  2. Sir Lance-a-Lot
    August 22, 2015 at 3:19 pm

    Sorry, Pat, but I have to disagree with a basic part of your critique:

    Mr. Price (who runs a credit card processing company – isn’t that like OBs named Dr. Love and surgeons named Dr. Cutter?) is a private business owner who has built and runs his own privately held corporation. Fundamentally, the business is his to operate as he sees fit, free of unnecessary interference from other entities, which is exactly what all of us here on these pages advocate for in our own profession.

    Because the company is his own, he was free to do a fairly radical experiment, and he did it, and found that some of the results were surprising. This is a good thing for all businessmen, as it adds a few data points to the “What if…” questions that come up, and helps chart territory that was fairly unknown.

    An analogous situation is the one in which we in the “cognitive” medical specialties suggest that we should be paid more for our services, compared with those in the “procedural” specialties – it’s kind of like saying that all of the doctors should be paid the same amount. We can see from this experiment that if CMS or who-the-f&@k-ever decided to pay all primary docs more and all procedural docs less, there might be unpredictable consequences.

    Finally, note that Mr. Price’s company, though it’s hit a rough patch, has not filed for bankruptcy – it looks as though, with a few adjustments, such as rewards for longevity or achievement, this overall policy may survive.

    Oh, and the guy who quit and said, “Now the people who were just clocking in and out were making the same as me, it shackles high performers to less motivated team members” is a dick.
    If he thinks his coworkers aren’t doing their jobs, he is free to slither into his boss’s office and rat them out, just like in generations past (and his coworkers are free to put Ex-Lax in his coffee or slash his tires). Heck, it may even get him a promotion.
    Medicine analogue: How about if I complained because the local pediatrician, whose patients I see all the time when he’s “closed,” and who routinely diagnoses 2 year olds with “sinus infections” and puts them on amoxicillin when they have viral head colds, makes as much money as I do? I mean, his work quality is clearly lower than mine, right? So I should be paid more, right? Riiiiiight…

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