Filed under: Capitalism, Domestic Policy, Election 2012, Freedom, Health Care | Tags: Free Market Capitalism, Profit is Not a Bad Word., The Surgery Center
Back during World War II, wages were frozen, so in order to attract and reward employees, employers began offering health insurance as a benefit. And here we are. It seemed like a good idea at the time. Third parties pay the majority of medical bills, so competition is not allowed to fun free. Yet when free enterprise opens up the marketplace, the result is better care for a remarkably lower cost. A third-party payer system is one in which A buys goods or services from B that are paid for by C. Because insurance companies or the government pick up the tab, patients don’t have the normal incentive to choose the best value. In the current situation patients often do not know what procedures cost.
Three years ago, Dr. Keith Smith, co-founder and managing partner of the Surgery Center of Oklahoma took a radical step in the health care industry. He posted a list of prices for 112 common surgical procedures online. He and his partner Dr. Steve Lantier founded the Surgery Center 15 years ago, after they became disillusioned at the way patients were treated at St. Anthony Hospital in Oklahoma City, where the two men worked as anesthesiologists. . They bought the shell of a former surgical center with the aim of creating a for-profit facility that could deliver fist-rate care at a fraction of what traditional hospitals charge.
The Surgery Center demonstrates that you can deliver high quality care at low prices.”In any other industry, tons of attention is devoted to making systems more efficient, but in health care that’s just completely lost,” says Dr. Jason Sigmon, an ear, nose and throat surgeon who regularly performs procedures at both the Surgery center and at the Integris Baptist Medical Center which is run by the non-profit Integris Health, the largest health care provider in Oklahoma.
Every employee, except for clerical staff, at the Surgery Center is directly involved in patient care. Human resources and building maintenance are the responsibility of the head nurse. No administrative employees. (the top 18 administrative employees at Integris Health in 2010 received an average of $413,000 in compensation). Because bills charged by Integris are paid primarily by insurance companies or the government, the hospital gets away with gouging for its services. A procedure that Dr. Sigmon performed at Integris in October 2010 called a “complex bilateral sinus procedure” which helps patients with chronic nasal infections. The bill, which was strictly for the hospital and does not include Sigmon’s or the anesthesiologist’s fees totaled $33,505. When Sigmon performs the same procedure at the Surgery Center, the all-inclusive price is $4,885.
ObamaCare is, first of all, very badly written law. It assumes that America will simply salute and follow its regulations. But people and businesses respond to incentives. Companies are getting out of the health insurance market and self-funding. Hospitals are reorganizing and Doctor’s groups are reorganizing. Some doctors are establishing “concierge” practices where patients pay a concierge fee to a physician for yearly care. There will be many other responses as ObamaCare begins to take effect.
On the other hand, a new provision buried in ObamaCare effectively prohibits doctors from starting their own hospitals or expanding the hospitals they already own, which has been widely interpreted as a give-away to the American Hospital Association — the way things are done in Chicago politics. The Surgery Center is exempt from this statute, since it is technically not a hospital and does not accept Medicaid or Medicare.
Smith and Lantier believe that market-driven facilities like theirs will thrive and proliferate as consumers catch on to the very costly collusion between Big Government and Big Health Care. Affordable health care is possible.
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