 Perhaps no area of the U.S. economy is less market driven than health care, and that's something that should certainly be worrying for all of us. And our guest this weekend is uniquely qualified to talk about this, Dr. Michael Akkad, who's been on the show before, is a cardiologist and internal medicine practitioner in San Francisco. And as libertarians, we tend to think about alternative treatments, but we don't think as much about alternative delivery systems for health care, and also about alternative methodologies for doctors. So two weeks ago at our Austrian Economics Research Conference, Dr. Akkad produced really a fascinating paper applying Austrian insights to medicine and how this idea of viewing the body as a machine has played a huge role in the rise of what he calls medical paternalism and one size fits all treatment. So while we tend to understand consumer sovereignty in other marketplaces, we don't understand patient sovereignty and medicine. If you're interested in how Austrian economics and in particular, praxeology might apply to the practice of medicine, stay tuned for a great lecture by Dr. Michael Akkad. Thank you very much. I'm delighted to be here. The Mises Institute has really been transforming for me professionally, and I'm very glad to be here. You know, this is a modest tentative proposal, maybe for the foundations of an Austrian School of Medicine, one of these days, who knows. The title of my talk is From Reacting Machine to Acting Person, A Praxeological Interpretation of the Patient, His Health and His Medical Care. And you know, the elephant in the room in healthcare is the following. If you ask any doctor, you know, what is health? If you ask any nurse, what is health? If you ask a medical researcher, what is health? If you ask a health policy wonk, what is health? Even if you ask a health economist what is health, you will not get a straight answer. And so I thought maybe it's conceivable that that may have something to do with the morass, the terrible situation we're in in terms of healthcare. And I'm hopeful that Austrian insights can be helpful. So let's get started. This is the outline of my talk. I will first identify two dominant modes of thinking about health in modern Western societies. And I will show that these conceptual modes are counterproductive to fostering health both economically and medically. And I will then propose a praxeological interpretation of health and sketch the possible benefits and ramifications of that interpretation. Okay. So the dominant mode of thinking about health in Western societies owes its origins to René Descartes, who at the beginning of the Scientific Revolution proposed a machine concept of the organism. The cart's proposal was a radical departure from pre-existing notions, which were rooted in the idea that the organisms have essences and natures. Instead, Descartes proposed that every material body is an assemblage of tiny particles moving mechanically according to physical laws. In the case of plants and animals, God directs the laws and the motions of these organisms. For humans, the mechanical bodies are under the control of a separate human soul acting like a ghost in the machine. In the centuries that followed Descartes' proposal, scientific discoveries began to lend credence to a machine concept of the body, however ill-defined that concept might have been. And vice versa, the machine model facilitated further scientific discoveries. Laws of classical physics and chemistry were identified. Systems were revealed to be made of basic components and these material components were increasingly well characterized and seemed to act on each other according to physical laws to produce predictable biological behaviors. And certain diseases were recognized as being due to defects in the components of the machine-like organism. By the end of the 19th century, when health care systems were beginning to emerge, the machine model was widely adopted by scientists and was bearing much fruit in medicine. Now, there's nothing wrong with models so long as they are understood to be models. But under the dual influence of ideological empiricism, which was widespread among prominent scientists, and social progressivism, which was flourishing in many Western nations at the time, and still is today, medical licensing laws incorporated and embedded the machine model into medical education, turning it into a quasi-reality. This is particularly well documented in the case of the United States, which saw an abrupt transition from a unique free market situation to a regulated health care environment in the 1910s. The transition was instigated at the behest of the Carnegie Foundation, whose leaders were enthusiastic about the progressive idea of scientific management of social affairs, and they entrusted Abraham Flexner to issue a report that was highly critical of the state of medical education for failing to systematically embrace scientific empiricism. The Flexner report explicitly promoted the machine concept of the human body, and in the aftermath of its publication, educational and licensing reforms were enacted to prevent the operation of any medical school that did not embrace the proposals advanced by the Flexner report. The idea was that if the body is like a machine, its care should only be entrusted to those who receive proper scientific training. The educational and licensing regulations of that period have dictated the modern medical school curriculum, a curriculum that has remained essentially unchanged since then. Entrance requirements mostly hinged on mastery of the physical sciences, and the curriculum begins with building block disciplines, and then moves to more complex systems. With that constructivist approach, an understanding of the body is expected to emerge from the conceptual integration of parts into systems, as one would mentally construct the workings of a machine. Again, there is nothing inherently wrong with such a structure unless our scope of understanding remains confined to it. To the extent that licensing laws and educational regulations