I blog about free markets in medical care and transparent pricing.
I told you I wasn’t done with Marty Makary, author of “Unaccountable: What Hospitals Won’t Tell You and How Transparency Can Revolutionize Health Care.” I am flogging away at him because I have predicted that his book will be used by the usual suspects in D.C. and at the usual think tanks as the gospel-truth. Here is another quote from his book:
“The singer Kanye West’s mother recently went to a surgery center for a routine plastic surgery, developed a rare complication, and died. In the case of West’s mother, her surgery took place in a freestanding surgery center where there was no adjacent hospital to handle emergencies. This is now a common scenario. Patients don’t know and aren’t told, that if something goes wrong, they are going to be up a proverbial creek without a paddle. When the day comes for me to have an outpatient procedure under general anesthesia, I’ll do it at an outpatient surgery center connected to a hospital. Thirty-eight percent of outpatient procedures are done today from ambulatory surgery centers with no adjacent hospital. No matter how good the doctors are, that’s a less safe place to be.”
Let’s break this down. Never mind that up to this point in his book he has devastated hospitals as actually benefitting financially from the complications they create. Never mind that he has demonstrated without any doubt by this point in the book that quality in any given hospital is sporadic and unpredictable. Never mind that he is a pancreatic cancer surgeon and has no clue what working conditions are in an outpatient surgery center. This point is particularly stinging in that he has eviscerated Dr. DeBakey for stepping outside of his field of expertise to operate on the Shah of Iran.
This baseless and biased broad stroke judgement is odd and hypocritical coming from an academic surgeon, but not atypical. For all the talk of being a scientist, his emotional and envious side apparently rules him. Having authored over a hundred peer reviewed scientific articles you would think that Dr. Makary would have the ability to objectively look at the facts and statistics, particularly in a book where he is cajoling the reader to ask questions and search for the facts, facts many times hidden from view.
“What is the likelihood of acquiring a serious infection in a free-standing outpatient surgery center as opposed to one operated by a hospital?” ”What is the likelihood of unanticipated death under the same circumstances?” ”What is the likelihood of unanticipated hospital admission following surgery in a free standing as opposed to a hospital ambulatory surgery center?” ”What is the nurse to patient ratio in a free standing outpatient surgery center as opposed to one operated by and in conjunction with a hospital?”
Why didn’t he go over any of this? Because he is an academic surgeon with the usual biases and blinders that go along with a job like this. Why is this so bothersome? Because he gives lip service to the free market. Suffice it to say that he is as objective about the free market as he is about free standing outpatient surgery centers. He is, in my opinion, less qualified to talk about the free market than Dr. Debakey (a cardiac surgeon) was to operate on the Shan of Iran’s spleen.
Remember the scene in Rodney Dangerfield’s “Back to School” where the business-savy Dangerfield corrects the business teacher on all of the details he’d left out when considering a business plan, like the political payoffs to politicians and various inspectors and union negotiations? I would encourage you to think of Makary in this way, as a teacher. Well-meaning, somewhat effective in his field, but using what credibility his actual skill set has given him to step into an area where he is actually clueless!
I have seen many doctors do this. They must be smart. They are doctors, after all! Having conquered medical school, don’t they have the brains to give everyone else investment advice?
As the medical director of a free standing outpatient surgery center, I can tell you that Dr. Makary is flinging his opinion in this area whereas, on the contrary, in his discussion of hospital quality he relies on facts. I found his comments very disappointing here as they were possibly a window into his biased rather than objective and scientific mind. Again, another lost opportunity.
G. Keith Smith, M.D.
I first heard of Dr. Marty Makary one year ago while visiting with a congressional staffer. The staffer referred to Makary as Mr. Transparency and had a book coming out in which he was going to include devastating comments about hospital care.
I just finished his book, “Unaccountable: What Hospitals Won’t Tell You and How Transparency Can Revolutionize Health Care.” Suffice it to say that Dr. Makary is a salaried academician who has written a book on quality transparency, while extolling the virtues of the “free market.” I am going to blog extensively about his book (easily read in one evening) for several reasons. Part of what he has written is insightful and useful. I will comment on that and why I think some of what he has pointed out is important.
