Surgery Center of Oklahoma Blog

The NEA has just endorsed the current occupent of the White House for president in 2012.  I suggest that the teachers that are members of this organization should try out Obamacare first and let the rest of  us know how it goes.

G. Keith Smith, M.D.

Should taxpayers be forced to fund medical research?  Should taxpayers be forced to fund any research at all?  The academic researcher would say (and has said), “if government doesn’t fund this who will?”  As more and more people are “looking behind the curtain” and finding that national bankruptcy is actually possible and budget cuts are unavoidable, brace yourself for the whining and gnashing of teeth from those who have been gorging themselves at the medical research trough.  See my 1995 letter here.  This comes up from time to time because honest physicians periodically scratch their heads after reading an article in a medical journal and wonder,”So? So What? What relevance does that piece of research (funded by a government grant) have to my practice….or to anything for that matter?”  It seems that lately, the shame associated with frivolous research done as a manifestation of expert grant-writing with little or no purpose at all, is gone.  Academic research departments have expensive labs and staffs and increasingly their eyes are on the next government grant, not on any particularly useful discovery.  Currently, some research department revenues support the academic clinical practice (taking care of patients) while in the past it was the other way around.  Common sense, huh?  If the government pays more for research than for taking care of patients, well, you get more research, right?  I guess my point here is that without the market driving research we are more likely to get research for the sake of research rather than research geared toward results.  I include private charitable foundations in the term “market” because the funds are not confiscated from taxpayers and thus are not politicized.

The politicization of research, an unavoidable result of government funding, has consequences.  Lobby’s and lobbyists spring up with pressure groups.  Politicians are painted as demons unless they “care” enough about this or that disease to “fund” research.  Diseases without lobbies go to the bottom of the list.  The search for a cure for this or that disease is a long process, but almost guaranteed to last forever if discovery of a cure ends your federal funding!

Here is one way  it might go:  a drug company makes large donations to the political campaign of one of the derelicts in Washington.  He leans on members of a committee in charge of funding some government grant-giver to award a lab (at an academic institution also benefitting from the largesse of this same drug company).  That academic lab does a study (and is paid nicely for this) that determines that this or that new drug (made by the above drug company) is indeed safe and effective.  What?  You think that this doesn’t happen?

How much more research money would the global warming guys get if they determined that the data showed that the earth’s temperature hadn’t significantly changed?  Maybe that’s why researchers at the East Anglia Climate Research Unit withheld data that led to this very conclusion.  See here.

Taking the market out of the research process has consequences just like taking the market out of anything.  There are mal-investments and distortions.  Research is done in one area that could (or should) have been done in another.  Failure to make discoveries is often rewarded with even larger grants.  I am anxious for this distortion to end and await the end-of-the-world arguments and whining from those cut off from this funding when it does end.

G. Keith Smith, M.D.

Several years in a row, the big hospitals got together and pushed legislation at the state level to require “certificates of need” for any surgery center or hospital that applied for a license.  The idea was that a “need in the community” for the new facility had to be shown in order for the health department to issue a license.

If you are thinking that this was simply their way of limiting their competition go to the head of the class.  Most recently at the national level, the national hospital association greased enough palms in Washington to place a moratorium on specialty hospitals and even on plans for expansion in existing hospitals.  If you think that the hospital association simply purchased protection from their competitors….well…come on this is so obvious I’m not giving out any more credit for this conclusion!  I’ve always wondered why “certificates of need” weren’t used more commonly.  Take grocery stores, for instance.  Whole foods is coming to Oklahoma City.  This is great news for grocery shoppers.  This is terrible news for the other grocery stores.  The current stores are going to have to sharpen their game and maintain competitive pricing and quality or…well..they go out of business.  Shouldn’t Whole Foods be required to show that the community needs another grocery store?  What if they are so good that some of the current stores go out of business?  Couldn’t that jeopardize the food supply?

This is the type of logic employed by the arrogant fools trying to manage our lives for us.  Apparently enough money is passed out to the Washington thugs to make this a reality for specialty hospitals.

G. Keith Smith, M.D.

What does this day mean? From what or whom did the founders declare their independence?  From a tyrannical government, that’s who.  The British tyranny of King George paled in significance to what we are seeing now, however, from Washington.  Increasingly, it seems, states are declaring their independence from Washington, D.C. I’ve noticed that this declaration is taking the form of nullification of federal laws.  States are simply ignoring federal laws or even more shocking thumbing their nose at the federal laws…. from refusal to register guns with the ATF to legalizing marijuana to the Obamacare resistance movement.

Happy 4th of July.  May the spirit of independence reign!

G. Keith Smith, M.D.

Years ago I flew to Washington D.C. for a meeting.  On the return trip I sat next to a professional looking woman and asked her what she did for a living.  She responded that she owned and operated a consulting business that helped manufacturers comply with new consumer product safety rules and regulations.  ”Wow,” I said….”and what did you do before that?”

“I ran the Consumer Product Safety Commission in Washington, D.C., ” she said as a matter of fact.  She probably did not appreciate the uncontrolled laughter that followed.  What a racket.  Invent new rules and regs that no one knows about or understands then charge them to figure out what you just did to them!  This is nothing but delayed extortion but I have also heard rackets like this referred to as a cottage industry.  Think of this as a type of parasite company that profits from the actions of the mother ship.