privilege empirical knowledge over all other forms of knowledge, and to the extent that the hard sciences are considered foundational to the medical curriculum, the concept of health becomes difficult to articulate precisely within such a structure. The notion of health necessarily presupposes certain ontological considerations regarding the human person, yet the empirical sciences precisely avoid such considerations. As a result, the concept of health is generally left undefined in medical schools, while the machine model, seen as highly effective for the production of therapeutic advances, has become a de facto representation of the human body in medical circles. From that model of the human body, a certain understanding about health and disease emerges. If the body is viewed as a machine subject to disturbances, internal or external, then diseases are viewed primarily as objective dysfunctions, and health is simply the absence of disease. In fact, this is a common definition of health provided by standard medical dictionaries. But neither the machine model nor the definition of health and disease are firmly or explicitly considered valid or true. In fact, if examined, they are usually recognized as flawed or limited. Nevertheless, these are implicitly adopted operational definitions, given the empirical constraints imposed by the regulatory conditions for licensing and education. As we might expect, impelling the adoption of the machine model through educational and licensing regulations has had negative consequences. If health and disease are viewed as objective conditions to be ascertained by the physician, then the physician is put squarely in control and patients are passive since their bodies are mere machines. This of course gives rise to medical paternalism, which was particularly acute in the first half of the 20th century. It also gives rise to an invasion of medicalization, where under authority from the medical community, increasing aspects of life are placed under the purview of the healthcare system. And medical authorities may also find opportunities to identify diseases that would not be apparent or would not exist under a different framework. The view that health and disease are objective concepts also invites third parties to partake in healthcare delivery, namely regulators and insurers. Viewing healthcare is purely a technological endeavor. Regulators wish to subject it to quality and safety oversight. Reviewing diseases as defects or dysfunctions in a machine, insurers, whether public or private, are tempted to think of medical illnesses as insurable events. These errors account in large part for the endless bureaucratization and runaway cost inflation of healthcare. And the machine model is self-fulfilling. Again, since only empirical methods are considered permissible to advance claims about health and disease, these methods limit our framework of understanding to only what is measurable. When health is not being quote-on-quote delivered by the system, according to accounting measures or measures of efficiency, more interventions are called for and those interventions further mechanize care and reinforce the machine model of the human body. Now, clearly, there has been some backlash against the mechanical and reductionist concept of health in the last 50 to 60 years. The backlash began in part in response to the abuses of the eugenics movement, but also to other egregious abuses of a medical community empowered by licensing privileges and by technological means to cause great harm. And therefore, alternative definitions have been proposed. Chief among these alternative definitions is the definition of health offered by the World Health Organization in 1949, namely that health is a state of complete physical, mental and social well-being and not merely the absence of disease or infirmity. Now while the WHO definition clearly acknowledges the subjective dimension of health, it has serious limitations. To begin with, by stipulating complete well-being, the WHO definition makes it hard to conceive of anyone as being healthy. It does not circumscribe the scope of medical care, but in fact makes it limitless. The definition also introduces the unclear notion of social well-being with which medical care is easily turned into a public health or even a political activity. And by defining health as well-being, the WHO definition and others like it appeal to an empiricist concept, namely the idea of the self as a bundle of experience as philosopher David Hume would have put it. In this view, only the feelings and experiences of the person ultimately matter. As a summary, we can remark that both concepts of health, the one that derives from the machine model and the one offered by the WHO, primarily consider the human being as reacting to changing conditions, rather than as a person acting on the world to achieve chosen ends. I would therefore like to entertain an interpretation of health rooted in the view that human beings are persons acting purposely, persons who select means to achieve chosen ends, which is the framework of praxeology. Under a praxeological framework, I would distinguish external means such as land, labor and capital, which are generally the concern of economic theory, from internal means such as the physical and mental conditions of the person that allow him or her to pursue chosen ends. Health then may be defined as the state that is present when a person's physical and mental conditions allow the pursuit of his or her chosen ends. Disease then is the absence of health. Now of course, the first thing to do is to ensure that the definition of health that I propose corresponds to our common sense understanding of the term and is not simply an intellectual abstraction. This is work that needs to be done carefully, but today I simply wish to remark that conditions we normally conceive as diseases, for example, heart attacks, major trauma, pneumonia, cancer, but even simpler things like the common cold generally do interfere with a person's pursuit of chosen ends and therefore seem to cohere