I blog about free markets in medical care and transparent pricing.
Here is an update on some of what’s happening at The Surgery Center of Oklahoma.
We have recently decided to accept credit cards for payment of services. The price online will be adjusted at the time of payment to reflect the percentage the respective card company charges us. We are very excited to see how this develops.
I am travelling and speaking all over the country about medical free markets and price transparency. The greatest demand for speaking opportunities seems to be from self-funded employers and their benefits administrators who are interested in sending us referrals from out of state.
Our new website and logo will be launched/unveiled in a few weeks now. This new website will allow me to nimbly change prices as new competitors in the marketplace appear, will allow me to add new procedures with pricing and will also allow for video display….even some video blogs. This has been a huge undertaking but will allow for us to showcase our facility and staff.
Many of you already know that I have been on the John Stossel Show and CNBC. There is much more national media exposure to come. As I wrote recently, this message has been received as “good news in a bad news industry.” It is hard to criticize cheaper and better, although the statists always seem to find a way. Our local media are beginning to get in on the act, interestingly risking alienating some of their largest media buyers in doing so.
Patrick McGuigan, modern-day Joseph Sobran, has asked me to contribute a biweekly column to his publications, Capitol Beat OK, The City Sentinel and OklahomaWatchdog.org. I look forward to contributing to his fine outlets. Many of the writings will be blogs, but will reach a large audience otherwise not exposed to our message.
We are in the process of organizing a national symposium on free markets in medicine and price transparency, involving everyone in the medical industry that is participating, businesses who are increasingly demanding this, benefit administrators who “get it,” and think tanks and even policy makers. I’ll keep you posted on this as it progresses.
G. Keith Smith, M.D.
It looks as if the Oklahoma legislature has provided the dowry to the Oklahoma State University osteopathic hospital that Mercy Hospital Oklahoma City was looking for. The state budget provides for $18.5 million to bail out this hospital, interestingly, $250,000 more than they said they needed.
Mercy, Oklahoma City was looking at an arrangement to “partner” with the Tulsa osteopathic hospital (no giant Tulsa hospital wanted anything to do with them, even with a dowry/bailout), but was waiting to see if they received this taxpayer gift.
If anyone knows how to make money at a not for profit hospital, it is Mercy. Of all the hospitals in the country, TIME magazine singled them out as price abusers. I predict that the bills from the osteopathic hospital will soon reach the level of the bills at their mothership in Oklahoma City. I also predict that the other Tulsa hospitals will raise their prices, knowing that all they really need to do is stay just below the new bankrupting standard across town.
As the free market movement in health care gathers steam in Oklahoma, I also predict that these medical corporatists will find that they have miscalculated. If patients are willing to travel to Oklahoma City from Mendocino, California, Charleston, South Carolina and Montreal, to mention just a few of our sources of referrals, patients from Tulsa will certainly drive to Oklahoma City to avoid medical bankruptcy.
Mercy got their wish then. They married the Tulsa hospital bride with an extra $18.5 million in her purse. Maybe they will use the extra $250,000 they hadn’t counted on receiving for a party, and invite taxpayers from all over the state and from whom this loot was extracted.
G. Keith Smith, M.D.
If this is the best the statists can do we are in good shape. Dr. Peter Ubel, no Rothbardian, asserts that price transparency could actually increase the price of healthcare (Lasik?) and that while cardiologists and other super specialists make too much money, primary doctors don’t make enough.
Dr. Peter Ubel, like all central planners, suffers from the fatal conceit Hayek brilliantly described in “The Road to Serfdom.” Once again, prices emerge from a free market…they are not imposed. That Ubel thinks or feels some doctors make too much money is irrelevant and more than likely relates to an unresolved envy issue with which he is struggling, not unlike that Mises dissected in “The Anti-Capitalist Mentality.”
