I blog about free markets in medical care and transparent pricing.


Squandering Taxpayer Loot

If you are looking for proof of the fact that the wonderful folks in D.C. are more interested in lining the pockets of their pals than demonstrating good stewardship of the loot from the robbery of taxation, look no further than this article.  The folks at CMS (Medicare) have interestingly decided to pay physicians not employed by a hospital system amounts so low that doctors in record numbers are opting out of Medicare completely.  Simultaneously, CMS is double paying for physician services provided by physicians employed by hospital systems.  If you suspect that this is an effort to drive as many physicians out of private practice as possible, you go to the head of the class.

Many physicians are succumbing to this pressure, exacerbated, as well by the purchase expense of the mandatory electronic medical records systems and the American Medical Association’s new “ICD-10” code mess.  Many doctors are not following this script, however, either completely retiring from medical practice or seceding from the system altogether, refusing payment from any third parties whatsoever.

The deliberate and intended setup is clear:  fewer doctors available to see patients and many of these physicians are now salaried hospital employees whose compensation is not greatly affected by the numbers of patients they see.  Any guesses about what this looks like 5 years from now?  Countries with single payer systems will all tell you that rationing care will inevitably balance any health care budget.

Very paradoxically, these efforts will and are already beginning to backfire, an alternative and free market model of health care delivery emerging to satisfy those both:

1)waiting in lines and

2)the new healthcare consumers who are motivated shoppers due to their new and giant insurance policy deductibles.  

For all their work to crush the market, for all their efforts to destroy the private practice of medicine, one “good news” thing remains true:  the corrupt and central planners never get it right.

G. Keith Smith, M.D.

For more information about free market health care, visit:



HIPPA for you, but not for “them”

This article, which must be read to the very end proves that not only does the Obamacare website have major security issues, but that the incorruptible wonderful well-meaning folks in Washington who care so much about our health and running our lives knew this when the site was launched.  Advised about the likely security breaches, those in charge regardless gave the go ahead.  The end of the article shows in detail that the priorities and concerns of the Obamacrats clearly included everything but the welfare and privacy of individuals violated and damaged by the security breaches that were anticipated.  Oh, and don’t neglect the details of their cover up and the claim that national security precluded release of this information, a report by the government’s own GAO.

Before you read this article, I’ll warn you that a stiff drink will help you get through it, particularly if you read the previous link. Herein lies the tale of a victim of an Obamacare breach and the little known fact that well over half of all identity thefts now arise from information on the Healthcare.gov site.  

Once again, any individual in the health care industry that demonstrates the slightest carelessness with patient privacy will likely be bankrupted by HIPPA fines.  But if you are a government apparatchik, well, no amount of recklessness will get you in hot water.  What is criminal for you and I is standard operating procedure for those who claim that our welfare is central to their mission.  As these articles demonstrate, no lie is too great, no scam too bold for those state agents who maintain that our protection, security, well-being and health are their primary concern.

G. Keith Smith, M.D.

For more information about free market health care visit:



My New Video Blogs

I have been encouraged by my friends at Visual Image, the consultant helping me with social media, to create video blogs, all of which, completed as of today, are linked to in this blog.  I plan to embed all future video blogs into this written blog for the benefit of those of you who subscribe to this blog with RSS alerts.  The response to the vlogs produced so far has encouraged me to continue with this, as the following of the vlogs in a very short time has surpassed the following of my written blog!  I plan to continue to write, however, as I am convinced that writing, more than anything, has helped me to speak and communicate more clearly and accurately.  Thank you one and all for your support.

G. Keith Smith, M.D.

For more information about free market healthcare, visit:



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My interview on Varney and Co. last week

Here is a link to my interview on Fox’s Varney and Co., last week.  Initially skeptical, Mr. Varney came around towards the end of the interview.  If the email response I received from patients looking for an affordable surgical experience is any indication, this particular television show has a huge audience.  Hope you enjoy.