I will focus primarily on the outrageous shortcomings of his book, however. My extreme criticism of his book comes from his incredible inconsistency, his lack of understanding of anything having to do with the “free market” and this final point. Having declared himself a judge of quality, he has (probably successfully) established himself as one whose “stamp of approval” many will now seek. I have seen physicians take this “now that I have declared my own wisdom and greatness by pointing out other’s failures, it must be so,” approach in their practices and am afraid that is what we are seeing here. He will make a lot of money on this book and will be highly sought after as a quality guru, having declared himself to be a medical judge of all things, I predict.
I’ll dissect his book from the beginning and show where he adds to the current debate and where I think he falls shockingly short. I’ll leave you with this: he never mentions overcharging hospitals or price transparency in his entire book. I’ll get after this book with my next blog.
G. Keith Smith, M.D.
I received an interview request from a local television station recently, asking for my response to this article. The article from the Associated Press deserves some comment. First I must mention that the report, issued by the “Institute of Medicine,” an arm of the “National Academy of Sciences” is reported as an independent organization that advises the government. I guess they’re independent unless you call 85% federal funding an impediment to their independence. Virtually all of the rest comes from state governments.
Remember “whose bread I eat his song I’ll sing.” This report lays the groundwork for physician pay cuts, in line with what the current administration has in mind with their Independent (there’s that word again!) Payment Advisory Board (IPAB). At the top of the list of waste were “unnecessary services.” Also on the list were “inflated prices” “prevention failures” and “fraud.” Any or all of these claims could be used against physicians and will be, I predict. After all, who is going to challenge the “National Academy of Sciences,” this “independent” bunch of objective “scientists?”
This group, by the way, has been paid well by the federal government to find that global warming should allow governments to tax us more. Shocking.
Actually, the report is partially correct. While the report claims that 30 cents of every dollar is wasted, I believe this is probably too low. We perform surgeries for 1/6 to 1/10 that charged across town at a “not for profit” hospital. The fees we have listed on our website are half what Medicare pays the same hospital across town for the same surgery. You are being told that Medicare is going broke while surgical care at half the amount Medicare is paying is present in the same city! That’s 50% savings not 30% using my math.
Guess what they don’t mention in their report? Claims repricing and the disproportionate share hospital program, better known to readers of this blog as the uncompensated care scheme. While they do mention “excess administrative costs,” I don’t think they are targeting the multi-million dollar hospital administrators here.
They do mention unnecessary colonoscopies. At $600 each, how do you think this compares to the multi billion dollar repricing scheme? Or the uncompensated care scheme, the continuance of which is certain, even after everyone has been mandated to have insurance!
The report stresses “leveraging technology” and “improving coordination.” This is a justification for the swindle the Health Information Technology industry has pulled off in this country, basically giving them cover. There is a limited market for electronic medical record technology, but the government shoved it down everyone’s throat, threatening anyone who didn’t buy this technology with severe Medicare pay cuts. How would you like to produce a product the purchase of which was mandated by the federal government? Sound like a money maker?
The most ominous part of their report, however, is “payment reforms to reward quality results.” This “pay for performance” guarantees that the sickest patients, those most likely to have poor outcomes in spite of the best care, will be shunned by medical professionals, operating under the threat of pay cuts if these patients don’t do well. You naysayers out there are screaming, “there will be adjustments for severity of illness!” You keep thinking that. Keep believing that and all the other promises made to physicians by government bureaucrats.
There is a solution. We must, however, first recognize the problem. Wherever government exists, the free market is crowded out if not completely eliminated. Government operations are characterized by waste, fraud and corruption. Health care, to the extent the free market has been shoved aside by Uncle Sam, is characterized by waste, fraud and corruption. The idea that the government has any solution to health care other than to remove itself from the equation is ludicrous in my opinion. The report from the Institute for Medicine simply gives cover to even more government intrusion. We shouldn’t be surprised by their findings and recommendations when we think about the source of the report’s funding.
