G. Keith Smith, M.D.

Here’s an interesting little article from the New York Times sent to me from Steve Gonzalez at PokitDok.com.  You would think that a first rate paper like this would look into why a total hip replacement is $12,000 at one facility and $125,000 at another.  You might even think that someone would raise issues about whether making sure that everyone had “coverage” was appropriate before dealing with the actual price or cost of care.  You would think so, but that would only be so if the architects of Obamacare cared a lick about how much health care was costing folks.  They didn’t and they don’t.  

Price transparency, you see, is a disaster for those who benefit from its absence in the health marketplace, exposing the “repricer” schemes, the uncompensated care scam and all the other non-transparent activities that serve to make so many in corporate health rich.  Many of these special interests buy lots of expensive advertising in the major media outlets, essentially insulating them from any true journalism.  I suppose the folks at the “Times” can sleep better for just having raised the issue.

G. Keith Smith, M.D.

There is more insight to glean from the Phoenix scorpion story.  Imagine that this poor patient went to a hospital that her personal physician owned.   How would things be different if this woman’s personal physician were taking care of her in an emergency room he owned?  You think that this greedy doctor would take her for all she was worth?  Or, as her personal physician and advocate, would he bear some additional responsibility for her financial well-being.  Not discussing the cost of the anti-venom would represent a betrayal of this patient-doctor relationship, would it not?  

In addition, the outrageous profit-seeking of the “not for profit” hospital would be mostly absent, as this doctor could not in good conscience financially abuse this patient in his hospital any more than he could in his own office.  He would be happy to just recover his cost on this drug.  He would be really happy that she didn’t go to the Chandler Regional Medical Center, an outfit that he knew would bankrupt her. Contrary to what the goons at the American Hospital Association and their lobbyists would have you believe, physician-owned facilities are bargains compared to their “not for profit” competitors across town.

But in all likelihood, the insurance company that paid the hospital $57000 wouldn’t “contract” with this physician-owned hospital.  They would be “out of network.”  Why?  Because the insurance company makes more with the hospitals that charge the most!  This is so important to understand.  Most of the insurance company’s money comes from money management and “repricing” fees, not from premiums, according to several insiders I have talked with.  

The doctor that recommended and administered this antivenom in Phoenix didn’t work for the patient, though.  The lack of any patient-doctor relationship results in a lack of accountability of the doctor to the patient, medically and financially.  This emergency room physician is not likely to ever see this patient again.  Some emergency physician groups labor under performance contracts with these mercenary hospitals where their compensation directly reflects the extent to which the hospital has profited from their efforts.  These arrangements guarantee almost unlimited and unnecessary testing and expensive drug administration like the Phoenix case.  

It is also important to understand that the giant hospital gets paid even when it doesn’t get paid.  Overcharging the poor and inflicting exaggerated bills on the sick inflate the uncompensated care claim by these outfits, and that’s just what they do.  This pads the pockets of their insurance friends who ride in to the rescue and “mark down” the bills, hoping no one realizes they skim 35% of the marked-down amount.  

Now that you know this, wouldn’t it be a great idea to put these giant hospitals in charge of all of the care in the country?  Well, that’s exactly what the Unaffordable Care Act calls for!  Beginning in 2014, Medicare payments will go to the big hospital systems and they will dole out the money to the doctors.  No more trustworthy and charitable bunch than the “not for profit” administrators!  

Maybe a black market for scorpion anti-venom will develop.  The FDA’s granting exclusive distribution rights for seven years to the company distributing this drug is sort of like prohibition.  The same drug for $100 could be purchased over the counter in Juarez or Nogales and sold at an anti-venom kiosk outside of the emergency rooms all over Arizona were it not for the wonderful “deal” the FDA struck with the Tennessee fellows.  

The only thing worse than total corporate control or total government control of medicine is these two syndicates together.  This episode in Phoenix is a window in to understanding the control the cartel has over health care in this country.

G. Keith Smith, M.D.

A woman recently received treatment for a scorpion sting in the Chandler Regional Medical Center emergency room in Phoenix and was billed $83,000, $80,000 of which was for the new anti-venom serum, Anascorp.  You can read the article about it here.  

If you are distracted by what her insurance paid and what she still owes and the “out of network” comment at the end, you need to pay more attention to this blog.  This is scandalous, but not because her “insurance” company didn’t pay enough on this claim.  Actually, part of the scandal is that the insurance paid as much as they did on this claim!  Let’s break it down.  