Cottage industries are common place these days.  They are not that hard to find or identify if you are looking for them.  All you have to do is identify some government agency or accreditation cartel and surrounding this will be all sorts of parasitic individuals and companies that have found “an angle,” or a way to capitalize on the morass of laws or regulations or rules.

No where is this more common than in the medical business.  Countless firms provide their services to help you learn new Medicare codes or companies that provide conferences or continued education for coding or billing practices consistent with new rules and regulations.  That new rules and regs are issued every year guarantees that these companies will fill the ballrooms at large hotels with those hoping to avoid running afoul of whatever authority might threaten non-compliance and the resulting penalties.

Continuing medical education is another racket that guarantees a large revenue stream to academicians in medicine, many of which are impossibly poor communicators and most of which are conducting research that only the government would fund.  This is another topic by itself I’ll address soon.

All of the above is leading up to the following:  the Journal of the Association of American Physicians and Surgeons just outed a huge racket:  the American Board of Medical Specialties.  This is the outfit that issues that special stamp that physicians increasingly have to have:  board certification.   This process is extraordinarily costly (I know because I went through this fiasco in 1990).  By the time you pay the board and the various cottage industries that have sprung up to help get through this you have spent an incredible amount of money.

In this month’s journal (available online free of charge, here) Martin Dubravec, M.D. brilliantly dissects the cartel and cottage parasite, the ABMS.  Though their assets are north of 57 million dollars (whoa! that’s right) their thirst for loot has not been slaked (note that not satisfied with making everyone pay to become board certified, they were able to float board recertification for many specialties!).  Their latest ploy is to team up with state licensure boards to require “maintenance of certification” status in order to preserve a medical license.  Make no mistake.  If the ABMS says” it’s not about the money, it’s about maintaining the quality of medicine practiced”…….well…..it’s about the money!  The ABMS knows that no one would do this voluntarily so they figure that they’ll just make everyone do it!

If Dr. Dubravec’s article is widely read and circulated the ABMS may find that they have overplayed their hand.  This article is a bold factual outing of a gang for which shame is not possible.  Congratulations to the author and AAPS for publishing it.  I eagerly await the AMA’s rebuttal!

G. Keith Smith, M.D.

What are people in this country supposed to think when the AMA endorses a single payor government health care scheme?  Doesn’t that mean that the physicians are by and large in favor of it?  Or is it possible that the AMA is not on the same page as the physicians?  But if the AMA is charting a course that is not consistent with the wishes of the physicians, wouldn’t that affect their membership and hence their revenue?  This would be institutional suicide, wouldn’t it?  Unless…..well unless the AMA’s revenue didn’t depend on the physicians.  What?  Where does their money come from then?  If you guessed the federal government, you go to the head of the class!  Yes, that’s right.  Back in the early nineties when Medicare forced a new method of calculating physician payment (it was called the RBRVS…resource based relative value scale and was the result of  the efforts of academicians at Harvard), the government wanted the AMA on board, that is, they wanted the endorsement of the AMA.  They got it.  The feds bought it.  The AMA was granted an exclusive contract to print the code books that everyone had to use (…cough…buy!), freeing them from any future need to craft policy statements consistent with their membership’s wishes.  All they had to do was say whatever the feds wanted them to say and their revenue was secure.  Of course this is a two-edged sword.  If the AMA didn’t say what the feds wanted them to…well…that’s right, they would put their juicy contract in jeopardy.

Single payor system?  Any honest physician will tell you this is a disaster.  But the feds gain credibility with an AMA endorsement…which they were able to buy.

Who should the American people look to as representative of the average physician’s wishes or views, then?  If the AMA doesn’t represent the physicians, who does?  The Association of American Physicians and Surgeons is the only group I know of that represents physicians free from the bribes and shackles of the feds.  Their efforts (primarily those of Dr. Jane Orient and a brilliant lawyer Andrew Schlafly) brought the Clinton health care plan down.  They are fighting a tough fight right now against the new threat, Obamacare.

Check out their website.  And remember, whenever the AMA endorses anything, their compromised status must be kept in mind.

G. Keith Smith, M.D.

Wow.  Just when I thought there couldn’t be any more to say about this mess the local newspaper reveals that the head of a state agency administering state-funded health care to the poor (and an agency that has cut benefits to the poor) has bestowed a gigantic bonus on their agency chief.  This guy’s great achievement?  Setting the hook on the taxpayers for the provider tax, a tax that will be collected by his agency that in return will retain huge amounts of this tax to compensate them for this effort.

And what will be done with this money?  It will go to the poor hospitals that have to “take all comers!”  Like the hospital in today’s paper that is building spa-like ER’s in two locations and just spent $200 million in revitalization efforts at their main hospital.  What?  $200 million?  Where do they get $200 million dollars?  Did someone say that they needed more money to take care of the poor?  Seriously?  Have they maybe slightly overdone the cost-shifting thing a bit?  How much care would $200 million dollars provide to the poor in Oklahoma?

