After attending the Free Market Medical Association meeting in Dallas recently, one cannot help but be impressed by the innovations of honest providers in making affordable, quality healthcare services increasingly available in a hostile policy environment. While big hospitals, big insurance, big pharma, and big government continue to insist that a healthcare sector that swallows nearly 20 percent of our GDP remains destitute and needs more of our money, principled entrepreneurs (often against the lobbying efforts of the “bigs”) soldier on, finding and exploiting opportunities to serve us well, and without robbing us.
Perhaps the degree to which the dominant players in health care rip us all off on a daily basis can best be illustrated by something said at the breakfast table one morning during the FMMA event by a businessman from McAllen, Texas. His is a self-insured enterprise, as are many decent-sized businesses, where one of the insurance companies is paid by the employer to administer a health insurance plan where the employer pays the bills when employees need health care, net of deductibles and co-pays. Under circumstances where one of his employees needs a major surgery, he said:
“I can waive the employee’s deductible and co-pay, give him $1,000 incentive money that he can spend any way he wants, pay to fly him and a family member to Oklahoma City, pay for a nice hotel and a limo, pay for the surgery at the Surgery Center of Oklahoma, and still save money over what one of these big hospitals would charge in or near McAllen. And the Surgery Center of Oklahoma still makes money, too!”
Another businessman by the name of David Goldhill, who wrote an eye-opening piece for The Atlantic called “How American Health Care Killed My Father,” prior to the passage of Obamacare, has established a new business that he calls “an Expedia for healthcare.” Anyone can go to the Sesamecare.com website now and find doctors and specified services for transparent prices. Currently limited mainly to Texas and nearby states and Florida, Goldhill’s plan is to soon take Sesame’s service national. His target is the 30 million middle-class Americans who are priced out of the over-priced, corrupt health insurance system, made worse by Obamacare, and not covered by the Medicaid/Medicare bureaucratic enabling system.
An entrepreneur, a retired medical doctor and son of a missionary medical doctor, has started a company called Sedera, one of several healthcare sharing companies that serve as alternatives to health insurance. His company, and others like it, negotiate cash prices for major medical services for patrons, who pay monthly as a collective for all patrons’ healthcare bills. During a side conversation, he agreed that characterizing many of the major actors in healthcare today as “thieves” was a proper use of the term.
Still another entrepreneur, who’d had a career in brokering health insurance, bothered by his conscience and seeing an opportunity, began a business consulting with other businesses to find less expensive health care options. Health insurance brokers, who are middlemen between businesses and health insurance, are paid by the health insurance companies. Their incentives are not truly to save businesses money, though that’s what they claim. This man said he couldn’t really blame people for doing what they do, given the system. He couldn’t dispute, though, a characterization of these people as “so corrupt, they don’t even know it.”
Ignorance, in some cases quite willful, as when one wants to ignore one’s own corruption, and in others quite tragic, as it turns one into a victim, is one of the biggest problems when it comes to healthcare policy. Voters often answer polls regarding healthcare out of ignorance, unaware that if we paid for healthcare directly, it would be much cheaper without any loss of quality. In fact, quality likely would increase due to the competition direct paying would engender. More aggravating is the almost willful ignorance of legislatures across the country, including Congress, who act as willing dupes to the “bigs” mentioned above.
Many rural legislators in Oklahoma and other states, some of whom serve on rural hospital boards, are convinced a key to saving rural hospitals was to expand Medicaid. They’re convinced by the administrators, who tell board members only what the administrators want them to know, that rural hospitals cannot possibly make it without more money. But what they don’t know is that there is almost no such thing as an efficiently run hospital. Two years ago, testimony was given at the Oklahoma legislature about how a small hospital, through hard work, became efficient, only to be undermined by a management firm contracted by the hospital’s board. Hospitals, especially urban “nonprofits” are full of fat and waste. Meanwhile Dr. Keith Smith, an owner of the Surgery Center of Oklahoma and cofounder of the FMMA (also a member of 1889 Institute’s board), points out that many services offered by the Surgery Center since its founding in the 1990s have never seen price increases.
Many books and articles have been written about how government has utterly corrupted the healthcare industry, and how there is nothing inherent in healthcare that makes it so unique that market forces could not improve it. But if someone could only read one, Never Pay the First Bill by Marshall Allen, published just this year, is the one to read, especially if someone is paying for healthcare out of pocket. It’s an empowering little book, full of good advice for battling the industrialized corruption of America’s healthcare monolith.
What we are seeing is the construction, little by little, of an entrepreneurial healthcare infrastructure that will be ready for rapid expansion if Congress ever has the courage to defy the “bigs” and pass real reform. What could that real reform look like? That will be subject of another blog, and yeah, it’s so simple, all that’s needed is one blog to explain it.
The opinions expressed in this blog are those of the author, and do not necessarily reflect the official position of 1889 Institute.