I wasn’t going to respond to this silly article but there is something to learn, after all. In response to a question about the free market and price transparency movement we are seeing in the U.S., Ubel says this:
The free market is a wonderful thing, when it enables consumers to make informed choices about which products to buy. But medical consumers, a.k.a. patients, often have a hard time making the kind of savvy choices that will bring discipline to the market. Moreover, they are often in positions of making high-stakes, emotional decisions, in short time spans, without fully understanding their choices. To make matters worse, many physicians I’ve spoken with say they feel it would be inappropriate to discuss the cost of care with patients, especially when they face life-or-death decisions. Hard to imagine how the market, on its own, will work effectively in such circumstances. We need to bring more market efficiency to healthcare, but it is unrealistic to think that a completely unregulated free-market is going to solve our problems.
Now the first thing to say, is that while he is pontificating and thinking deeply about things, we are doing everything he says can’t be done. Also, patients are well-informed in spite of his arrogant characterization of them.
Second, he has contaminated his view with a time twist. Here’s what I mean. He is judging the applicability of free market principles in the future, using a current time context. Here is why that is absurd.
In Oklahoma City, there are car dealerships that are interested in selling you not only your first car, but every car you ever buy. These businesses have built reputations over time, reputations of fair dealing and thinking long term, not the hit-and-run “gotcha” mentality at some car lots. Everyone knows who the reputable dealerships are. The same goes for roofers and plumbers and tire stores and banks and….and now healthcare. Everyone in Oklahoma City knows that if they need surgery, The Surgery Center of Oklahoma is the place they can go that will treat their pocketbook with respect while rendering the best care. The same goes for those needing a total joint replacement. They go to the McBride Clinic Orthopedic Hospital. The same goes for a colonoscopy. They go to Digestive Disease Specialists. The same goes for cancer chemotherapy. They go to my friend Dr. Aleda Toma and her partners at Cancer Specialists of Oklahoma. The same goes for mammography. They go to Breast Imaging of Oklahoma. The same goes for cardiac disease or surgery. They go to my friend Dr. John Harvey and his partners at the Oklahoma Heart Hospital. The same now goes for major gynecological and urological and general surgery requiring an inpatient stay. Patients will very soon know more about Deaconess Hospital, the latest to join us in this price transparency movement.
Here’s my point. The reputations of these facilities have taken time to create. To say that after flipping the switch to free market, people won’t instantaneously know where to go for care, is to disallow the necessary time for discovery of which facilities represent the best value and is logically a cheap trick.
Dr. Ubel thinks the price paid for healthcare is out of whack. Here, he and I agree. Dr. Ubel thinks there is some better way to allocate scarce resources than the free market. This is where we disagree. He has nothing to back up his stance other than his feelings. I think the countless patients we have treated and simultaneously helped to avoid bankruptcy are sufficient to make my case.
G. Keith Smith, M.D.
Let’s say that i have advertised the price of an anterior cruciate ligament reconstruction (all-inclusive) at $6990. Let’s say that the implants (screws, fixation devices, etc) are included in that price (I don’t mark up implant costs). Let’s say that 1 of the 10 surgeons at my facility that does this operation insists on using an extremely expensive implant, one coming from a manufacturer with which he has a “relationship”….no such partner exists here…this is just for illustration. I can either send him patients (business) which means we lose money at the surgery center, or I can charge a whole lot more if he does the surgery, which prices him out of range, or at least begs the question of why is he so much more?
This is the market at work. While central planners would work to institute price controls in the market place, the unfettered market would place the outlier physician’s price under the microscope. Transparent pricing would quickly reveal that something didn’t smell right. While legislators would outlaw physician owned distributorships, transparent pricing would empty the waiting rooms of physicians who play these games.
Who benefits from non-transparent pricing? All of the folks who would suffer if their shenanigans were discovered, that’s who. The only way that unethical physicians, pharmacies, hospitals, physical therapy clinics, etc. can thrive is for pricing to be veiled to some degree. Otherwise, comparison shopping would create value questions, none of which would have satisfactory answers in the case of the gougers.
The answer to “implant” profits is not a tax on implant makers any more than the answer to fraud in medicine is government goons. The answer is price honesty and a movement away from third party payment, government payment for healthcare, in particular. What is Obamacare? If you guessed “just the opposite,” you go to the head of the class.
