Government Versus Private Practice: An Uneven Contest

No Contest:The Case Against Competition: Why We Lose in Our Race to Win

Alfie Kohn, title and subtitles of his 1986 book , published by Houghton Mifflin Company, 1986

Yesterday two things happened:

One,  Donald Copeland, a family physician in Cornelius, North Carolina, just outside Charlotte, called to say it was no contest between the forces of government and family physicians who wanted to opt out of Medicare, Medicaid, and other 3^rd party arrangements to enter direct pay practices.   Government has the power, the health law, and most of the media on their side. Doctors were insufficiently organized,  possessed little capital, and possessed insufficient marketing power to plead their cause.

Two,   Jane Orient, MD,  internist and executive director of the American Association of Physicians and Surgeons,  sent me  a fund-raising  letter protesting the burdens imposed by “Maintenance of Certification” and “Maintenance of Licensure” schemes that further burden private practitioners already drowning in regulations and their attendant expenses.   

She says, “Surely you agree that your time is better spent seeing patients than being demeaned  by some unknown bureaucrat who take your time and money and give you exams that have no connection with the case you offer.” 

She goes on.”Nearly every government and corporate entity is trying to interfere with the practice of medicine and drive out independent physicians.” 

She adds,” Private doctors are the scapegoats.  Medical boards are harassing doctors. Insurance companies are refusing to pay for 0ut-of-network physicians.  Sham peer review at hospitals is driving out good physicians.”

It is an uneven, perhaps even no contest.  Centralized  government thinks it can impose its will on physicians.  Private physicians have no centralized organization pleading their cause.   The AMA is of no help.   It has backed ObamaCare and seems more preoccupied with collecting its revenues from its lucrative coding system rather defending private practice.

The government’s case for the future of private practices sound simply enough- collaborate rather than compete.  Competition is destructive.  Collaboration and cooperation are constructive. Or so it says.

You physicians.  Gather together in collaborative teams.  On those teams, place other health professionals of every ilk. Lead those teams. Have frequent meetings with them.  Team with hospitals.   Think of your patients not so much in terms of their individual health  but as participants in  “population health.”  

 Your performance will be judged by computer analysis of the outcomes of your population panel.   To make this population concept work,   you will each need to scrupulous code every detail of your patient into something called the ICD-10 coding system.   You will need to carry a computer with you everywhere you go.   You may need a “scribe” to help you enter the data.   You will definitely require a comprehensive electronic health record system, to be installed and maintained at your expense. Above all, you will have to spend time away from your patients, dealing with the technocratic details.

Do not believe those myths perpetrated by advocates of market-driven system: that competition  is part of human nature; that it motivates to do our best; that it raises quality and lowers costs, that it distributes health care services in a more timely manner;  that it gives patients more choice and power.

You know better.   Look at those “free” single-payer systems in other countries.   

Think of how these systems bespeak and reek of government compassion.   Ignore that these systems are breaking the budget banks of these countries.  Forget that these countries are scrambling to set up alternative market systems.   Do not look at the current “death while waiting” VA system in the U.S. and the lengthening waiting lists of those other countries. 
 

These are aberrations.  These systems will get it right.  eventually, maybe not in your lifetime, but later rather than sooner. 

 And by all means,  do not consider the fact that private physicians, in sufficient numbers, are the key to any successful health system.  And ask yourself this question: What good is universal single payer care without physicians to deliver that care.

Tweet:   Government is competing with private physicians to deliver health care.  At this stage, it is no contest.  Government has the power, podium, the health law, and money  on its side.

Interview with Charles Sauer, Executive Director of Free Market  Medical Association

Market competition is the only form of organization which can afford a large measure of freedom to the individual.

Frank Hyneman Knight (1885-1974), Freedom and Reform (1947)

Charles Sauer is a 34 year old Washington-based economist who heads up the newly formed Free Market Medical Association.   Working in concert with Keith Smith, MD, founder and CEO of the Oklahoma Surgery Center,  as well as Jay Kempton, President of the Kempton Group, Sauer aims to organize a coalition of primary care physicians,  specialists, ambulatory surgery and diagnostic  centers,  hospitals, third party administrators,  self-funded corporations, and consumer groups to develop  a transparent, direct,  cash oriented, affordable  system of care  independent of  involvement by government and insurers.  

Q:    Tell me about yourself.

A:  I am executive director of the Free Market Medical Association.   We have been an official entity for just over 3 months, but our founders have all been on the cutting edge of the free market medical revolution.

Q: What is your background? Why have you assumed this position?