Chandler Regional Medical Center (if you guessed that they are “not for profit” you get a gold star) refused to disclose how much they paid for this new drug, prior to marking it up to $40,000 per dose.  Would it surprise you to find out that they paid $3750 for the drug? Actually, the patient received two doses, so they have $7500 in drug cost to recover.  So they marked the cost of the drug up 10 times.  Insurance paid a little over $50,000 and the hospital, needing another $25000 from the patient to not make a profit, is aggressively billing the patient.

Making sure that everyone has insurance is the answer?  So shake-down artists like this hospital can be guaranteed a great haul on every heist?  If you aren’t angry yet, read this link about what the drug costs in Mexico where it was developed and how Uncle Sam’s bringing the FDA to the table has driven up the cost.

Cui bono?  You know the drill by now.  Hospitals make a haul from patients who pay them.  Hospitals make a haul from patients who don’t pay them, too, through the uncompensated care scam.  They benefit the extent to which they claim they lost.  Like a reverse-Enron.  Their uncompensated care rebate is maximized to the extent that they claim they didn’t collect on bills.  Now you see why they price this drug so aggressively.  The hospitals also are raking in such huge profits that they need to claim ridiculous losses (gotta have ridiculous bills for this) to maintain the fiction of their “not for profit” status.  

Insurance companies?  Bills like this represent their excuse for driving up premiums every year.  Brokerages that sell insurance products receive commissions based on the amount of the premiums, so you know they are fighting their tears when they tell you about your higher rates next year.  Insurance companies will also “back charge” group insurance plans for “repricing” claims.  In this woman’s case, the insurance company will get a percentage of the amount they “saved” the group plan by reducing the hospital payment from $83,000 to $57,000.  Can you see now why the insurance company actually loves hospitals that charge like this?  One insider has told me that the majority of the insurance company profits come from this “repricing” scam, not from premium collection.

The FDA granted the exclusive distribution rights for this drug to a Tennessee company called “Rare Disease Therapeutics.”  Understand they don’t make this drug.  They distribute it.  Like beer.  How do you think they got this gig?  Thank you Uncle Sam!!

I have an idea.  Since the drug can be profitably sold in Mexico for $100, why don’t we directly import it and pay them $200?  That’s just not how we do things is it?  Not nearly enough “cui bono’s” when you do it this way, I guess.

G. Keith Smith, M.D.

I’m writing this from Washington D.C., just having experienced the TSA experience many have come to know and love.  The Association of American Physicians and Surgeons invited me to participate in a congressional briefing with Rep. Paul Broun, GA and I feel compelled to make a report. 

Very few in power here have shunned the influence peddling that seems to go along with the job.  Those who are principled seem a bit sad, much of their vigor gone with Justice Robert’s ruling..  Lost with Robert’s ruling was a real opportunity to roll back the commerce clause’s grip on states and on the federal overreach.  The likelihood that a court challenge will occur again in our lifetime presenting this opportunity is remote, according to one legislator speaking to me.  The beast of big government has the upper hand, like never before. 

The beast is bankrupt, however.  One libertarian congressional staffer told me openly that Medicare is going to vaporize whether this is politically palatable or not.  The money coming in doesn’t remotely cover the anticipated expenses by as early as 2017.  The implosion of this Ponzi scheme will be accelerated by the court’s decision to uphold the Unaffordable Care Act (UCA,) bringing fiscal insolvency to this program likely prior to 2017.  Any legislator in office when that happens is probably finished.  I found it interesting that there was more discussion about how to unwind or dissolve Medicare  and Medicaid than how to reform this ill-conceived entitlement program. 

The legislative “kick the can” approach, always leaving tough decisions and issues for the future legislators continues and will bring collapse and chaos to the medical arena and many others.  So many corporatists have bet their future on loot from Uncle Sam to fund their various market-unworthy scams.  These folks will soon be bankrupt and deservedly so.  Hopefully, more bailouts will be politically impossible and these companies will be reorganized and sold off, cleansing the marketplace of this mall-investment. 

What will happen after the government medical juggernaut hits bottom?  We will have to fiercely oppose any “top down” solution that does anything other than remove all federal interference.  I’ve come to some conclusions.  Health care is not a federal issue.  It is not a state issue.  It is not a government issue at all, at any level. Making health care a government problem makes one’s health, another’s liability and begs for control, rationing and euthanasia, ultimately.   