with our definition of health and disease. An important consequence of a praxeological interpretation of health is that it locates the determination of medical necessity within the patient rather than in the physician or the public health official. Since only the patient knows what his or her chosen ends are, the definition can therefore safeguard against unwanted third party intrusions in health care. Moreover, our interpretation can actually solve what I call the paradox of the healthy blind man. Under the machine concept of health and disease, a blind person could never claim to be healthy, since a part of the body is obviously an objectively defective. Yet undoubtedly, many blind persons and many other persons with serious disabilities actually consider themselves to be perfectly well and healthy if asked about health in the context of a routine conversation. I believe that they do so because despite their disability or infirmity, they are able to pursue their own chosen ends without own due difficulty. In fact, a praxeological conception of health would promote self-regulation in the use of medical services. Rational beings naturally adjust their chosen ends according to the means that are realistically available to them, and that includes the internal means, namely ones physical and mental conditions. Therefore, a person's sense of health may be maintained despite the presence of some objective dysfunction. And this may be particularly pertinent in the case of the elderly who may naturally curtail their chosen ends as they age, and claims for medical services would not necessarily rise in proportion to physical decline. Now, one objection to my definition is that it may encourage unreasonable or irrational subjective determinations of health and disease. Imagine that I choose, as one of my ends, to become a linebacker for the Dallas Cowboys. Should my inability to gain sufficient muscle mass be considered a disease? According to my definition, it could, but I will address this difficulty in the next slide. Now, we should note that the nature of the patient-physician relationship changes in a praxeological framework. In this framework, we are no longer dealing with a subject-expert relationship, but with what I would call an owner-steward relationship. The patient is the rightful owner of his body, but in the course of medical care, he or she delegates control of the body to the physician. The physician is entrusted to work on the body with the understanding that the goal is to help achieve a condition where the patient can pursue his or her chosen ends to whatever degree possible. The transfer of control is particularly evident and incomplete in the case of surgery, but it also occurs in lesser degrees in routine medical care when a patient agrees to ingest a medication or to submit to the advice of the physician, since that medication or that advice invariably aim at changing the patient's internal means of action, namely his or her physical and mental conditions. Patients may choose to seat control of their body for a variety of reasons. They may be unable to maintain or restore their health on their own due to the illness, or they may be unwilling to shoulder the uncertainty related to health decisions. There may be other reasons as well. I would propose that medical care per se occurs only after control over the body has been transferred by the patient to the physician, and the patient submits either implicitly or explicitly to the actions of the doctor. In fact, this distinction would recover the original etymology of the word patient, which is opposed to agent. And the main decision confronting the would be patient is in the selection of the physician's steward. In that regard, licensing laws could be viewed as impinging on property rights, the rights to legitimately transfer care of one's property, one's body, to another person. Of course, the physician's steward is not obligated to treat the person, but is free to accept or refuse the consignment of the body. And that prerogative of the physician will, to some degree, safeguard against the problem of the unhealthy NFL hopeful or the problem of unreasonable or irrational health concerns on the part of individuals. In fact, this is an advantage over the empiricist model of health, since those models cannot easily deal with irrationality or unreasonable demands. And in this last slide, I would like to discuss additional concept borrows from economic theory. One concept is that a physician trained in the Austrian School of Medicine would conceive of her role as a nitrogen entrepreneur. She would see herself as being invested in the patient's internal means of action, bearing in mind the patient's chosen ends. The Austrian physician would understand that she is dealing with uncertainty and not risk as clarified by Frank Knight. Risk has to do with repeatable events and outcomes that can be quantified. In medicine, we are dealing with unrepeatable human affairs and unquantifiable uncertainty. To make medical decisions, she would use all forms of knowledge available to her, including tacit as well as scientific and technological knowledge. And she would view her medical decision the way entrepreneurs view entrepreneurial decisions as exercising judgment. This is in distinction to the way medical decisions are currently considered under the machine model, namely as calculations. As Knight proposed, entrepreneurial judgment is not articulable and therefore not contractable to third parties. The Austrian physician will not contract with a third party to provide care as if the care were an objective, measurable entity. Finally, additional considerations that the Austrian theory of medicine must address include the cases of those unable to express chosen ends, the need to elaborate a contract theory for stewardship and informed consent, and probably the need to address Mises' methodological dualism, since the connection between the physical sciences and medical care is close, and a sharp methodological separation may be counterproductive in the long term. Thank you very much.