G. Keith Smith, M.D.
In Frederic Bastiat’s “Economic Sophisms,” he begins by quoting the English philosopher, Jeremy Bentham:
“In political economy there is much to learn and little to do.”
Bastiat thought this so important that he begins his powerful book with this quote, one which at once acknowledges the natural power and tendency of free markets to benefit everyone, while simultaneously discounting the ability of the legislator to achieve little but mischief.
Almost all legislative efforts, all protests to what I am about to write notwithstanding, are geared toward the benefit of the producers in a respective industry, not the consumers of any individual product or service. Bastiat, with piercing and brutal logic, demonstrates that the interests of the producer and those of the consumer to be completely and absolutely opposed. The producer benefits from scarcity of his product, as this brings him a higher price, while the consumer benefits from an abundance of the same product, this absence of scarcity manifesting as a lower price.
Any consideration of law or policy, must therefore, consider the effect it will have on both the consumers and the producers, or the economic analysis is at best absurd, at worst duplicitous. Expanding Bastiat’s analysis, then, any law or policy the result of which brings higher prices to an industry, whether intended or not, demonstrates without further proof or theorem needed, that the producer was the beneficiary.
If you think that this applies to Obamacare, you get a gold star. No further proof is required that the producer (hospitals, insurance companies, etc) is the beneficiary of this law, other than the fact that the price of healthcare and health insurance has gone up. Furthermore, as mentioned above, that the interests of the producer and consumer are diametrically opposed, to the extent that the producer is benefitted, the consumer is impoverished. When the market is allowed to function, these opposed interests arrive at a mutually beneficial space. When the “state” makes its entrance, usually due to the bidding of the producers, the consumer is robbed of some of his marketplace influence and power.
Ever wonder why as an individual you can contribute to a 401K with pre-tax dollars but can not buy health insurance with pre-tax dollars? If you guessed that:
1)this is a way to make you buy more of what Wall Street has to offer than you normally would and you also guessed
2)that the insurance companies benefit from selling one policy covering 1000 group lives, rather than 1000 individual policies, grab another gold star.
In both instances above, the tax law is twisted in favor of the producer, not the consumer. In addition, having priced their insurance product beyond what freely acting consumers consider reasonable with record numbers of “uninsured,” the government has responded with Obamacare, a law which makes everyone buy an insurance product they wouldn’t buy on their own.
Corporate hospitals didn’t support Obamacare because it would help the poor and uninsured. They supported it because they would have guaranteed payment for every person who came through their doors, direct payment from the taxpayers in many cases, with no need to deal with reluctant paying or unsatisfied patients. How’s that for a business plan, where you get paid whether the customer wants your product or not (insurance) and whether the patient is satisfied with their service or not (hospitals)?
Any legislation that rewards producers does so at the direct expense of consumers. This is a game that has gone on as long as politics and the “state” have existed, a game that must be accompanied by a propaganda campaign meant to convince its victims are its beneficiaries. As I have said before, nothing oozes out of Washington that doesn’t benefit those who wrote or promoted it. The last thing on the mind of these central planners, was greater accessibility, lower prices and higher quality. Re-reading Bastiat’s brilliant and timeless analysis helps make this even more clear to me.
G. Keith Smith, M.D.
1). It is expensive to provide health care.
It actually is not that expensive. What most hospitals charge for healthcare is another matter altogether. Even the supply costs are not that expensive and as a health care facility owner/manager I can speak from experience. Understand that medical facilities are not economically unlike utility companies that incur high fixed costs at startup, but once they are up and running, the additional cost of adding another consumer/patient approaches “zero.” In other words, hospital overhead doesn’t significantly increase with the addition of more patients.
2). Big city hospital emergency rooms are a big money loser.
See #1. Also, if this were true why is there a crane in front of almost everyone of them, building on? This hospital department represents the portal to some of the most lucrative activities a hospital encompasses with imaging, laboratory and surgery. One hospital system in Oklahoma is building free standing emergency rooms! Enough said.
3). Cost shifting is necessary for hospitals to stay afloat.