Health care is a service that physicians provide to patients utilizing whatever necessary resources are at their disposal to achieve the best outcome.  That ‘s it, isn’t it?  Anything that interferes with this process is the “issue.”  Robbing one individual for the health benefit of another is an “issue.”  Government created scams like PPO repricing and uncompensated care, two of the primary culprits of the high cost of medical care, are “issues.” 

Government has been the massive “issue,” interfering with the delivery of health care for several decades now and bringing us from a time when no one needed insurance to a time when even with insurance, bankruptcy is a reality for the sick.  Federal “solutions” to health care have focused on insurance coverage, rather than an examination of the true costs, an approach designed to distract attention from those profiting from the finance of health care while having nothing to do with its delivery. 

There are some glimmers of hope, though.   There is general acknowledgement that the high price of care is Washington’s fault.  There is a realization that the politicians must choose their path:  take the money or lose their power.   The collapse of government health care will be a rough political ride for those who are in office when it happens.  If for no other reason than preserving their own political fortunes, we might yet see a roll back, one that will occur in tiny, almost imperceptible bites, though. 

There are some good people in D.C.  Not very many though.   “The reason people think politics is dirty, is because it is dirty,” as Lew Rockwell has said.  I think this is why I always feel like I need a hot shower when I get back.

G.  Keith Smith, M.D.

From now on, I am going to refer to “not for profit” hospitals as “not show a profit” hospitals.   I believe that no other group deserves more blame for the disastrously expensive state of health care in this country than these big “not show a profit” hospitals.  They, of course, have an incredibly powerful lobby, the American Hospital Association, which has bribed sufficient players in D.C. to allow them to have their way with the sick.  I thought it might be useful to review their role to date.

These big hospitals were granted a concession of tax-free status when required to see all patients (that could pay or not) that came through their doors.  The value of this concession is incalculably huge and while sufficient to cover the costs of indigent care and finance hospital expansions, was nonetheless insufficient to slake the greed of those running these outfits.

The poor mouthing tactics of the “not show a profit” hospitals have gone on for some time but reached a fevered pitch in the mid to late ‘90’s when physician-owned specialty hospitals made their debut (my apologies to those physician-owned hospitals that predated this time).  “Doctor owners are cherry picking,” was their cry!  “They are leaving us with all of the patients who can’t pay,” they screamed.  Here in Oklahoma, a state-commissioned “Trauma Task Force,” was hijacked by these goons, using that vehicle to make an anti-competitive case against these new physician-owned facilities.  A libertarian-leaning legislator saw to it that I was put on this task force.  Here I learned first-hand the lengths to which these hospitals would go to avoid the competition that is present in every other sector of our economy.

All the while, the hospitals were lobbying for disproportionate funding from Medicare and Medicaid, compared to physician-owned facilities.  They prevailed and today if you have your knee replaced at a “not show a profit” hospital in Oklahoma City, Medicare will pay them twice what the physician-owned (and far superior) orthopedic hospital will be paid.  Those greedy doctors!  Summing this up, big hospitals successfully lobbied to be paid more, lobbied to have physician-owned facilities be paid less, screamed they were going broke and accused the greedy doctors of cherry picking. 

Let’s keep going.  Unsatisfied with their tax-free status and disproportionate government payments, the hospitals pulled off their ultimate heist:  the uncompensated care scam.  Declaring any amount of their bill which they did not collect, “charitable care,” they managed to secure even higher Medicare and Medicaid funding based on this fiction.   Uncle Sam provides DSH (disproportionate share hospital) payments to hospitals based on the amount they claim they didn’t collect.  This incentivized the hospitals to produce the most outrageously fictitious bills they could, as this padded their DSH payments.  This “uncollected” amount also helped maintain the fiction of their “not for profit” status.  The more hospitals “lost”, the more they made, kind of a reverse-Enron, overstating losses instead of gains.

(Insurance companies discovered that they could “sell” their services to “re-price” these false bills and make billions in this way.  I have discussed the mechanics of this in prior posts.  Let’s stay on these hospitals, though.)

Still not satisfied and continuing the poor mouthing lie, hospitals justified their outrageous bills by saying that they were going broke from all of the “charity” care they were delivering.  You can see now that they were being paid for this “charity” care by the taxpayer even if the patient wasn’t paying them.  The hospitals began more aggressively  “shifting the costs” to those who were paying their bills, even though there were no costs to shift. 

(Insurance companies were drowning in their champagne as they saw this as this gave them justification for raising premiums and padded their “re-pricing” profits.)

