Dave Janda: Bad Medicine

In our ongoing discussion of how our Health Care system (or more aptly-named "Sick Care" system) has been hijacked by those who profit most from it, we interview Dr. Dave Janda this week, who recently and very publicly announced he was walking away from his clinical practice in protest of how poorly the quality-to-cost ratio has dropped in his profession.

Dr. Janda's perspective is informed not just from his years as a practicing surgeon and researcher, but also through his involvement with health initiatives for the Reagan and Bush I administrations, as well as the National Institute of Health. His overall conclusion is that the health system now exists to serves its corporate and administrative owners, to the detriment of patients and practitioners: 

I decided I needed to retire from medicine the clinical practice of medicine because I truly felt that I could no longer take care of people the way I was trained to take care of people in a high quality manner. Now I have been involved 27 years in the clinical practice of medicine. I have battled insurance companies every day of my professional career since I got done with my residency program 27 years ago. The formula that insurance companies use and government uses to cut healthcare costs is the most inhumane and unethical means of cutting costs; and that's the rationing and denying of care. It's what I have fought against my entire career. My approach is, if you are really sincere about cutting healthcare costs, quit trying to deny the availability and access to care -- which is what insurance companies try to do. If you're really sincere about cutting healthcare costs prevent healthcare needs. It's the single greatest bang for the buck.

Now you're not going to learn that in medical school. I didn’t. And here is the bottom line – prevention is not stressed in medical school and internship and residency and post residency activities because there is no money in it. Where all the money comes is waiting for the injury to happen, waiting for cancer to happen, waiting for the cardiovascular event to happen and then dealing with it. Let’s face it – in the west and in particular the United States and Canada, we're good at dealing with problems once they occur. But when it comes to prevention, I can tell you the blowback I have gotten over the past 30 years in working in prevention is enormous.

You would also think that the insurance companies would love prevention. I mean when I first started on this 30 years ago, I was pretty naïve. I thought gosh, we are starting this non-profit research institute, I'm sure the insurance companies will help fund it. I can tell you, in 30 years of being in that organization the Institute for Preventative Sports Medicine, we never got one penny of funding from the insurance industry. And about 15 years ago I got a call from an insurance executive in New York who said, “I’m flying out. I want to meet with you.” Finally. They finally figured it out. They finally saw that hey look at these guys. They spend a thousand bucks one and it saves $2 billion. Finally, they're going to embrace us. There I am, sitting at the desk. This big insurance  executive walks in, looks at me and says, “Janda, let me tell you why we hate you.” Direct quote. I say "Hate me?,You should love me. I should be your poster boy for finding a way to help people and save costs". He goes, “Son, you don’t understand how the insurance industry works. Let’s say the cost of insuring you is $1000. The most -- according to the bean counters and the Feds -- that we can tack onto that is 7% so your premium is $1070, right?” I agree. He says, “Let’s say we do all those things you talk about to save costs. We figured it out with our actuaries: the actual cost of insurance is no longer $1000 bucks, it drops to $100 bucks.” He goes, “Now, son even though all doctors are morons,” -- a direct quote (when it comes to financial matters, he might be right on that) -- “7% of 100 is what? Seven” . He goes, “Well, wouldn’t you rather have $70 instead $7?” He goes, “Let me tell you how the health insurance industry works: The higher costs go, the bigger cut of the pie we get. And that’s why we will do everything in our power to shut you down and shut down your prevention work.

Click the play button below to listen to Chris' interview with Dave Janda (64m:18s)

This is a companion discussion topic for the original entry at https://peakprosperity.com/dave-janda-bad-medicine/

The download link gives us a version with only about 30 minutes of content.
The Youtube version is complete, so listentoyoutube.com is my friend again.

Feel free to delete this comment when the download problem is fixed.

That was the most difficult podcast I've heard since I joined the site, I had to sit down more than once.  This is getting beyond my ability to process. 

So while I found the guy's message interesting, I found I had to turn his audio down because his "talk radio voice" completely turned me off and was really starting to get on my nerves.  I had to work really hard to look past that and listen to what he was saying.
Specifically, I noticed that he overtalked Chris a number of times - and Chris was definitely not a hostile interviewer.  I have the sense Dr Dave might be a disagreeable dinner guest.  "Nobody else here has anything interesting to say - you all have to listen to me."  And at a high volume, too.

Its what I totally dislike about US television and talk radio these days.  As soon as I hear "that voice", I switch the station.  I really do not like being yelled at.  (Hmm.  I wonder why that triggers me so?  Something for me to look at.)

