I blog about free markets in medical care and transparent pricing.
My father recently asked me if any of the hospital administrators whose billing practices have bankrupted countless patients ever had face to face contact with those whose lives had been ruined by their greed. Or, he asked, were they like drone operators, destroying people’s lives in a remote, impersonal way safe in their office?
Look around. Hospitals building everywhere. Sponsoring sports franchises. Buying advertising in high-priced media outlets. Ceaselessly buying physician practices. Buying rural hospitals destroyed due to having bought all of the small town physician practices and diverting their referrals. Building on to their emergency rooms. Building free-standing emergency rooms, so-called loss leaders for their institutions. Multi-million dollar “logo” changes. Giant and well-payed administrative staffs. This is what you see. One of my partners told me the other day that after reading TIME Magazine’s article on abusive hospital billing practices, in which Oklahoma City’s own Mercy Hospital was named, that the rotating cross on top of their hospital should be replaced with a dollar symbol! He is seeing things pretty clearly, I think.
Contrast what you see with what you are hearing. Hospitals are going broke. They can’t make ends meet. The uninsured are breaking the hospitals’ backs from emergency room over-utilization. Hospitals won’t survive unless Medicaid is expanded (funny that they want this expansion yet this is a program they simultaneously claim underpays them and justifies their cost-shifting to others!). These are the lies that are primarily responsible for bringing us Obamacare.
The truth is that economically, hospitals are not unlike utility companies in that they have high fixed costs. As Thomas DiLorenzo explains in his brilliant book, “Organized Crime: The Unvarnished Truth About Government,” once the plant is built and the power lines are present, the cost of adding an additional utility customer approaches “zero.” Once the emergency room is built and staffed, the actual cost of adding an additional patient approaches “zero,” other than the actual supply costs. As a physician who owns and operates a medical facility, I can tell you that the actual supply costs are not that high even in a surgical environment.
Also keep in mind that while the hospital spokesmen claim that they have to take everyone regardless of their ability to pay, they get paid even when they don’t get paid, throught the uncompensated care scam. As I’ve written previously, as the hospitals wave the charity flag with one hand they are fleecing the taxpayers through this scam with the other.
When Jim Epstein of Reason Magazine was here to do his piece on our facility, he discovered that the amount Medicaid paid local hospitals exceeded what we had listed online. Keep in mind that these “horrible reimbursements” by Medicaid are one of the primary excuses used to justify cost-shifting by these hospitals. And think about this: if the costs for the indigent are shifted to others who do pay, how is it that the hospitals are providing indigent care? Seems to me they are getting paid for everyone that comes through their doors when you think about it this way, the uncompensated care scam notwithstanding.
We make a profit at the prices we have listed online. These prices are 1/6-1/10th the prices charged for the same procedures at most “not for profit” hospitals. This is what you can see for yourself. What you hear if you listen closely is a quiet panic engulfing those in the medical industrial complex now that this free market, transparent pricing model is getting noticed and gaining ground. This movement, if left to its own devices will reduce the cost of care and raise the quality bar, just like competition does in every other sector of the economy.
G. Keith Smith, M.D.