I’d say they have overdone this a bit, as plenty of money is available for the sponsorship of sports franchises, hostile takeovers of physician practices (particularly those in rural communities), subsequent hostile takeovers of rural hospitals, building and advertising campaigns….I could go on. Also keep in mind that when hospitals admit to shifting costs to those who pay from those who don’t, they are admitting that they provide no indigent care, after all. All they are doing is fronting the money to one they are going to take from another, while complaining that they have “lost” money.
4). Not for profit means not make a profit.
It actually means, “don’t pay tax.” How would you like this deal? Charging giant sums and “writing down the balances” allows these entities to maintain the fiction of their “not for profit” status. As I’ve said before, “the one thing these not for profit hospitals are good at is making money.” Over sixty percent of personal bankruptcies are due to the medical bills that these “charitable” hospitals create.
5). Physicians referring their patients to the facilities they own represents a conflict of interest, while doctors employed by a hospital referring to their mother ship does not.
Doctors who over-utilize, doctors who do unnecessary surgery are out there. They typically work for corporate hospitals, though, as fellow physicians don’t want to be co-owners with these idiots due to the increased liability involved. Seriously, why is it not ok for physicians to own hospitals but it is ok for hospitals to own physicians? Hospitals lean on their employed doctors to order more MRI’s and lab and do more surgeries all the time, so that they will “earn their keep.” Exaggerating the complexity of daily hospital visits by hospital-employed physicians, using “cut and paste” electronic medical record technology, is also widely encouraged.
6). Upfront and transparent pricing is impossible in health care.
We have done it. Enough said. Hospitals can’t do this. Hospitals are doing this. Ok. I said more than I should have.
7). Free market principles don’t apply to health care.
Free market principles always apply, in spite of all attempts by the state to thwart them. Acting in concert and consistent with free market principles allows for the most rational and fair and least wasteful and most moral allocation of resources. Acting in concert with the free market and its characteristic open competition causes quality to soar and prices to plummet. Every time, no exceptions. Patients from all over the country are using our online pricing to leverage better deals in their local medical markets, as our facility and others embracing transparent pricing are only a short plane ride away! As hard as many hospitals are trying to avoid it, they are in a competitive marketplace whether they like it or not. Those in the medical industrial complex who say that free market principles don’t apply to their industry are typically those who benefit from avoiding competition at all costs.
8). Patients have no idea how to shop for quality health care.
I have found just the opposite. Most patients are adept at spotting a charlatan doctor or a poor quality facility. The first thing many notice is the “treated like a number” feeling. Patients tend to trust the doctors that will take time to talk with them and explain their condition and options, not force feed them some canned speech. Contrast this with patients going to see corporate hospital employee doctors, having no idea that these doctors are sending them to specialists and surgeons they are told to patronize, not specialists who are any good. I think that patients are better off shopping for quality themselves, rather than leaving this to the “network” of employed doctors. These doctor-employees are too conflicted and compromised.
9). The more you pay for healthcare the better it must be.
Actually the less you pay for health care the more likely it will be of higher quality! This is counterintuitive but let me explain. A new participant in the medical marketplace must compete in order to draw patients. Price is one way to compete. High quality is another. Medical entrepreneurs risking their own capital are like any others in that they compete on price and quality to mitigate the risk of losing their shirt. On the flip side, corporate medicine (most hospitals) has taken steps over the years to insulate their facilities from competitors (licensing requirements, certificates of need, etc.) and feeling less need to compete, don’t risk nearly as much by ignoring quality in their institutions. When someone recently said to a large hospital CEO,” ..shouldn’t it bother you that your hospital is the worst value, highest priced player in the market,” the CEO said, ”No. We have leverage.”
10). Obamacare was promoted by people who care about our health care.
The stock prices of corporate health care soared after Justice Robert’s ruling. These are the true beneficiaries and the reason this legislation was pushed. Rather than serve customers and profit from this market action, these corporate hospital players will extract their loot from the taxpayers, the quality of their product or service divorced from any quality or value perception by the patient. Poor patient care in hospitals will now be treated the same as poor outcomes in public schools. More money will be thrown at them. This model of rewarding incompetence will insure that the health care bureaucrats, those who promoted this “law,” will thrive.
