G. Keith Smith, M.D.

We operated on a young man today with a torn Achilles tendon.  This is a devastating injury, the treatment for which is not optional.  He had no insurance.  We did his surgery for $5730.  This included the facility fee, the surgeon’s fee and the anesthesia fee.  

His next best price?  $15,000, from a “faith-based” “not for profit” hospital.  This fee did not include the surgeon’s fee or the anesthesiologist’s fee.  They sure need a whole lot more dough to not make a profit than we do.  Except, oh yeah, we are making a profit at our price!  

How do we do this?  By cutting corners?  Certainly not.  Using cheap supplies?  Nope.  ”Greedy doctors who own their facilities charge more than anyone, right?”  Nope.  We are able to do this for one simple reason as I’ve written here many times.  By virtue of our physician ownership, we have eliminated the most inefficient, greedy, bankrupting, corrupt, vicious profit seeker from the equation:  the “not for profit” hospital.  

What will this man do with the $10,000 he didn’t pay the nuns and their hospital?  Bastiat’s economic lessons are all around us, his what is seen and what is not seen, foremost among them, I think.  Think about this whenever you hear one of these hospital suits droning on about their “benefit to the community.”  However they calculate that, this man benefitted by at least $10,000 by steering clear of their doors.

G. Keith Smith, M.D.

Remember hearing that one of the reasons we needed health care reform was to put an end to cost-shifting, that practice of padding someone’s hospital bill to cover “losses” for someone who couldn’t pay?  I remember hearing that mandating coverage for everyone would actually lower our hospital bills by putting an end to this practice.  Those poor hospitals.  All of the big city hospitals going broke from taking care of the “uninsured.”  

From our local paper today:  ”Noisy saws sliced through natural native stones one by one, getting the pieces ready to decorate the walls of Edmond’s $88 million medical complex and wellness center.”  The Sisters of Mercy are 60% of their way to not making even more profits on this facility, one complete with lap swimming, surgery center, work out facility and offices for their employed doctors, all located in the middle of one of the highest per capita income areas in the state of Oklahoma.  Hmmm.  

“Larger stones such as those found across the Oklahoma landscape form a retaining wall that surrounds the building now taking shape,” continues the article.  ”We are using a palette of six to seven accent colors,” said David Tew, chief operating officer of Mercy Health System of Oklahoma.  ”They are vibrant and soothing.”  ”The (lap) pools sit near large windows so swimmers can look outside at a wooded area with large trees.”   

The facility is located on a little over 25 acres on a major interstate highway and is located across the street from a vacant hospital built by another “not for profit” giant.  All of this building is happening down the street from a hospital that merged with the state teaching hospital due to lack of demand.  The teaching hospital (home of the supposedly bankrupt, Level One Trauma Center), paid cash for the struggling Edmond hospital.  

Continuing: “A fountain similar to the one outside the House of Mercy on Baggot Street in Dublin sits at the south entrance.  House of Mercy, a shelter for abandoned and abused women and children from Dublin’s slums, was the start of a ministry that continues today in Sisters of Mercy religious communities around the world.”  These nuns have come a long way, baby.

Ok.  What questions do you have?  How about these:  What sort of abusive billing practices have been inflicted on patients in the Mercy system for a “not for profit” outfit like this to come up with 88 million bucks (keep in mind this is not the only construction project they have going on)?  Think they’ve overdone the cost-shifting thing just a little?  Could it be that their “uninsured burden” was a little exaggerated?  Why are they building in the most affluent part of town?  Why are they building right across the street from their virtually unused competitor’s facility?  How did they pick what services they would offer at this facility (wellness, workout, lap swimming, outpatient surgery, physical therapy, colonoscopy, pain management)?  Does it sound like they’re trying to “not make a profit?”  

1.5 million people file for bankruptcy every year in the U.S.  60% do so because of their medical bills.  78% of those filing bankruptcy for medical bills have insurance.  The average amount over which bankruptcy was filed was about $18,000.  The Sistas of Mercy could therefore have eliminated (or not caused in the first place) the bankruptcy trauma to over 4800 families with the 88 million they’re blowing on their new temple.  But then, they have another mission in mind, don’t they?  

G. Keith Smith, M.D.

“Not for profit” hospitals file a tax form called a “990.”  Very few of them file these on time as they are required to do.  I believe these hospitals purposefully remain years behind to avoid any scrutiny of their current financial condition.  This allows them to claim “critical losses” and “impending bankruptcy” and other such lies, lies that are primarily responsible for bringing us Obamacare.  Remember all these “critical access” hospitals were going broke from seeing all of the uninsured folks in their emergency rooms.  Right.  Very few big hospital emergency rooms don’t have a building crane in front of them signaling their expansion of this portal to bankruptcy for so many patients.  St. Anthony Hospital here in Oklahoma City has “lost” so much money from their emergency room that they are building satellite emergency rooms so they can lose even more!   

Mercy Health System has done one better than the rest.  They haven’t filed “990’s” because they claim to be a catholic church, a division of the Vatican!  They have, however, recently filed a “990,” albeit “voluntarily.”  Check out this info-packed article from the big St. Louis paper about this scam.

The author stops shy of outing their participation in the uncompensated care scam, although he does hint at their overestimating their “charitable care” with inflated pricing for those they know can’t pay.  

Lot’s of talk from these Mercy folks about all they do for the community.  After you read this article, one that outs their millionaire CEO’s and lavish corporate retreats on the company jet with their spouses, you’ll be more inclined to see it my way:  it’s what they do to the community.  