A:  I’m an economist.   I believe there needs to be a change in the system.   I am the father of two little girls,  age 1 and 3, and all of us recently lost our health care plans when they were not compliant with ObamaCare exchange plans.  The government is telling us what kind of insurance we should have, and I do not believe government has that prerogative.

As far as my background,  I’ ve been on Capitol Hill for 10 years in a Senator’s office,  a governor’s office, and a think tank that specialized in free market health care.  And, 2007 I formed the Market Institute to educate Congressmen and their staffs about the principles of capitalism and entrepreneurship by working with free market think tanks and associations including the Association of American Physicians and Surgeons.

The Assocation started when I met Dr. Keith Smith, who heads up the Oklahoma Surgery Center.  We made the rounds of Congress together, and we realized the need for a Free Market Medical Association.

Q: How do you define “free market medicine?”

A:  The ability of patients to contract directly with the doctor. As things stand now, the government often steps in and decides what kind of care will be provided and how much it will cost, and large insurers tend to follow the government’s lead.  This top down approach currently dominates health care. Dr. Keith Smith cut through all of this by posting his Surgery Center’s prices online.   hysicians practice differently – they can give discounts, provide charitable care, spend more time with patients, bundle their services, and most importantly come up with ever more efficient ways to provide an increasing quality of care at lower prices because that is how they compete for more business.    That can’t be done with government plans.  

Q: What do you say to those who say only the government and insurers can assure quality and prevent market abuse?

A:  Government and insurers cannot assure quality.  They can restrict care, issue guidelines,  limit choices to fit their budgets, reduce care, prolong waiting lines, or fail to pay, but they cannot assure quality.   In the end, only consumers should value, and in a free market doctors must compete to provide that quality quickly, directly, and transparently.  The reason the Oklahoma Surgery Center works is that everything is transparent, and direct with almost no waiting.

Q: The Oklahoma Surgery Center has no waiting room?

A:  My point is that if you call Doctor Smith or any other direct pay physician, you can likely get in tomorrow.   When my daughter had her eye surgery, we waited 3 months.  There’s a difference between a waiting room, and a reception area.

Q: Would it be fair to say Free Market Medicine is medicine without 3^rd party intervention?

A:  It is that, but the primary idea is to move in a direction that provides the patient more power- more ability to contract directly with the doctor.

At the Free Market Medical Association, we are working to unify doctors and other players in the market by showing  them that the free market is the best way to practice medicine for both the physician and the patient and showing self-insured businesses and other payers that free market medicine is the most cost-efficient method of providing quality care for their employees. 

We are trying to unify actors in the health care market.   We are trying to promote the presence of free market medicine practitioners and to let people know they exist.  The more people use these practitioners and more pleased they are, the less controversial free market medicine becomes.

Q: Another association goal is to lower health costs by cutting out the middleman.   We have to keep in mind that collectively doctors account for only 20% of health costs, and primary care 6% of that. Am I right?

A: You are right on the numbers, but we don’t know what the market mix should be. We really only know one fact: Anytime that competition is introduced to the market prices decrease and quality increases. That can happen by eliminating the middle man, but in other instances that can happen through MediBid, that can happen through the use of product like the “Zero Card”, or in the case of many self-insured businesses their Third Party Administrator may just start promoting a cash pay physician.  Sometimes, third parties can make health care more effective and efficient, but only when they are designed to promote competition. Competition is what has the ability to identify the true cost of health care. For instance, Dr. Smith and the Surgery Center of Oklahoma, by competing with hospitals, have started defining the true cost of health care in the Oklahoma metro.

Q.  What are you saying – that the true cost is something that is currently unknown and is hiding behind bureaucratic medicine?

A:  When nobody competes, no one person knows what things truly cost.  Competition drives down costs, and drives up quality. Take the Oklahoma Surgery Center.  It had a zero percent infection rate in 2012.   No other hospital I know of can say that.  Dr. Smith recently contracted with Oklahoma County, and in the first 3 weeks of the contract,   he saved the county $140,000.  Free market health care changes the way we think about cost and quality.

Q: Who would you like to be members of the Free Market Medical Association?

A:  Doctors, other health care providers, facilities, third-party administrators, self-insured businesses, banks, and others.   We have different membership levels.   All of these individuals and entities make up the market. We are trying to unify the islands of excellence, a phras

e Peter Orzag of the Obama administration was fond of using. Entrepreneurs, not government, usually create these islands of excellence, these new business models.

Q: You are a creature of Washington.   And while there, you created something called the Market Institute.   What was that Institute all about?