Think I’m wrong?  Look at the building cranes in front of these large hospitals.  The largest crane I’ve ever seen is in front of St. Francis Hospital in Tulsa as I write this.  The Catholic Hospital Association, of which they are a member, pushed hard for the Unaffordable Care Act, as they stand to make money like never before, getting paid by “insurance” while continuing their uncompensated care scam.

Look at the devastation of rural hospitals inflicted by the big hospitals.  First the giant hospitals buy all of the doctors in town, turning them into referral tools, requiring that they transport every patient they can to the mother ship, then they buy the rural hospitals in a hostile takeover, having bankrupted them with this scheme.  

One Catholic hospital system has made so much money with the above schemes that they simply can’t figure out what to do with all of it.  So they set up a separate supply-purchasing company that after procuring goods for their hospitals, marks it up to themselves, allowing them to dump unlimited profits from their “not show a profit” mother ship.  

I suppose I should mention that the administrators of these facilities make millions of dollars every year.  The head of the Catholic Hospital Association (a nun) makes 1 million dollars a year!  That’s a bunch of cash to cram in her habit. 

That vulnerable and sick people have been bankrupted by these criminals, makes me mad.  They couldn’t have done it without the willing assistance of our friends in Washington, D.C., however, the same folks who have brought us the Unaffordable Care Act.  State governments bear much of the blame, as well, as powerful state hospital associations have showered local legislators with enough dough to shut out the hospitals’ would-be competitors.

Out of one side of the legislator’s mouth, we hear about “access issues” and the “high cost of health care.”  Out of the other, they say to their hospital buds, “…thanks for the check.  I’ll see to it that no other facilities open to make you price-competitive.” “I’ll tell the voters it’s for their safety and that we need to protect the integrity of our hospital systems so you’ll be there when we need you.”

G. Keith Smith, M.D.

Here is a video of part of my latest excursion to the swamp, our nation’s capital.  There are a few good people up there, but not many.  I begin about 20 minutes in to the video and answer a question at the end. 

G. Keith Smith, M.D.

The socialist editorialist Clarence Page has called the GOP out, Mitch McConnell, in particular, for not having a replacement plan for Obamacare if they can manage to repeal it.  This very short-lived interlude, void of any more health care ideas from Washington, is kind of nice.  I’m sure the GOP will spoil the silence, though.  Seriously, what on earth would lead someone to believe that any answer coming from Washington wouldn’t be designed to line the pockets of the special interests at the table writing the bill? 

I’m all about repeal.  But let’s not stop with Obamacare.  Let’s move on to many disastrous legislative interventions brought to us from the other side of the aisle.  How about Medicare Part D, brought to us by a GOP-led executive?  Why didn’t the GOP change the tax code to end the discrimination against individual purchases of health insurance during the time they had all the power?  Hint:  see paragraph one of this blog.  This tax reform isn’t likely as the shift away from employer-purchased plans will gut the scam of PPO repricing, a devastating blow to the big insurance companies. 

Remember how “repricing” works.  My apologies to loyal followers of this blog for repeating this, but it is important…I’ll have something new at the end.  Insurance companies are perversely rewarded by seeking out the most expensive “providers” they can find.  They subsequently “reprice” a bill of $100,000 to perhaps $28,000 and charge the employer plan a fee percentage to the extent that they have “saved” them this $72,000.  Hospitals gladly produce these bills for their pals, as they can write the fictitious loss off as “uncompensated care” and bill Uncle Sam for a percentage of this number.  Insurance companies agree to lock out certain competitors to garner the hospitals’ participation in this little scam. 

Insurance companies make more money doing this than they do from premium collection!  This money isn’t included in the calculation of the new MLR (medical loss ratio) requirements of the UCA (Unaffordable Care Act).  This MLR only applies to premiums collected.  Beginning to see why the big insurance companies wrote the bill this way?  Administrative fees and PPO access fees are also not included in the MLR calculations. 

Changing the tax code ends this scam.  Individual policies (as opposed to group or employer-sponsored policies) are not subjected to “repricing” fees.  You will know that the GOP is furious with the insurance companies when this tax reform passes.  If the GOP threatens to pass it, then doesn’t, you will know that they did this to raise money from the insurance companies as extortion. 

What would the reaction of the average working person be to the following from the GOP:   “We aren’t advocating a replacement plan because this government is so completely compromised, corrupt and incompetent that something as important as health care can’t be trusted to it.  We are going to fade back and punt this to the states and let them unwind the insanity we have thrust on everyone in the country.  Our gift to you is to remove ourselves from this issue entirely, rather than continue to sell our influence at your expense.” 