G. Keith Smith, M.D.
This article is worth reading. Now I’ll tell you why. Notice what is not there. Got it? No? Market competition. Transparency. Less government intervention. Addressing uncompensated care. Abuses by not-for-profit hospitals. Sending the management of these Ponzi schemes back to the states where they can be dismantled. Didn’t see those did you? I’ve been in meetings like this. Lot’s of very educated, very articulate people saying almost nothing, their statements shrouded in the most eloquent prose. Very impressive. Guess what? These folks don’t know crap. Oh yeah. The author is up on his stats. In meetings like this if you ask a pointed question, you get the look. You know, that look where someone is busted, totally outed as a fraud, but they have the presence of mind to go on the offense and look at you as if you deserve some charity from them as your comment betrays your ignorance of the massive factual databank they are called to command.
This is what health care policy meetings in Washington D.C. are like. Woe to he or she who mentions some principle of constitutionality or liberty. Woe to he or she who dares bring up the sanctity of the doctor patient relationship.
One conclusion I’ve come to over the years is that in most cases, disagreements between people are not a difference of beliefs, but a difference of facts. Different people subscribe to different sets of facts. But facts are facts. Thomas Sowell once told someone in a debate that they were entitled to their own opinion, but not their own facts. I think this is why lawyers agree to certain facts or principles prior to trial. Certain points or facts are not disputed by either side. This is the common ground that must be established prior to any sort of argument on the finer points.
So many assumptions have already been made by the people in the room at the meeting described in the attached article that beg an argument. To question the premises of the folks in the room sends a message to them that this meeting is going to take 39 hours not the 1 hour allotted. ”But health care is not a right!” Can you imagine saying that in the meeting that produced these conclusive questions? ”Why don’t we suggest (not require) facilities to post their prices and let market competition do the work of lowering the price of health care?” You won’t be invited back.
That’s the goal, isn’t it? To be invited back. To be a respected, sought-after authority in your field. Mustn’t marginalize oneself with these fringe, radical, libertarian comments. On a career path, you know.
This is the foundation of filth and garbage that Obamacare is built on. This type of meeting ultimately will result in denying care through rationing to millions, and result in their deaths. Can you imagine saying that to this crowd?
G. Keith Smith, M.D.
What does this mean? This means that a company is willing to take the risk of the expense of providing health care to its employees. Rather than pay gigantic amounts of health insurance premiums, the company actually pays the bills.
We are self insured here at the Surgery Center of Oklahoma. Our employees have a health savings account. That means that the company gives them a certain amount of money at the beginning of the year and what they don’t spend they keep. The employees love this. The owners of the Surgery Center of Oklahoma love this. How does it work so well? The employees are incentivized to spend very little of the money in their account, that’s how. They are incentivized to stay as healthy as they can in order to protect the balance of their account. When a doctor says, “you need this procedure or this drug,” our employees say….ready?….”..how much does it cost?” Why would they ask such a question? Because it’s their money! Not uncommonly they will say,” well, I’m going to shop around. That sounds kind of high to me.” Not uncommonly the doctor hearing this concern over costs drops their price right there and then on the spot.
Why don’t more companies self insure? Because it’s not the usual way of doing things. Because people working in human resources departments are caught between a rock and a hard place. Anything they do that’s good for the employees makes the owners uncomfortable and mad. Anything they do that’s good for the owners of the company typically makes the employees angry. Best to do nothing or next to nothing. Find a comfortable groove and keep your head down. Fight change at every turn.
This may change. Health insurance companies have played this game with big hospitals for far too long. ”It is simply not sustainable,” as one health insurance company executive told me recently. I think we will see more and more self insured companies. They will be shopping for quality and transparent pricing. They will be looking for ways to incentivize their employees to feel ownership in the health plan. They will cease doing business with the insurance companies that have raked them over the coals for years. Fewer and fewer of their employees will go to the big hospitals for their care. The Surgery Center of Oklahoma will be in a hiring frenzy due to the demand for our affordable high quality of care.
The sooner the better.