The sad thing is, I was actually pretty interested in the subject matter.  Clearly my insurance costs are going up, someone is making lots of money at it, it all seems very well-organized, and prevention doesn't seem to be high on anyone's list.  The bits and pieces of his evidence made sense to me, and it seems supported by other things I've read in other areas of the sickcare system.  And when he said it in a normal tone of voice, I found it fascinating.


Thanks Chris,
Dave Janda is truly a "fascinating" guest who connects an incredible number of incriminating political and medical dots. The amount of first hand information he presents is overwhelming.

Dave F. - I would call him passionate, maybe because he has been on the front lines of the sausage making, been hounded relentlessly for telling the truth, and wants to awaken those of us sleeping on the cattle cars headed to the slaughter house before he is the beneficiary of further attempts at attitude adjustment.


My friend who practiced at Stanford and UT-SW left medicine in 2004.  He told me Medicare patients would compete against each other to see who could bill the highest.   I guess when you are obese and sick that is the only way to compete since there is no incentive to get healthy.

It seems to me that there are a couple of basic mal-incentives and maladaptive beliefs that bring lots of trouble to attempts to get medical care.  The biggest is the triangular relationship and the administrative system it is embedded in to referee the relationships.
Triangular relationship

Because the relationship and issues are so complex, an abundance of rules, procedures and bureaucracies regulate "the game."

  • The patient -- wants to be well, have medical fears allayed, not spend much effort or money have help when needed, gain access to off-work notes, narcotics, medications, treatments and tests desired.
  • The doctor -- wants to earn money, do what he/she believes is "right," be protected from liability, and (most) to feel they are caring for people.
  • The Payor -- wants to show a profit, ensure that no experimental, unproven or unnecessary treatments are utilized, continue to collect premiums from patients in the years to come, and continue to hold a contract with doctors (hospitals and medical groups) for discounted contractual care in the future.
  • Regulatory administrative systems.  The complexity of the system ensures that armies of compliance officers and analysts are employed to ensure rules are followed to the letter.  Each use statistics and  rules to gain $$.
Gone are the days when a family with a sick child would give the doctor a chicken for making a house call.

I struggled with the podcast at first.  The pace of Dave's delivery bothered me more than volume.  He also threw in some tin foil hat catch phrases before he completely confirmed his credentials with content.
However, by 10 minutes into the podcast, I was captivated.  It is one of the most concerning podcasts I've listened to thus far. I do not want to live in a society where the government or the insurance companies who control the government, tell a doctor what my treatment should be.

Somewhat corollary, I have two daughters who are nurses in large North Texas hospitals.  They tell me that most of their patients are in the hospital due to self inflicted conditions, such as extreme obesity, diabetes caused by obesity and drug addiction related issues.  They also portray these patients as the worst sort of patients, who go out of their way to mistreat hospital nursing staff.

Our country has clearly lost it's way.

Kudos for this podcast Dave and Chris.  Please do it again.

Like the others above, my better half and I found David's delivery at first too strident, too much like certain other ulcer-inducing podcasters whom I avoid. Indeed, if this hadn't been a PP podcast I might have stopped listening. But we continued to listen, accepted his Reagan White House credentials as true, and sat appalled. He is clearly an angry and worried man, and with good reason.
We fervently hope and pray that David's assurances that the people are waking up and terrifying the globalists is true. Oh please…

I live in Australia where tt is abundantly clear that this parasitical system is being pushed onto and sneaked into the Australian healthcare system. Compared to the US we still have a humane system, one that does not bankrupt its users, and is cherished by the people generally who have the clear example before them from the US of how NOT to run a healthcare system.

However it's under stress as costs rise and rise, thanks hugely to the public's chronically poor dietary habits and sedentary way of life, and our federal government is forever looking for ways to make the people pay and pay. If the TPP ever gets up, the floodgates will open.


H.L. Mencken observed that "every man is ashamed of his own country." That goes for me too.


It's all of a piece with the push to have TTP/TTIP passed.
If they are indeed enacted collapse will be the only way to get out from under them.

On another note, I, too, find the up-down dichotomy much more useful than right-left. Looking at politics through an up/down prism really casts things in a different light which can be confusing initially but ulitmately clarifying.




The same friend PhD, M.D., MBA I mentioned above was in the running to be president of a very well known hospital.   When he lost, he went to the President of the Selection Committee to ask why he had lost given his extremely high patient ratings.   The President said those credentials are good but aren't as important with having a plan to keep the beds full.
So if the incentive is to fill beds (my current private doctor left for the same reason of wanting to prevent sickness not treat it), health will NOT follow.