G. Keith Smith, M.D.

I didn’t think it was possible for it to happen again so soon.  What am I referring to?  A local hospital (and once again, not one known for providing affordable care to the uninsured)  came within $10 of our internet price for a gall bladder removal.  The patient, no fool, though, realized that our price was inclusive and that the hospital quote was once again for the facility, only.

The importance of this trend here in Oklahoma City cannot be overstated I think.  This hospital was not quoting a fee representing an amount at which they were losing money.  They were, quite simply, afraid of losing this surgical case to a competitor that has posted their prices online…..US!

I hope this continues.  What a great development for those needing health care services in this area!  And then, as I have pointed out before, there is, as Bastiat would say, the economic benefit of “what is not seen.”

G. Keith Smith, M.D.

Why is it that when you enter your place of work your health insurance no longer applies and “worker’s compensation insurance” takes over?  Why is it that when you enter and start your car that anything that happens to you there is no longer covered by your regular health insurance?  Why is it that when you turn 65 your insurance no longer covers you and you must go on the Medicare dole?  What is going on here?  How did all of this come about?

The great intellectual  economist Murray Rothbard encouraged us to utilize the concept of “who benefits,” or cui bono, when trying to figure something like this out that at first might not make sense.  This is very useful when unravelling political dealings:  just start with the question, “who benefits”  from this or that policy or law and you are well on your way to getting to the bottom of the mystery.  Who benefits from all of the risk of the workplace or the car or old age being carved out of your regular health insurance?  If you said, “my health insurance company,” you go to the head of the class!  Think about it.  If you ran an insurance company and were trying to maximize profits, you would collect as much premium as you could and you would reduce your exposure or risk to the extent that you could.  Every move that reduced your insurance company’s exposure to risk would increase the likelihood of a profitable venture.  Many political successes and fortunes have been made due to enabling the insurance industry in these efforts.

Is this an example of cost-shifting?  I don’t know why not.  Big insurance companies have shifted the costs and liabilities of workplace injuries, car wrecks and the health problems of old age away from their balance sheets and to ours.  Now we must buy worker’s compensation insurance, automobile liability polices with health coverage and the public is bankrupted with Ponzi schemes like Medicare.

I thought of this while watching the latest political theatre surrounding the reform of worker’s compensation here in Oklahoma.  The smoke screen resulting from the discussion of all of the meaningless details keeps most folks from thinking about the above questions.

Why not have our health insurance cover us all of the time and eliminate worker’s compensation?  Oh well, this idea never had a chance during the last legislative session here in Oklahoma.

G. Keith Smith, M.D.

Two days ago an amazing thing happened here in Oklahoma City which was not reported by any of the television stations or by any newspapers.  This event went completely unnoticed just as those involved hoped that it would.  I have predicted that this would happen but never thought in my wildest dreams that it would happen this quickly.  A local hospital quoted a surgical fee to an uninsured patient at…. the exact, same price as ours as listed on our website.  Why is this significant?  Ask someone without insurance who has ever had surgery and tried to get a fixed price from a hospital prior to their procedure and you will get the same answer every time:  ”they wouldn’t give me a price.”  That this particular uninsured patient was given a price guarantee up front by a local hospital in and of itself is incredible and earthshaking in the medical pricing world.  That’s just the beginning though.  Hospital pricing (when it is given which is rare) is typically 3-6 times our pricing depending on the procedure.  What does it mean that a local hospital quoted a more reasonable fee?   What does it mean that they quoted the exact same fee as listed on our site?  Could it be that the big hospitals are feeling some pricing pressure?  Is this a good thing for the community?  Have you ever been in a position where several salesmen were fighting for your business?  Isn’t it common sense that the more they compete the better off you are?  Margins are typically whittled down until one of the parties doesn’t care whether they lose the business.  It’s the same as when you are selling your home and two bidders are fighting over it…the more they squabble the better off you are.

In this particular case a $5000 price was quoted (it wasn’t exactly $5000 which is why the odd number quoted got my attention).  This particular hospital isn’t known for bargain pricing and would normally have charged about four times this amount (having been in this business since 1997 I have seen my share of hospital bills from disgruntled patients and have a pretty good idea about the price multiples at various facilities and big hospitals). That means that they have discounted their fee by ten to fifteen thousand dollars…..and still want the business! As usual, though, the hospital didn’t quite get it right and lost the case to our facility.  Why?  Because their quote was only for the facility.  Our price included the surgeon and anesthesia charges.  The patient got in to see the surgeon the day after he called our facility and will have surgery here early next week.

I am trying not to overstate things here but I hope readers understand the significance of this event.  Even if the patient had gone to this local hospital, they still would have saved at least $10000 because of  the competition generated by the price transparency at our facility. The benefit to the uninsured patient  paying their bill is obvious.  The value of the introduction of price competition in the medical marketplace is incalculable.  As F. Bastiat would remind us, what is not seen is the productive result of the use of  the $10000 saved.  We at the Surgery Center of Oklahoma welcome this development and hope more will join this local hospital in an effort to provide affordable health care and enter the arena of free market pricing.

G. Keith Smith, M.D.