G. Keith Smith, M.D.
“I don’t care where you do the cases I refer to you.” This is what an ear nose and throat partner of mine recently heard from a hospital-employed primary care doc. ”Just come on down to “our” hospital. We need an ENT specialist here. My partner had been honest and open when he told this primary care doctor that children and certain difficult adult patients would need to be operated on at the surgery center where he was a partner, rather than the hospital that employed this doctor. ”No problem!” ”We just want you down here running a clinic.”
What followed was a bait and switch that is all too common. What my partner did in response to the hospital is not common, and is why I am writing this. An adult patient without insurance, but needing a sinus surgery came into this clinic. He didn’t have any particular health issues that made my partner feel like he needed to bring him to our surgery center. He just didn’t have any insurance. He was going to have to pay for this out of his pocket. My partner consulted the pricing page at our surgery center and told this patient how much it was going to cost. Out of courtesy, he called the administration of the hospital where this clinic was located and asked them for a price for this uninsured patient. ”$20,000” was the answer. And that didn’t include the surgeon and anesthesia charges, unlike our answer (ours for his condition was $3795…for everything and everyone).
After the surgery, my partner had a very different conversation with the primary care doctor. ”Why the hell did you operate on Mr. Jones at The Surgery Center of Oklahoma?” “Because they had the best price by far and he was uninsured.” “I don’t care. You should have done that surgery here!”
Now the good part. My partner walked away from that clinic and never went back. Many physicians would have sucked it up and stayed and dealt with coercive and compromised fools like this, hoping to stay as busy as they could. ”One of us has to be the advocate for patients, and as his primary care doc, that is supposed to be you.” Having said this, the doctor employee didn’t know what to say, and my partner said nothing more. He just left.
The extent to which the interests of patients have been compromised by the employment of physicians by hospitals is vast, I think. This exchange represents just the surface of the problem. Once again, patients should make sure that their doctor is working for them, not for someone else.
G. Keith Smith, M.D.
Does the physician facility owner act differently in his own facility? Do rental cars get the same care and attention as the car that you own? I have found that surgeons with short fuses and hot tempers are tolerated where they are non-owners, whereas their partners in co-owned facilities are not amused by these antics as this behavior makes retention of outstanding personnel difficult. How can this be? Wouldn’t the facility owner’s tyrant attitude be un-checked in the facility he owns? Or is it possible that the scrub tech or nurse that was the target could be the favorite of another surgeon (who will not take kindly to another running them off)? Most of the time this anger from surgeons is on behalf of their patients and their frustration that no matter what they say, nothing will change for the better. As facility owners, physicians have total control over what needs to change to enhance patient care and the frustration is therefore much less. I have also found in my twenty years of anesthesia practice that surgeons in operating environments where they have no financial stake are often times very needy and demand all manner of gadgets and bells and whistles that are many times completely unnecessary for the completion of a surgical procedure. At our facility, the surgeons are constantly exposed to comments by the staff like, “Dr. X doesn’t do it that way,” or “..if you use this instead we save $75.” In a big hospital the surgeon would say,”!@#$%^^&&*(*&&^!”..or something like that..basically…”why do you think I care?” These cost saving tips and efficiency tips are welcome and wanted in our facility and in others where there is cost accountability. Another thing to consider: hospitals are paid by insurance companies for what they use…surgery centers are paid for what we do. What? You mean the hospitals are actually incentivized to be wasteful and expensive? And surgery centers are paid the same regardless of what their costs are for completion of a surgical procedure? This accountability has forced physicians in outpatient centers to look the cost dragon in the eye, something that rarely happens in the big hospitals. It has made us aware that some physicians cannot possibly complete certain operations profitably while others can. These inefficient and wasteful physicians (rarely found in physician-owned facilities, interestingly) are actually better for the profits of hospitals as the hospital is compensated for all of the stuff that is used in addition to what is done. Incredible, isn’t it? What other business could work this way and survive? Once surgeons are hospital employees (having been the victims of a hospital hostile takeover) will their utilization of unnecessary supplies increase in accordance with the wishes of their employer? Whose bread I eat his song I must sing…or something like that.