A:  I started the Market Institute 6 years ago after being in Washington for 5 years.  I formed it to represent and teach the principles of capitalism and ideas by working with free market institutes and associations.  Through the Institute I have had the opportunity to work with many organizations including, the Association of American Physicians and Surgeons,  the Ayn Rand Institute, Entrepreneurs for Growth, The Savings and Retirement Foundation, the National Tax Limitation Committee, the National Center for Policy Analysis and few others.  Through all of these, I teach capitalism and entrepreneurship on Capitol Hill to Capitol Hill staffers.   Many of these staffers are young, well-educated, extremely smart, and want to change the world for the better, but they have not been exposed to how capitalism works.   The Market Institute is my other hat.

Tweet:   Charles Sauer, executive director of the Free Market Medical Association, believes that free markets will promote competition, lower costs, improve quality, and speed access to health care. @marketmedicine

Interview with Sean Purnell, Author of The Self-Pay Patient

A thing is worth whatever the buyer will pay for it.

Maxim

Q: Tell me, Sean.  What is your official title?  What do you want to be known for?

A:  I suppose it would be author of The Self-Pay Patient: Affordable Health Care Choices in the Age of ObamaCare  and blogger at TheSelfPayPatient.com.

Q: What is your background?  How did you come to write this book and create this blog?

A:  A couple of things. I used to work for the Congressman from Iowa, Greg Ganske, who was interested in  the Patients Bill of Rights.  I didn’t completely agree with the Congressman, but I learned a lot about how insurance companies can interfere with care.  Then I went to the Heartland Institute where I wrote about free market health care, where I kept writing and researching and studying what makes the system tick and what the options are in paying for health care.  Last year I decided I would write a book about it.

Q: What is the Heartland Institute?

A:  The Heartland Institute is a non-profit think tank with a free-market orientation.  It deals with health policy issues. It is located in Chicago. 

Q: Let’s get back to your book.  When did you publish it, and where can our readers get it?

A:  The book is available on Amazon as well as the Apple bookstore and Barnesandnoble.com. I published it in December of 2013, and the paperback version came out in January 2014.   I’ve sold about 1000 copies so far, and I hope to ramp that up in the next couple of months.

Q: What is the thesis of the book?

A:  The basic idea is that people who are looking for affordable health care can simply pay directly for medical treatments to eliminate the middleman and not to enter the insurance system, just as you would any other market transaction, such as paying a mechanic.  If you do that,  you cut out a lot of the bureaucratic costs, and you have better access to care. 

Q: In your recent talk before the American Association of Physicians and Surgeons in Minneapolis, where I was the keynoter, you  listed the number of people who are interested in self-pay.  Could you cite that list for me again?

A:  Yes, these are the number of people who are or who are going to be self-pay. Roughly  speaking, you are looking at

.

·         40 million Americans who are uninsured.

·         30-40 million Americans who are in high deductible health plans,  who are going to have to pay directly for many routine treatments or evaluations.

·         Then there are millions of people, whose numbers are not known, with comprehensive insurance who will not be satisfied with narrow networks and limited choices of doctors and hospitals.

Somewhere between 60 million to 100 million Americans will be self-pay.

Q: This is paradoxical to me.  ObamaCare health exchange plans, with  their  high premiums and high deductibles, have opened up the self-pay floodgates.  The direct pay/concierge/cash-only or cash-friendly physicians whom I have interviewed,  all tell me ObamaCare has stimulated their business and is their number one salesman. Am I reading this development correctly?   After all, that was not the way it was supposed to be.

A:  Self-pay is a very common consequence of ObamaCare.  ObamaCare,  with all of its faults,  has caused people to rethink how they react and feel about health care and how they choose to pay for it. Many people are deciding to go with high deductible plans or no health insurance at all.  When ObamaCare drives up the price of insurance at the same time deductibles are going up, people  re-examine the premise that you need good insurance to get  good care. It is not surprising to me ObamaCare is causing a lot of doctors  and patients to gravitate  towards the direct-pay model.

Q: I have read that more than half of the uninsured do not  plan to buy a health exchange plan.  Could that be?

A: It doesn’t surprise me at all. When I looked at the premiums and deductibles,  it made sense people would be reluctant to pay for insurance they were never going to use. People were being asked to pay $300 a month for premiums when they only went to see the doctor once or twice a year. Those numbers don’t make sense to a lot of people.  

People simply don’t see value in those kinds of policies,  especially when they are associated with co-pays, waits, short visits, and bureaucratic hassles.  ObamaCare is asking them to buy policies they didn’t see value at at $100 a month, and now they are asking them to buy policies at two or times that $100 a month.  It’s no surprise  they rejected it at the lower price, they  reject it at the higher price. 