- G. Keith Smith, M.D.
I think it is hard to know what is true these days. One thing is definitely true for me though. I think that most people, myself included, can only take so much truth in one sitting. In my experience, freedom-minded thinkers tend to be independent thinkers and most of the time are open-minded, with a willingness to self-examine and change prior beliefs and thoughts that don’t pass the test of philosophical consistency. This type of mindset can lead folks to something called the truth, something to which ideologues of all stripes are often times blind. And drinking in too much truth too fast can breed unbridled cynicism and a sense of unbalance.
One of my favorite movie lines ever was from “V for Vendetta,” when the chief inspector, brilliantly played by Stephen Rea, asks his protege this question: ”..would you want to know?” In this scene he has reluctantly come to the conclusion that his own government cannot be ruled out as a suspect in the deaths of many of the citizens. He very carefully states that he has no proof, but rather asks that if it were true, “would you want to know?” I see his question now as an extremely well-mannered gesture, an opportunity given to the young protege to limit the pace of unpleasant ideas coming at him.
I think that for those of you who would answer “YES!” to the inspector’s question, you should remind yourselves how unsettling the nature of the truth can be. Believing, for instance, that the Unaffordable Care Act is crafted to line the pockets of various corporate interests, no matter how many are killed or neglected in the process, is not sunny picnic talk. After coming to this conclusion, I craved a P.G. Wodehouse novel for my own balance.
While the truth about the world around us is troubling and unsettling at times, the truth about freedom and liberty itself is always uplifting and buoyant for the spirit. The miracle of the free market has brought affluence to the human race like no other influence on the planet. Mutually beneficial exchange renders both parties wealthier. This tendency to improve your own lot by cooperating with others, while all parties pursue their self-interest, can certainly be soiled by the state, but the tendency and the truth of the nature and consequences of this interchange remain, nonetheless.
The more anger and vitriol I see from the statists, the more I know they are threatened by the growing appeal of the idea of less state coercion in our lives. The more desperate I see statists in their actions, the more I believe they feel their backs to the wall, their power threatened.
I am grateful to all of those whose personal examples have kept me from succumbing to skepticism and cynicism, that although to some degree necessary to survive in this world, can spoil the joy and laughter that an understanding of freedom brings. This is the balance that is difficult to maintain, I think.
In the arena of ideas, no one manages this better than Lew Rockwell, founder of the Ludwig von Mises Institute. Look at his picture on google. He is always smiling! He is funny, all the while having few peers as a hard hitting writer. During the few times I have been around him, everyone around him was laughing. I never met Murray Rothbard, but I understand that he had the same sort of influence on everyone in the room. He was, quite simply, hilarious, but as brilliant and incisive as any scholar of his time.
I suppose I am giving this advice as much to myself as to anyone reading this. Focus on the presence of liberty as much or more than you do on the suffering caused by its absence. The cause of liberty is always good news for those who wish to be free.
G. Keith Smith, M.D.
Jim Epstein, writer and producer of the Reason Magazine video mini-documentary featuring our facility, has written a new blockbuster piece you can read here. He once again uses our facility as an example of free-market healthcare delivery. There are many links to important information in the article. One is to our new friends at “SnapHealth,” run by the emergency room physician and entrepreneur, Dr. David Wong from Houston. Another links to Dr. Eric Bricker’s Dallas-based company, “Compass Healthcare,” another powerful force bringing much-needed price transparency to medicine, all the while promoting the consumerism that more than anything will cause the price of healthcare to plummet.
Jim Epstein was one of the first to see through Steven Brill’s TIME magazine piece as a corporate pitch for single payer. He reponded to Bricker in just the way you would think a writer from the libertarian Reason Foundation would respond. His response to Brill is here. Many thanks to Jim and the Reason Foundation for getting the word out on the workability and applicability of free markets to the healthcare industry. Their work has been and will continue to be without a doubt, vital.
