Tuesday, June 3, 2014

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 3rd 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

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