Q:  In your talk before the AAPS, you made the distinction between “cash-only” and cash-friendly” practices.   What’s  the difference?

A:  Cash-only really and truly is cash-only.   Cash-only doctors do not participate in any insurance, including Medicare and Medicaid. They are 3^rd party free.   Cash-friendly practices are often overlooked.   These are practices that keep a couple of their health plans active,  but they have organized their practices in such a way they actually have real prices.  When people call and ask how much something costs– a physical,  a blood test, the suturing of a cut – they can promptly  and directly answer without asking what kind of insurance patients  have. 

Q:  So upfront transparency is a big attraction to consumers?

A:  Yes, very much so.   People want to know how much things are going to cost, and most  doctors and hospitals and surgery centers at this point are unable to tell them.  Now some practices are more forthcoming and transparent and are offering bundled pricing for a variety of services.

Q: That question “How much does it cost?” is particularly difficult for hospitals to answer,  is it not?

A:  Yes, almost every hospitals has dozens, even  hundreds of associated line items with any procedure or episode of care.  So if you need an appendectomy, hospitals are unable to give you a single price, and their separate line items are often inflated to cover the administrative costs. Bureaucratic medicine is pricey.

Q: But bureaucratic obstacles can be overcome.  I was speaking to Doctor Keith Smith, who runs the Oklahoma Surgical Center.  He has an arrangement with a local hospital for inpatient surgical procedures, and the hospital can give him a bundled price for any procedure within a half hour after Smith calls asking, “What will it cost?  What will the bundled price be?”

A: Yes, but in most metropolitan markets,  in which you do not have a transparent independent surgical center, you cannot get that information for political and financial reasons. 

Q: I notice you are a member of the Free Market Medical Association, which promotes direct pay and self-pay.  Why did you join?

A:   For me given my background in free market economics,  I see free market health care as the future where buyers and consumers negotiate directly and work off a transparent health bill sheet.   You buy on the basis of value, and there’s very little of the interference the government or insurer-directed system has.  It’s simply a more normal market as any other good  or service.  The Free Market Medical Association is good natural fit for my belief system. It will have to co-exist with the larger and more dominant payment system,  but it does and will continue to exist.   The Free Market Association facilitates networking,  promotion,  and market of those of us who believe in the cost effectiveness and quality provided by market competition.

Q;  In your talk before the AAPS, you made a very salient point.  Consumers interested in self-pay or direct pay have difficulties finding physicians offering these services.  One quick way of breaking through this information barrier,  you said, was to notify your local media outlets of the availability of your services.   The media  will find your story to be irresistible because their readers and viewers want to know obamaCare alternatives,  as indicated by a poll just today which contains the statistic that 55% of Americans who oppose ObamaCare versus 41% who favor ObamaCare.  Your message,  I gathered, was: go to your local media, they are dying to tell the self-pay story?

A:  Yes, the media is fascinated by story.  To some extent, the media regards the story as strange and exotic.   But strange and exotic is newsworthy.   Writing a story outside the box connected to a controversial national story is a no-brainer.  The story of getting health care inside ObamaCare has been written thousands of times. But getting care outside ObamaCare  offers a different and refreshing angle.  People have been conditioned to think if you need health care you have to have insurance, and that is simply no longer true.  Self-pay and direct pay challenges  pre-set assumptions. A lot of things,  like direct-self pay,  telemedicine and clinics in drug and big box stores, are now occurring outside the government and insurance systems.

Here are links where you can obtain the Self-Pay book:

Here are the links to my book, if you could include them in your blog post that would be great!

Paperback on Amazon: http://www.amazon.com/The-Self-Pay-Patient-Affordable-Healthcare/dp/0991209400/ref=tmm_pap_title_0

Kindle: http://www.amazon.com/Self-Pay-Patient-Affordable-Healthcare-Obamacare-ebook/dp/B00HBUPLFG/ref=tmm_kin_swatch_0?_encoding=UTF8&sr=&qid=

Nook: http://www.barnesandnoble.com/w/the-self-pay-patient-sean-parnell/1117760260?ean=2940148925019

Apple store: https://itunes.apple.com/us/book/the-self-pay-patient/id794031547?ls=1&mt=11

 And here is a link where you can view the video of Sean Parnell’s presentation before the American Association of Physicians and Surgeons:

Sean Parnell

Resources for The Self-Pay Patient

http://youtu.be/OGpA7n-BzQY