I know.  It will never happen.  Fun to think about, though.

G. Keith Smith, M.D.

One of the tragedies of the debate on health care that led up to the Unaffordable Care Act (UCA) was the lack of any serious discussion about the justification of the high cost of care.  Hint:  it isn’t justified.  The careful avoidance of this topic was intentional, as any realization of the availability of high quality surgical care at 1/5th-1/10th of the price at a “not for profit” hospital, for instance, would have taken a large amount of steam out of the argument that “everyone needs health insurance.”  Someone might have said, “Whoa!  Let’s take a few deep breaths before we insure everyone based on Lamborghini prices.”  That would have spoiled the plans for BCHIP (big computer, hospital, insurance and pharma), the players that wrote this bill.

Why do hospitals charge so much?  ”Because they take care of so many indigent patients and must maintain an emergency room,” most would say.  Answer me this:  why is there a construction crane in front of almost every emergency room at large hospitals in the U.S.? Would you build on to a part of your business that was bankrupting you?  ”Not for profit” hospitals don’t pay tax.  The value of this concession far outweighs the value of any indigent care they deliver.  Seriously, what is the additional marginal cost of treating an indigent patient in an emergency room that is already staffed and open?  

There’s more.  Much more.  Hospitals charge gigantic amounts to intentionally rack up points in the “Uncompensated Care” scam.  ”Uncompensated Care” is simply hospital bill charges minus their collections.  Hospitals claim they supplied care equal to this number for which they weren’t paid and submit that to Uncle Sam.  Taxpayers reward them for their “charity” with padded Medicare and Medicaid payments called DSH (disproportionate share hospital) payments.  This means that hospitals get paid even when they don’t get paid.  This means that hospitals are perversely inclined to charge the most to those who have the least, as this difference will significantly contribute to their DSH account.  

Sorry, there’s more.  The extent to which hospitals don’t collect on their charges, actually helps them maintain the fiction of their “not for profit” status.  This means that they probably need all of the “non-payers” in their emergency room they can get, as billions in the black require false billions in the red.  Building campaigns are another way to dump massive profits, and we have seen hospitals building satellites, clinics and buying out competitors.  They also dump profits by engaging in hostile takeovers of physician practices, paying with money they can’t afford to keep.  Here’s a new one.  One hospital I know of formed a buying group company for their supplies, which marks up the price sold to their own fleet of hospitals.  This ingenious strategy is yet another way  hospitals can dump massive profits by overpaying for their own supplies.  You didn’t think they would pass any savings realized from forming a large buying group to the patient did you?

Now the shocking part.  What if I told you that the higher the hospital bill, the more the insurance companies make?!  The “repricing” of claims is the reason and it works this way.  An insurance company pays $10,000 on a hospital bill of $25,000.  The insurance company then charges the employer insurance group a percentage of the “savings.”  They make more by doing this than they do on the premiums they charge.  This is the primary reason that no politician on either side of the aisle will advocate a change in the tax code that currently discriminates against individual purchases of health insurance in favor of business purchases.  This gift to the insurance companies enables their  ”repricing” profiteering, the termination of which would have a devastating effect on the fundraising efforts with the big insurance companies.

The more hospitals charge, the more the insurance companies make.  The more the hospitals “lose,” the more they take from the taxpayers in DSH payments.  It took me a long time to figure this out, but as a physician and managing partner of a surgery center it never made sense to me why insurance companies didn’t want to make sure patients they insured came to my facility, where the quality is as good or better and the prices are a fraction of what they are charged by the hospitals.  This didn’t happen overnight.  Politicians competing with each other for the political contributions of the insurance companies have bestowed these gifts to their contributors over the years.  Nothing has changed, except the democrats are now the party of big insurance.  Did you see what the court’s decision did to the BCHIP stocks?

The UCA will drive the costs of insurance and medical care through the roof.  Maybe this will finally result in an examination of the costs and the perverse incentives in this distorted marketplace.  

And you thought it was the greedy doctors that were responsible for the high price of care.  

G. Keith Smith, M.D.

A new legislator in D.C. once told me that our government was run on relationships.  He told me that he had coached himself to say, “I like you, but don’t like your bill,” when asked to sign on to theft, Washington-style.  Stiff-arming legislative colleagues was much more difficult than shunning lobbyist’s bribes.  Having said that, however, do you think the GOP is surprised by the big insurance/hospital/pharma industry, long their political bedfellows, betraying them?  Are the members of the GOP thinking, “..after all we have done for you through the years and you have defected to the democrat party?”  Their favorite crony capitalists have “gone dark,” after all.  I hope that’s what they are thinking, as retaliation is a possibility.