Does the physician facility owner act differently in his own facility? Do rental cars get the same care and attention as the car that you own? I have found that surgeons with short fuses and hot tempers are tolerated where they are non-owners, whereas their partners in co-owned facilities are not amused by these antics as this behavior makes retention of outstanding personnel difficult. How can this be? Wouldn’t the facility owner’s tyrant attitude be un-checked in the facility he owns? Or is it possible that the scrub tech or nurse that was the target could be the favorite of another surgeon (who will not take kindly to another running them off)? Most of the time this anger from surgeons is on behalf of their patients and their frustration that no matter what they say, nothing will change for the better. As facility owners, physicians have total control over what needs to change to enhance patient care and the frustration is therefore much less. I have also found in my twenty years of anesthesia practice that surgeons in operating environments where they have no financial stake are often times very needy and demand all manner of gadgets and bells and whistles that are many times completely unnecessary for the completion of a surgical procedure. At our facility, the surgeons are constantly exposed to comments by the staff like, “Dr. X doesn’t do it that way,” or “..if you use this instead we save $75.” In a big hospital the surgeon would say,”!@#$%^^&&*(*&&^!”..or something like that..basically…”why do you think I care?” These cost saving tips and efficiency tips are welcome and wanted in our facility and in others where there is cost accountability.
Another thing to consider: hospitals are paid by insurance companies for what they use…surgery centers are paid for what we do. What? You mean the hospitals are actually incentivized to be wasteful and expensive? And surgery centers are paid the same regardless of what their costs are for completion of a surgical procedure? This accountability has forced physicians in outpatient centers to look the cost dragon in the eye, something that rarely happens in the big hospitals. It has made us aware that some physicians cannot possibly complete certain operations profitably while others can. These inefficient and wasteful physicians (rarely found in physician-owned facilities, interestingly) are actually better for the profits of hospitals as the hospital is compensated for all of the stuff that is used in addition to what is done. Incredible, isn’t it? What other business could work this way and survive? Once surgeons are hospital employees (having been the victims of a hospital hostile takeover) will their utilization of unnecessary supplies increase in accordance with the wishes of their employer? Whose bread I eat his song I must sing…or something like that.
Another oldie, from April/11.
What effect does the ownership of medical facilities by physicians have on the quality of health care and on prices? My great uncle was the only physician in a small town in Oklahoma for many years and his home doubled as his living quarters(upstairs) and as the town hospital(downstairs). Eventually he built a hospital away from his residence and I have subsequently learned that this was the situation in most of rural Oklahoma. Indeed, if it weren’t for the willingness of physicians to take this risk, there would have been no hospitals in these small communities. My great uncle was never able to wash his hands of the care rendered to patients in his facility, saying, “well…I did my part, but the folks in the hospital messed up.” He was accountable for not only the care he rendered but of that given his patients by everyone in his hospital. He was also not able to say,”I can’t do anything about that bill…that’s the hospital…my fees are fair.” The patients knew that it was his hospital and that he could charge whatever he wanted and that whatever they were charged it was his decision and certainly his responsibility. He was also not able to say,”I don’t know why the credentials committee gave that incompetent butcher privileges.” He was in control of who he worked with and who was allowed to work in his hospital. Indeed, the poor practice of medicine by anyone in his facility was a reflection on him.
Little has changed. Physician facility owners are accountable to their patients on more levels than physicians that are not facility owners. Multiple levels of accountability to the patients we serve makes the likelihood of high quality care, fair pricing and regular policing of all those working at the facility a natural occurrence.
You say, “Yeah, but doctors who own their own facilities are going to churn and overutilize to pad their pockets!” Physicians who act in this manner are everywhere, but are less likely to be found in a physician-owned facility because their reputations (and that of every physician working in the facility) are on the line. If a surgeon is going to perform unnecessary surgery he is more likely to get away with that in a facility where he has no interest in the long term success of the facility and where his actions don’t affect the reputation of his colleagues. And for those of you who object to physician ownership, how is it that no conflict of interest exists when hospitals own doctors but one supposedly does when doctors own hospitals?
G. Keith Smith, M.D.