G. Keith Smith, M.D.

My interview on CNBC

Here is a link to my interview on CNBC last week for those of you interested.  When asked many years ago, what he would do if pronounced king for a day, Ludwig von Mises responded, “abdicate.”  I had this in mind when asked at the end of the interview what I would do if I were pronounced the CEO of “Obamacare.”  I am pretty sure, based on their reaction, they didn’t anticipate my response.  Hope you enjoy.

G. Keith Smith, M.D.

For more information about free market health care visit:



The Criminal Regime’s Double Standard

One of the most compelling and well-written books I have read in a long time is Thomas DiLorenzo’s “Organized Crime: The Unvarnished Truth about Government.”  In almost every chapter he drives home the very simple point that we would never tolerate behavior from an individual that is every day and commonplace for governments all over the world and all through time.  In short, governments routinely engage in activities that would be considered criminal for you and me.  

I thought about this conundrum recently while reading about a medical data breach at a large hospital system, the work of Chinese hackers if you believe the media.  In spite of having taken all precautions, embracing all safeguards, their system was compromised using a malware software.  The hospital system had even purchased insurance to protect them from such an incident, a policy that served to make the victimized patients “whole,” or as best as possible.  Their efforts to prevent such a cyber attack and their efforts to insure that anyone victimized by such an attack are laudable.  But nothing will protect them from Uncle Sam’s HIPPA knives, congressional hearings and fines likely on the way.

Here is the order of events, then:

The federal government requires the purchase of electronic medical records systems or slashes Medicare reimbursements for those who don’t comply.

Once digitized and no longer secure, the patient medical records, if vandalized, represent an almost limitless liability to the physician or hospital in whose possession the records rest when compromised.

All the while, the federal government requires that digitized patient data be transmitted to them (meaningful use) without the patient’s consent in order to better order our lives and for our own good.  

The most prominent item in Ron Paul’s office was a sign that said, “Don’t steal.  The government hates competition!”  I think the same can be said about HIPPA, a law which basically grants the government a monopoly on violating the medical privacy of individuals.

I find it impossible to believe that the “state” cares about our medical privacy when no group of Chinese hackers can begin to more effectively mine our personal information than the government health care hackers (never mind the NSA!).  The hypocrisy of those who enforce and benefit from HIPPA should be clear to all, by now.  You say, “Wait a minute!  No one working for the government is going to use my medical information in a way that would harm me!”  Can you honestly say that with a straight face?  That the privacy violations of this gang of eavesdroppers are sanctioned by the “state” is particularly concerning as the primary beneficiary of this information is…..the “state.”

Lew Rockwell once said that there is only one way to know for sure that something about our government is true and that is when the government issues its official denial.  That HIPPA exists to protect our medical privacy is yet another of the “state’s” many lies so many have chosen to believe.  

G. Keith Smith, M.D.

For more information about free market health care visit:



Hit ‘em harder, Dan!

Daniel Goldberg and his Free Market Health Group are part of the emerging and growing cast that is introducing physicians to the idea that embracing the discipline of the free market, rather than rejecting or resisting this force, can actually be good for the physician’s practice.  Mr. Goldberg recently contributed an article to the periodical “Orthopreneur” which you can read here.  I informed him on a Facebook post that I was going to take friendly issue with part of his article, as I believe he has understated the very point he was making, the result being a far too kind characterization of our friends in the insurance world.

Towards the end of his article he writes:

With self-funding, the employer “rents a network” from a larger carrier like Cigna or Blue Cross. This rental simply means that the employer will pay the same cost for procedures as guaranteed under Cigna’s network. However, instead of the insurer paying the claim, the employer pays the claim and acts similar to an insurer. Also, unlike most plan arrangements, the employer is not precluded from contracting with providers outside of the network for lower rates.