G. Keith Smith, M.D.

In a discussion about the insurance hassles associated with ordering CAT (Computerized Axial Tomography) scans for patients with sinus disease, one of my ear, nose and throat partners told me the other day that he “doesn’t answer the phone from ‘800’ numbers and won’t call ‘800’ numbers.”  This is exactly what one insurance company, in particular, demands.  The ordering physician must call an “800” number, wait on hold until another physician comes on the phone (usually one speaking broken English) and justify the scan…basically ask permission for the scan to be “approved.”  

Let’s look at the effect his refusal has had on sinus CAT scans here in Oklahoma.  First, more physicians are refusing to jump through the insurance hoops to gain “approval” for these scans.  The patients need a CAT scan, but are insured by a company that has made the hassle too great with these doctors.  Large numbers of patients that are motivated cash buyers are looking for a reasonably priced CAT scan since having this insurance has actually prevented them from getting a scan!  Behold a market miracle!!  A bunch of doctors happen to own a CAT scanner and with  the demand for affordable scans higher than ever (with the “insured” essentially “uninsured”)……they are now offering sinus CAT scans (including the radiologist’s fee) for $150!   You can look at my blog about what a CAT scan at a “not for profit” hospital costs here.  

His decision to “not play the insurance game” resulted in a rationally priced CAT scan to make an appearance in the community.  How many times do we need to demonstrate that the absence of insurance is necessary to reveal true costs and result in rational pricing?  How many times do we need to demonstrate that “coverage doesn’t mean care?”  Relying on coverage in this case actually guarantees no access to a CAT scanner. 

“What about the poor, ” you scream!!!?  Here’s my answer:  the “not for profit,” “critical access” hospital down the street charges $4400 for a CAT scan.  These greedy doctors are charging $150.  Isn’t the logical flaw obvious in mandating that everyone have insurance?  $150 is a price that almost anyone can afford.  No one benefits from market forces more than the people who couldn’t afford something right before the market took over.  They’ll be able to soon enough.

I am giving some thought to offering sinus surgery on our website at the current price, that includes a CAT scan if the patient needs it.  At $150, these doctors are almost giving it away and yet…..they are making a profit.  How do these prices come about?  The profit motive, the absence of government interference, physician ownership and the absence of third party, insurance distortion.  Oh yeah. No “charitable hospitals.” 2014 and the full implementation of Obamacare better hurry up before information and stories like this becomes widespread.  

G. Keith Smith, M.D.

Recently, one of my sons facetiously suggested that we turn the air conditioner down to the lowest temperature and open the windows to cool it off outside.  I made the comment that this would help with global warming.  We all had a good laugh but then I started thinking.  This is Keynesian economics.  Just as my son’s suggestion discounted the heat contribution of the compressor and fan, Keynes’ economics discounts the damage done by the accumulation of debt and the depreciation of currency.  This is also a clear demonstration of Bastiat’s “What is seen and what is not seen,” no?

But isn’t this also Obamacare?  What is seen will be many more people with insurance cards/coverage.  What will be discounted (not seen) will be the fine print on the card:  “this gives you a right to hope for care,” or “this gives you a right to die in line.”  The physicians fees associated with this plan will be low.  Really low.  So low that no one will see these patients.  This is intentional.  Medicare for everyone. This fee fixing below cost is the purpose of the IPAB (independent payment advisory board).   Rationing will be the result and the doctors will be made out to be the bad guys, nevermind (discounting) the price offered for an office call or heart surgery will be well below the market-clearing price.  How many cars would a car dealer sell if forced to sell them below his cost?  How well-stocked would the grocery store be if the owner were forced to sell the items below cost? 

Ask a Medicare beneficiary sometime how hard it was to find a doctor to see them after relocating.  Most physicians don’t want to see Medicare and Medicaid patients because the payment is poor and hassles are intense(make a mistake on a claim form and you can go to prison for fraud).   Obamacare just made it worse for the Medicare patients and others on government plans.  Access to care is a problem for the uninsured but will be much more so for those on government plans like Medicare and Medicaid.  Ask a physician who he’d rather see, a Medicare patient or someone paying them what they can out of their pocket.  That uninsured individual who was paying for their care will now have that money taxed out of their pocket and will be in a line, rather than in the doctor’s office.  The money taxed away from him will go to the cronies who wrote this bill, not for his care. 

Will this new UCA (Unaffordable Care Act) health care guarantee care?  No.  Many will be denied access to care because they have this new “insurance” card in their billfold.  If you are “covered” by an insurance that pays a physician less than he is willing to see you for, he is …..ready?….not going to see you.  If you have nothing, he’ll probably see you out of charity.  It is another thing altogether to put a gun to his head and tell him he is going to see UCA patients and be paid significantly below the market clearing price.  Many insurance cards will be seen.  The denial of access and rationing will tend to be discounted or not seen.

Are there people who fall through the cracks and have poor access now?  Yes.  This is the fault of the government and their prior interventions in to the business of health care (tax code discriminating against individual purchases of true insurance, for instance).  The court’s ruling on the UCA represents the institutionalization of “falling through the cracks,” rather than the exception.  I believe that this bill was meant to create sufficient chaos in the medical marketplace that many will beg the government to ride in on their white horse and rescue us from the crisis they have caused with their ultimate goal:  a single payor system.  

As Walter Williams has said, “if you want to boil a frog, put him in cool water first so he won’t know what’s going on and won’t jump out.  Next thing he knows, it’s too late to get out.”  We all need to work to identify all that is not easily seen and protect ourselves with a healthy amount of skepticism from those who, as representatives of “the government,” are “here to help us.”

G. Keith Smith, M.D.