G. Keith Smith, M.D.
Years ago, I hired a carpenter to build a deck in my backyard. This scraggly guy showed up with a pencil behind his ear, a spiral notebook and a tape measure. I told him what I was looking for, what kind of wood and how big I wanted it to be. He made two or three suggestions, we agreed and then he went to work measuring and taking notes. Fifteen minutes later, he handed me a piece of paper with how much it would cost. Then he was gone.
In two days, he called me and said he would like a payment for the lumber and told me how much it was. I sent it to him. Five days later, he showed up with the lumber-already cut. This guy knew what he was doing.
At the time, it blew my mind that he showed up with all of the lumber already cut, ready to assemble/nail. As I look back, I realize that this man, like so many others in a true market economy, did the most amazing thing, the very same thing we have done at our surgery center and what so many hospitals say is impossible: he gave me an up front price.
Now you want to say, “Smith! Building a deck isn’t surgery.” Contractors like this man, however, have run into unanticipated problems that make certain jobs more difficult than others. Experienced contractors anticipate these future problems when evaluating a potential job, factoring this into their price. Most of the time they get it right. Sometimes they get it wrong. If their error rate isn’t factored into their price, they go broke. If their error rate is low, they are able to be much more competitive in the marketplace.
I think of this carpenter often. I certainly had him in mind when I formulated our internet pricing. I knew that some cases would be more difficult than others. I knew that we would probably lose on some and make a little better marginal profit on others. This is what all businessmen do every day in every sector of the economy-except healthcare, it seems.
Eleven years ago, we began construction of the large facility in which we now work in Oklahoma City. The general contractor and the architect gave us a number. Not an estimate. A number. They had factored in to their calculation variables that could represent setbacks, still allowing for a reasonable marginal profit. I had been providing occasional prices for the uninsured and poor having surgery for years by this point, but found the contractor’s confidence in what our new facility would cost, fascinating and incredible.
When I think about the number of times I have heard the hospital folks say that fixed, upfront pricing in health care is impossible, I think about these builders/contractors. I think about my carpenter. Having provided transparent pricing to surgical patients, I have found that in some cases I was wrong. In some cases I was too high, in some cases I was too low. Adjustments were made. Not at the expense of the patient, though.
Transparent pricing is necessary for any concept of value to have meaning. Transparent pricing is necessary in order for appropriate signals concerning scarcity or abundance/surplus to have meaning. Non-transparent pricing is a hallmark of command economies, as Professor Robert Higgs explains in his brilliant book, “Crisis and Leviathan,” one which I highly recommend. There can simply be no meaningful competition when the prices aren’t transparent and known up front.
Not all medical facilities need to exhibit transparent pricing in order for a competitive and market economy to emerge in health care. Indeed, our internet pricing has allowed individuals to leverage their local medical facilities, as otherwise they would have gladly jumped on a plane and come to us for surgical care, the price for which was quantifiable. In spite of big hospitals’ attempts to denigrate this idea, they have found themselves in a competitive environment, whether they like it or not. Whether patients are willing to fly to Costa Rica, New Delhi or Oklahoma City, they have a price in mind and the local hospitals are shoved against the wall with this pricing, forced to explain why they are ten times more expensive while simultaneously claiming to not make a profit. In the absence of any evidence that they are ten times better, their position (6-10 times more expensive) is a weak one.
In Oklahoma City, upfront pricing is available at our facility and several others. A group of gastroenterologists, a group of oncologists, a group of radiologists with a breast imaging center, a group of cardiologists and cardiac surgeons with a physician-controlled heart hospitals, a group of orthopedic surgeons-they all have their pricing configured. A tertiary hospital has recently joined in this effort, providing upfront pricing for inpatient procedures too complex to complete at our facility. This is a very exciting development.
Since hospitals are responsible for the vast majority of medical costs in this country, slashing these outrageous charges brings incredible savings without even touching physician pay. Since we own our facility, we are content with solid fees for our professional services with no desire to plunder and bankrupt our patients with gigantic facility fees, unlike the so-called “not for profit” hospitals. We actually act more like a “not for profit” entity than those claiming this tax-free status.