The italics are mine and are the heart of my issue with this paragraph.  You see, here in Oklahoma, self-funded employers are securing pricing that is far better than the pricing “negotiated” for them by their “network.”  The savings that Advantage Health Plan (part of the Kempton Group) has realized, for instance, is almost 8 million dollars in just over 2 years and is calculated as savings compared to what would have been paid at “network” rates.  Same goes for Oklahoma County, $570,000 saved in 5 months!  Compared to historical network payments for the same procedures.

While the big carriers who often are administrators of self-funded plans claim to have their client’s interests at heart, they shun from their network the highest quality and lowest priced players in the market, my facility being a classic example.  Part of the reason for this is the massive revenue generated by selling their “discounts” or repricing of claims, the carriers claiming as their own, a percentage of the “savings” they have generated for their clients. With this arrangement the last thing the carriers want is to seek out reasonably priced care, particularly from a transparently priced facility, as the absence of any claims adjudication eliminates their repricing opportunity and revenue.

Employer groups are directly contracting with facilities like mine, shoving their PPO or network aside and realizing huge savings as a result.  Mr. Goldberg and I are in agreement.  I just think it bears pointing out that his point is even stronger than he has made it out to be.  Employer groups are not just looking for cash based physician practices and facilities.  They are willing to give their carrier the boot to reach those bold enough to make this change in their medical practice.

G. Keith Smith, M.D.

For more information about free market health care visit:




Poisonous Restaurants and the VA Hospitals

Imagine for a moment that you own and operate a restaurant knowing that if you provide spoiled food and rotten service, you will subsequently make more money.  You openly employ strong-arm and intimidation tactics to keep any conscientious employees from revealing what is really going on in the kitchen.  Sound like a restaurant people would want to frequent?

This is the VA hospital system.  High mortality rates, patient neglect, extreme waiting lines, intimidation of wannabe whistleblowers, you have it all.  And a 17 billion dollar bonus from Washington for providing this fine service.  One of the three senators to vote against rewarding this incompetence and malevolence was Oklahoma’s own Dr. Tom Coburn, soon retiring to his plough.  

Awarding more loot to the VA after the revelation of the most recent and deadly fiascos in their hospital system should come as no surprise, though, as any government program that fails only does so because not enough money was allocated in the first place, right?  Coburn, cited a 60% budget increase at the VA in the last few years to argue against the idea that a lack of loot was the trouble.  He basically said the congress was about to give the alcoholic VA another drink.  Not exactly what they need.

What they need is to not exist at all.  Any one who claims to be a fan of single payer health care or government-provided health care should tour or possibly receive their “healthcare” at a VA hospital.  Nothing could open such an individual’s mind to market alternatives any faster.  Compassion and competence doesn’t typically come from the untouchable folks who are paid the same whether they do or don’t provide compassion and competence.  If you think I am kidding, notice carefully the number of times you will see the difficulty firing someone at the VA is referenced when you read about pending reforms.  

The free market destroys businesses and institutions providing the type of “care” rendered at the VA, a concept the Austrian economists refer to as “creative destruction.”  This powerful cleansing mechanism of the market allows for a better allocation of resources to those businesses or institutions that provide the products and services that people actually want.  No such mechanism exists in governmental programs.  The opposite incentive exists, rather, to generate sufficient complaints and misery, a strategy which guarantees even more taxpayer money.  Unfortunately with the disaster of the VA’s version of Obamacare, we have seen this demonstrated once again.

G. Keith Smith, M.D.

For more information about free market healthcare visit:


www. marketmedicine.org

Obamacare, Goebbels and Ginsburg

A friend recently opined to me about his increasing frustration with those who are unable to distinguish between politics and religion, particularly those for whom politics is their religion.  This describes statists of all stripes, I think.  Folks either want to use the power of the state to abscond with the property of others in order to better complete “the Lord’s work,” or they justify the state’s trampling of individual rights in the name of “the greater good.”  The fascist, Joseph Goebbels had the following to say:

"My Party is my church and I believe I serve the Lord best if I do his will, and liberate my oppressed people from the fetters of slavery.  That is my gospel."  Or how about this one from Mr. Goebbels:

"I am only the instrument that God uses to sing his song.  I am only the vessel that nature smilingly fills with new wine."