I am pleased to finally hear a fellow physician tell the truth about health care. For anyone interested, the part of the stimulus bill he was referring to was called the Hi Tech act. It received little press coverage partly because all the medical societies backed it as a good idea. I did not and wrote to my two Senators outlining the problems with them. I received a form letter from one of them. The negative effects have transformed health care delivery. It has resulted in the closures of hundreds of small medical practices in this country, often forcing patients to see doctors in large health care systems. These doctors usually have their faces glued to the computer asking questions about where the guns are stored. These behaviors are strongly encouraged by the Hi Tech act. I would encourage anyone to do their own research by using the key words above. I have practiced family medicine since 1981 and I believe this piece of legislation has done incredible harm to our health care system. The purpose clearly was not to improve things, but to consolidate massive amounts of personal health data that can be accessed at any time legally by government officials. Read the HIPPA regulations if you are skeptical. The remainder of Obama Care is becoming well recognized as anchor pulling our country down to the bottom. I believe it will be the equivalent to the Smoot-Hawley  tarriff that led us into the great depression. We will be lucky if our depression lasts only 10 years.

Thank you Chris for an extremely good and useful podcast.  I will now enroll and spend some more money on this site, particularly since you are doing more Charles Smith interviews.
Regarding audio etc. quality.  There clearly is overmodulation / overdrive somewhere in the audio amplifying chain. that is the only criticism.

and much like the F 35s and housing crisis on we grow tossing around money taxing the healthy and lowering cost for the sickest. Accumulating and passing on genetic damages from environmental toxins, psychological traumas from war, gluttony with spiritual degradation on all fronts. All for what? So some health executive can feel superior. All Regardless of incomes, affordability, sound money or any decent incentive structure to guide investments. We are acting reckless in search of a sharp reality orienting apparatus. For forks sake, I think we all need to become a little more passionate!

Fact check on one of Dr Janda's claims re health care rationing and the funding of comparative effectiveness research for the Affordable Care Act (ACA).
Comparative effectiveness research (CER) does not take medical costs into account–it looks at the comparative clinical efficacy and safety of different treatments. You can make deeper inferences if you apply drug cost data to CER, but that is not what CER focuses on.

On the other hand, cost-effectiveness research applies efficacy + safety, cost of care, life years gained and other factors into mathematical models to determine which drugs to approve for coverage and the order in which they are used. It was developed in the UK and is used widely in Europe, Latin America and other regions where decisions for a large number of people are made at a national level.

Cost-effectiveness research findings are actually prohibited for consideration as part of US Federal healthcare decision-making, and it is made explicit that CER funding through the Affordable Care Act cannot consider cost-effectiveness parameters. Nor can Medicare or other Federal programs take cost-effectiveness into consideration (although this information can be and is used by other health care payers in the US). Here's an article about what happened:
I'm also not happy with Obamacare, and agree that the HiTech Act is a disaster. But I had to offer this correction. I'll get off my geek chair now.

Every medical care system is triaged and rationed by limited resources.  Rationing is a fact of life.  This is especially the case wherein most medical attention/trips to the doctor are not necessary and do not lead to an improved outcome, even potentially and there is not enough resources to satisfy every person who "wants.".  Yes, it would be wonderful if the doctor had unlimited funds (preferably his) that he can spend based on his judgment on how best to help each patient.  No restriction, unlimited resources, great.
In a world of insufficient, and limiting resources, someone has to decide when to say no to expensive treatment.  Otherwise you have a few patients sucking out all resources and a larger number dying unnecessarily due to lack of resources. This is a basic arithmetic problem.  An example is liver transplants.  There is a secret formula used to make decisions on rationing the limited resources, from what  I have heard.  

Instead of "rationing" itself being painted as evil (whoever does this will be evil, as promoting death panels, even if it is the family itself (uncle Joe can live 3 months longer if someone spends 150,000$ on life prolongation procedures: if the family had to pay this, would they?  Who will voluntarily give up their house?)  so why is this arithmetic problem suddenly evil when the question is posed at a larger community-payor level?)  It is unfair to blame the government rationers, since they have some kind of responsibility to make sure that resources provide the most help for the most people.