Only time will tell, but I think there is a more likely scenario.  Out of one side of their mouth, the Republicans told us what a horrible piece of legislation the UCA (unaffordable care act) was, while with the other side, they were telling their old pals in the BIHP (big insurance/hospital/pharma) cartel that they knew this bill would be good for their business and understood their following a path that would make these companies unfathomably rich.  The GOP was counting on having it both ways.  The court’s ruling messed it all up.  As Yoda would say,”gambled and lost they did.”  Could I be right?  Doesn’t it make sense that they would follow a path that wouldn’t alienate their old pals so when the power shifts they’re back in business? 

I hope I’m wrong.  You see, if the GOP meant it when their members said this was an abomination, their anger at this betrayal could take many forms.  Legislation to change the tax code which discriminates against the individual purchase of health insurance would be a start.  This gift given to the insurance companies by the GOP and maintained by them through the years(in spite of countless studies by think tanks showing how eliminating this would do more to help people with access to care issues than any other single act) is essential to maintain the obscene profiteering by these companies. 

PPO claims repricing would almost disappear with tax fairness.  Remember the PPO repricing scam?  This is where insurance companies charge employer plans a percentage of the money they have “saved” them by repricing claims.  A $20,000 claim/bill from a hospital gets “repriced” to $8000 and the white knight insurance company charges the employer plan a percentage of the fictitious “savings.”  This provides a perverse incentive for the insurance company to select the most expensive facilities for the “network!” This scam disappears when individuals buy insurance, rather than have their employers buy it for them.  This tax change, if the GOP would entertain it, would bring the cartel to their knees.  If this doesn’t happen, you’ll know that it’s probably more business as usual in D.C., I’m afraid.

G. Keith Smith, M.D.

P.S. Uh oh.  Just now, Rep. Tom Price, GA, was explaining on Fox News that the GOP would keep all of the popular parts of the UCA in any repeal effort.  Oops.  It’s looking like I’m right.

Several people sent me the same two articles this week to read and blog about.  You can read them here and here.  Both articles have one thing in common.  Pricing in health care makes no sense.  The first article from Consumer Reports was written by someone who doesn’t understand the genesis of the health cartel and how the schizophrenic pricing has evolved to benefit those who set it up.  There is money to be made with all of this uncertainty.  After all, once folks know that they can get a CT scan for under $500 and virtually every surgery we do at our facility for under $10,000 (see our pricing page at www.surgerycenterok.com) they might be less susceptible to the fear necessary to purchase these silly insurance products.  Actually, these products, like HMO’s, are so ridiculous that no one would buy these on their own.  Employers buy these products because they are cheap (cheap because they won’t get you much) and so they can say they are providing a health benefit.  I also fault the Consumer Reports article as granting an undeserved legitimacy to Medicare pricing.  Medicare pricing is arbitrary and meaningless, just what you would expect from a power-drunk D.C. bureaucrat.

Why don’t the prices make sense in health care?  Because the market has been thwarted at every turn by our friends in D.C. and their pals in the insurance and big hospital industry.  Remember the concept of PPO repricing, where insurance companies receive a fee for the extent to which they “reduce” a large health bill, an arrangement that perversely inclines the insurers to seek out the most expensive hospitals?! Remember the uncompensated care scam where hospitals actually maximize their profits to the extent that they report losses?!   Of course the pricing doesn’t make sense because it is not rational and transparent.  Once markets are allowed to work (which means less government involvement, not more) prices will begin to make sense, conveying the important buy/sell signals like they do in other areas of the economy.  

In mid-March I wrote a blog about a $4400 CT scan here in Oklahoma City, the same scan done by a physician-owned facility for $800.  You can read it here.  This same “not for profit” hospital jacked up the price of the contrast dye from $19 to $643, about a 3300% markup!  The physician-owned facility isn’t in any insurance networks.  They aren’t more expensive, they are less expensive.  Insurance companies won’t contract with them in spite of this.  What gives?  This is no accident.

Price transparency like that exhibited by our facility will break the back of the health cartel, a racket that has used this price uncertainty for wild profiteering, all at the expense of the sick.  Maybe these two articles will help more people ask questions about pricing.  Displaying our prices has brought us countless uninsured patients, patients with high deductibles, Canadians and increasingly, patients covered by self-funded employer plans.  We welcome others who would join us in this effort.

G. Keith Smith, M.D.