It is no mistake that Germany’s national anthem is entitled “Deutschland uber Alles.”  The supremacy of the state and the individual’s role in feeding this parasitic institution are unapologetically clear in the writings of men like Goebbels, while more subtle, but no less fascistic musings and thoughts surround us today.  

Here is a quote from supreme court justice Ruth Bader Ginsburg:

"Frankly I had thought that at the time Roe was decided, there was concern about population growth and particularly growth in populations that we don’t want to have too many of."  Actually, that isn’t very subtle at all, is it? While the German fascists claimed to hate the socialists, Hayek’s “Road to Serfdom” shook everyone who read it by the collar, pointing to the central planning that characterized both of these economic and political systems.  Ginsburg’s quote indicates that she sees herself as someone who knows who should be born and who should not, perhaps who should be allowed to stay and alive and who should not.  I cannot say that I have ever met anyone smart enough to wield that level of power.

What does any of this have to do with health care?  My old friend Lawrence Huntoon writes in “AAPS News,” August 2014 this:

"According to an article in the Wall Street Journal, insurance companies are paying oncologists $350 per patient per month for strict adherence to treatment protocols-which are geared to cost containment.  It is very predictable.  Obamacare forces physicians into accountable care organizations (ACO’s), and then strict cost-containment protocols are implemented. In the realm of cancer care, these are death panels.”

Combining health care with government invariably results in the individual’s interests versus the state’s interests scenario playing out.  Guess who has historically won this battle?  Once the “state” is paying for healthcare, the “state” determines what health care will be paid for-even what qualifies as meeting the definition of health care.  After all, “public” resources are distributed by popular vote and that’s not good news for the sick minority. That the federal government is mandating the collection of virtually everyone’s health information and data should be of great concern to anyone who has followed any history of what governments typically do with information.  They desire this information simply because they intend to use it.  To ration.

Those same folks who claim to want all of this data for our own good, those same folks who mandate vaccinations to ostensibly prevent the spread of communicable diseases are the same ones who just brought the ebola virus into Georgia.  Doesn’t square, does it?

G. Keith Smith, M.D.

N.B.  Many thanks to the American Association of Physicians and Surgeons for the Ginsburg and Huntoon quotes from their fine newsletter.

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Dr. Parente and I Agree (and disagree)

Our local newspaper, the Daily Oklahoman, recently published this editorial by Stephen Parente, PhD, of the Carlson School of Management, University of Minnesota.  Make no mistake, Dr. Parente, writing opinion pieces like this one is in no danger of receiving an appointment to the president’s council of economic advisors.  I would like to expand on some of his points and then use his reasoning to explain why the “Austrian” brand of economics, rather than those varieties relying on economic modeling remains so appealing to me as an aid to understanding events and the business environment.

Dr. Parente correctly points out that health insurance premiums will skyrocket over the next two years and in fact, this has already begun.  Mandating certain coverages and admitting those with pre-exisitng conditions to risk pools has contributed significantly to the initial surge in the cost of health insurance.  I have written previously that forcing an insurance company to cover someone with a pre-existing condition is like allowing someone to purchase homeowner’s insurance after their house has caught fire.  The effect on the policy price for the neighbors if this is allowed, is predictable.

Parente writes, correctly, that when the Obamacare re-insurance and risk corridor provisions end, the insurance companies will no longer have access to taxpayer money in order to subsidize the highest risk individuals. This, he maintains, will result in an even more aggressive surge in premium charges.  At this point in the piece, I wondered if Dr. Parente thought of Obamacare as poorly crafted or whether, like me, he entertained the idea that the train wreck he has predicted was intentional and deliberate. 