Hospitals and their shills who claim that up front pricing can’t be done, know that it can be done. They just don’t like what that means for them. They want to work on a “time and materials” basis, a recipe for waste and inefficiency, as waste and fraud generate more revenue with this model’s lack of accountability. The more materials used (with their outrageous mark-ups) the more they make. Forcing medical facilities to be transparent with legislation is a mistake, I believe, as this is a violation of the “non-aggression principle” and also will more than likely provide legislators the opportunity to sell exemptions, with little or no transparency resulting. With the movement for medical price transparency on a roll now, better, I think, to let the much more unforgiving market deal with those who refuse to be transparent. Those who won’t divulge prices will lose out to those who will.
At The Surgery Center of Oklahoma we will continue to advocate a free market in medicine, one that’s possible only when accompanied with and characterized by transparent pricing. We will continue to encourage and recruit others to join us in this effort, one that will likely bring such significant health care price deflation, that the “crisis” the government is attempting to create in order to usher in single payer, will be delayed indefinitely if not thwarted completely.
As I told someone recently, “..the genie is out of the bottle. Price transparency is here and here to stay, whether the government or the health cartel they have created like it or not.” My partners and I are proud to have played a role in the transparency effort, one which we believe will bring price sanity to surgical care in particular, but ultimately to the pricing for all medical care.
G. Keith Smith, M.D.
Here is an article that will take you a while to read. Seriously, put aside 20 minutes for this one. Find a folder on your computer to save this, as you may want to refer to it down the road. The author has basically outed the “not-for-profit” hospitals for what they are: medical mercenaries. Outrageous charges, CEO salaries, you name it. If you don’t want to take a lot of time reading this, skip to pages 3, 4 and 5. Oklahoma City’s very own Mercy Hospital is mentioned as a price abuser! The author gives all the gory billing details of an $87,000 outpatient visit to Mercy (less), including padding an implantable device by $30,000, an move that seems contrary to their stated mission (also quoted in the article on page 5): ”..to carry out the healing ministry of Jesus by promoting health and wellness.” Oh. And bankruptcy. Mercy’s $4.28 billion in 2011 revenue is revealed in this article.
Hospital CEO’s who have ownership interests or board positions on pharmaceutical companies with which they do business-that’s in this article, too. $4,000,000 administrators and their flunky VP’s making only slightly less-it’s all there.
I am disappointed, however, that there is no mention of the uncompensated care scam or repricing tricks that bring in billions and one of the main reasons hospitals start with their “chargemaster” rates. I also don’t understand the timing of this article. Readers of this blog know that this information has been out there for a long time. The most glaring deficiency of the article is the lack of any blame-placing on good old Uncle Sam, the architect of the current mess, creating a corporatist environment in which the favored cronies like these giant hospital systems can do exactly what this author aims to expose. In fact, he reserves his highest praise for a Medicare bureaucrat named Diane Kovach!
Mainstream media, Time included, ran articles during the Obamacare debate centered on getting everyone “coverage.” The Lamborghini prices the hospitals were charging and why they were doing this never got any attention. While the big media spoke about the high price of care, there was never any mention of what we all knew: Obamacare would serve to cause a further skyrocketing of prices (I believe this is intentional as readers of this blog well know).
Just before he almost ruins the entire article with his “fixes” for health care’s high costs, and right after he brags on the efficiency of Medicare!, he says this:
“Put simply the (hospital) bills tell us that this is not about interfering in a free market. It’s about facing the reality that our largest consumer product by far-one fifth of our economy-does not operate in a free market.”
The author’s remedies are just what you would expect from mainstream media, appealing to more government and taxes, price controls, mandating more of this and more of that, but never harnessing the immense power of market forces. He also gives the usual lip service to the “good” parts of Obamacare….yuk. The article seems schizophrenic at this point. I honestly didn’t know what was coming next, perhaps a mention of our free market facility!? Yikes.
Hats off to to Gilberto A. Rodriguez Campbell for passing this along. This is a massive article, a data gold mine that confirms everything you have read on this blog about these so-called “not for profit” hospitals. Don’t let the statist flavor of certain parts of this expose (particularly the end) ruin it for you.
G. Keith Smith, M.D.