The evil, in my opinion is NOT rationing per se , but instead a system run by MBAs INSTEAD OF DOCTORS to avoid health prevention, keep those hospital beds full, and DIVERT the limited resources into the pockets of extensive layers of completely unnecessary highly paid "financial (insurance/billing schemes) professionals.  That 4 times excess (20% GNP and growing) "medical costs" is MOSTLY MBA driven and completely wasteful and CAUSES most of the rationing limitations.  If we had a single payor system with NO insurance companies /billionaire/millionare financial scammers interposed between the limited pot of resources and the patient, the ration limits would be much higher and the ration formulas and decisions would be more firmly in the hands of health professionals. The actual ration limits are caused by the insurance and financial racketeers, not by government death panels who seem to be doing the best they can under the circumstances.  The government rationers now indirectly serve the racketeers by default, by lowering the amount of resources available because of politics that divert most of the money to the racketeers, and thereby depriving the people of "health care" (or sick care as more correctly termed by CH Smith).  In any kind of fair, just system you will have a limit on how much the doctor is allowed to spend (unless he is spending HIS money or his patient's money, in which case the society at large is not being tapped to DENY other patients for money in a zero sum game). Life is tough, there is not enough resources to go around, but those ration limits would be MUCH higher if we get rid of the parasite racketeers.  Living and using a single payor system extensively (and exploring the costs and noticing the much higher competitive business) outside the US) is a real eye-opening experience.  

Your thoughts on rationing echo mine.  It seems like a requirement - there is no blank check - and it seems as though we have evolved from a system where the doctors used to be in charge to now where sickcare profit maximization runs everything.

I don't think the answer has to be single payer.  From what I recall of times past, US healthcare was actually pretty good and we didn't have a single payer system then.

Somehow it feels like the problem once again is concentration of power and cartel operations.  If we could diffuse ownership and keep those administrators down to a smaller salary, the sociopaths couldn't do as much damage as they do now.

It reminds me of banking.  You have 4 banks with most of the US deposits - that ends up being a cartel and they control government, with grossly inflated salaries at the top.  If you have 3 insurance companies and 3 drug companies and a lot fewer hospital owners, the same thing happens.  It also brings up a lot of new "harvest opportunities" too - encouraging the whole population to become unhealthy in order to maximize profits for the industry overall.  That's not something one evil hospital admin could do on his own, but a small group controlling the entire industry certainly could.

I think its all about concentration of ownership.

While I'm not specifically against singler payer - it seems to work in other places - I suspect if we got a single payer system and we kept the current set of cartels in place, probably nothing changes and the exorbitant cost remains, paid by the "single payer."


Another example of part of the on-going "I'm from the government and I'm here to help you" syndrome. When ever you involve an agent in the delivery of any service, you 1) increase the complexity of the system and 2) decrease it's effectiveness of delivering services, cost effectively. IMO, it is due to the old adage that, "too many cooks spoil the broth".
The recent situation in Alberta shows that they have gone through 7 CEO's of Health Services in 8 years, mainly due to lack of clear objectives, political interference and the resultant delays in decision making and implementation. Many of these individuals walk away from their positions and find other positions in other health care administrations. Many of the CEO positions salaries start in $500.000 range and come with sweet severance packages. In Alberta's situation, one individual left one province's health care bureaucracy to go to Alberta and left that position to take up a job in Australia's SA health system. Look around the developed world and you will find many health care systems suffering the same problems. Add in insurance company influence, and now you have a real "duck soup".

Solutions are few and the challenges many. As PP points outs, personal responsibility for your own health is where we start.


I use insurance in quotes because it was developed to cover catastrophic risks in the shipping  industry as the British Empire was growing. Much of what we call insurance today is a mix of routine and catastrophic 'coverage'. If health insurance were treated like life insurance as a product covering catastrophic disease with premiums depending on what risk category you were in then us everyday citizens would have some sense of connection between life style choices and our cost of insurance.  The consequence of higher insurance with poor decisions creates an incentive to avoid poor life style decisions.  Beyond that there should be a separate set of professionals (these are already out there but are not fully appreciated by the medical profession) whose primary role is to on a personal level educate/test/evaluate the everyday way each of us lives. In a perfect world this part of care could/should be the concern of the public purse with much the same rationale as public education. Right now poor life style decisions risks are socialized every bit as much as big bank risk taking. That is the moral hazard.
Now before you invite me to get my head out of the clouds I will admit this is a plan that will never be implemented as long as the current Hydra like system exists. The corruption runs too deep and the design flaws have been perpetuated by selfish people preying on our own fears of disease and death. 

It is helpful to me though to think about life this way.  I educated my kids to live this way and try to be a mentor worthy of my words by my example. I see Adam and Chris doing the same, as I would also expect of many PP participants.

The next step in this process is to explore ways to minimize  financial exposure to those who are married to the current system.  That is something I would like to see explored with some interviews with possibly some Amish or representatives of other groups who have chosen to work outside of the current health(sick)care paradigm.