Is it possible, for instance, that ending the insurance companies’ access to taxpayer loot, was a symbolic kick in the teeth that so many on the left wanted to see delivered to the “evil” insurance companies, only to see yet another executive order at the 11th hour to suspend this aspect of the “law?”  (Remember that the uncompensated care scam, Disproportionate Share Hospital Payments, was to end with the passage of Obamacare, only to have this provision suspended, a huge gift to the corporate hospital industry.)  Or will ending these insurance subsidies bring ruin to all of the insurance companies except for a few big boys who will control the whole game when the dust of consolidation settles?  History is on my side, I think, in ascribing the worst of motives to the gang in D.C.  I would love to get Dr. Parente’s thoughts on this at some point.

Towards the end of Parente’s piece is where he and I part ways and I believe it is due to his faith in his economic models to provide an accurate forecast of the future health care landscape.  The economists of the “Austrian School” place little or no faith in models primarily due to their adherence to the theory of subjective value, a theory that basically states that something is worth what you can get for it, each purchaser, as an individual, valuing goods differently, depending on their most urgent need at any given time (my apologies to economists for my butchering this, if I have).  

To say that employer health care coverage won’t “stem the losses,” as Parente writes, neglects the fact that employer groups are seceding from the insurance game in record numbers, self-insuring for the health needs of employees, removing themselves from the gunsights of government and their insurance cronies.  

Traditionally an option for only the most gigantic companies, self-insurance, thanks to the expense associated with the Unaffordable Care Act, has become more attractive to companies with as few as 50 employees. (We have 42 full time employees at Surgery Center of Oklahoma and have been self-insured for 7 years now).  A surge in the number of competitive and transparently-priced medical providers (physicians and facilities) has also significantly ameliorated the risk of self-insurance.  After all, to be self-insured (often referred to as self-funded) means paying health claims out of operational revenue, backed up by “re-insurance,” a catastrophic, disaster-type policy, often very reasonably purchased.  In this arrangement, the self-insured employer is a highly motivated consumer, always seeking value in the health marketplace.  Self-funded employers all over the country are steering their employees to facilities like ours by offering to pay the entire bill (no co-pays or deductibles), travel and lodging, as well, in an effort to keep their costs down.

It should come as no surprise that the Surgery Center of Oklahoma is very popular with many self-insured companies and their employees, our prices representing savings that translate into better profits and profit-sharing with company employees.  As more self-insured companies seek out the value of transparently-priced health facilities and physicians, the deflationary effect on the actual price of health care should not be underestimated, something that Dr. Parente fails to take into account.  That is the problem with economic models, after all.  There is simply no way to account for all of the variables involved, much less the shifting of the known variables as conditions change.

Finally, as premiums surge for individuals and their insurance becomes unaffordable, many individuals will drop their insurance altogether or simply increase their deductible.  The purchase of healthcare will then be largely (or entirely) out of the pocket of these individuals, and people spending their own money tend to ask the same question, don’t they?  People want to know “how much is it,” and they want to know up front.  Just asking this question is deflationary, as knowing that the patient will walk away seeking a more reasonable price if too large a quote is given, will tend to keep prices in check.  

In all fairness to Parente, he had little space to share his thoughts and he and I might actually be on the same page.  I am going to give him the benefit of the doubt due to his devastating finish:

"The Affordable Care Act was supposed to make health care cheaper while providing universal health care. Instead, it will make health care unaffordable for many while leaving more Oklahomans uninsured. This health care cure may be worse than the disease."  

I remain optimistic.  I believe that the Unaffordable Care Act will very unintentionally and paradoxically give us a shot at a true consumer and market-based health care industry thanks to this one simple truth:  the government never gets it right.  Obamacare’s attempt to line the crony’s pockets will more likely destroy them as the empowered consumers shun the low-value providers and increasingly understand the entire scam.

G. Keith Smith, M.D.