Wednesday, February 10, 2016

"Charlie Munger on the Medical System"

We've been fans for longer than some of our readers have been alive.
And no, I'm not as old as Charlie.
From Farnam Street:
Long a fount of wisdom, Charlie Munger provided us fascinating insight on everything from energy policy and mental models to how good gamblers think and making effective decisions.

At the Daily Journal Meeting (held March 25th 2015), Munger answered a question on Obamacare:
Of course the system of medical care, as evolved under the United States, has much wrong with it.
On the other hand, it has much that’s good about it. All the new drugs and devices, and new operations, medicine has taken more territory in my lifetime than it took in the whole previous history of mankind. It’s just amazing what’s been done.

A lot of it is obvious and simple, like inoculating the children against infantile paralysis, scraping the tartar off your teeth so you don’t wear plates when you’re 55 years old, and so on. People now take those benefits for granted, but I lived in a world where a lot of children died. Every city had a tuberculosis sanitarium, and half the people who got tuberculosis died. It’s amazing how well medicine has worked.

On the other hand, compared to the best it can possibly be, the American system is pretty peculiar. It’s very hard to fix. One kind of insanity is to say, “We’ll pay you so much a month for taking care of the people, and everything you save is yours.”

That is the system the government uses in dealing with the convalescent homes. That’s a great name, a convalescent home. You convalesce in heaven. You don’t convalesce them at home. [laughs] It’s attempting to have a euphemistic name.

That creates huge incentives to delay care and keep the money....MORE
Some of our previous posts on Mr. Munger: 
May 2009 
Here's the Story on Berkshire's Munger (BRK.A)
Sept. 2010
Munger Says `Thank God' U.S. Opted for Bailouts Over Handouts (But What About General Electric, Charlie?) BRK.B; GE
July 2015 
"Charlie Munger on “Loading Up,” Tracking Error, and Value Investing"
May 2009 
Berkshire Hathaway's Munger on Cap-and-Trade ("Monstrously Stupid Right Now...Almost Demented"); Warren and Charlie on Wind and Solar (BRK.A)
Aug. 2013 
The SEC and Charlie Munger's Stock Pickery (DJCO)
May 2010 
Climateer Line of the Day: Berkshire Hathaway's Charlie Munger on Age, Inflation and Solar Energy Edition (BRK.B; BRK.A)
Nov. 2015 
"Why and how do Munger and Buffett “discount the future cash flows” at the 30-year U.S. Treasury Rate?"
May 2009
An Interview with Berkshire Hathaway's Charlie Munger (BRK. A)
Aug. 2015 
Berkshire Hathaway's Charlie Munger On Mental Models

And dozens, if not hundreds, more. Use the search blog box if interested.
"Think about it a little more and you will agree with me because you're smart and I'm right."
-Charlie Munger, Vice-Chairman, Berkshire Hathaway
The best senior management 'all purpose turn-around' I've ever seen.