Surgery Center of Oklahoma Blog

A few million here and a few million there…pretty soon you are talking about real money.  The Sister’s of Mercy have gone on a spending spree.  I guess the billions they have bilked from the sick were burning a hole in their habit.  In addition to the billions they have announced they plan to spend, a 19 million dollar 50 bed rehab hospital doesn’t seem like much.  That’s right.  They’re building a rehab hospital almost across the street from Mercy hospital in Oklahoma City.  I keep reminding myself that they have to charge everyone more because of all of the indigent care they render in their emergency room.  This seems to have worked out pretty well for them in their quest to get rich not making a profit.

Try to keep all of this new construction in mind when you review your next bill from this outfit. They employee what I call the “reverse Enron” accounting method:  exaggerate your losses to maintain the fiction of not making a profit.  I will think of this little 19 million dollar rehab hospital as an ornamental jewel on a fine, massively expensive dress….an afterthought to this giant corporation.

Oh well.  Transparent and honest pricing like the approach at our surgery center is a nightmare for this scam and is sorely needed.  The not for profit hospital business model is inherently unstable and will fall under its own weight with just a tiny bit of market competition.  

G. Keith Smith, M.D.

My son had surgery last week.  It was a reminder to me how all parents must feel during this very stressful time.  My partners and I anesthetize many children at our facility and a reminder of what it is like to be on the patient’s and parent’s side is a good thing.

 I picked his surgeon by thinking through the surgeons I had seen do this surgery and make it look easy.  Picking a surgeon at our facility is very tough because there are so many great ones to choose from.  Often times when I am asked by a friend to refer them to a surgeon I base my response on personality issues and who I think they will like the best, as the skill set amongst our partners here is so far above the norm that making a referral on ability wouldn’t rule any one out!

 I narrowed the surgeon choice for my son down to four orthopedists.  I had seen these four guys do this particular operation and make it look easy.  My boy had his operation, it went well, and he is fine.  I have an insight as a facility owner and director and as a physician that few others have about the quality of my son’s experience here.  Suffice it to say that as a connoisseur of surgery center operations there is not one thing (nothing) that I would have had done differently.  It was simply a perfect experience.  My most sincere gratitude to those who helped my boy.

 As I write this I can’t help but wonder how the administrator at a big hospital would choose his surgeon.  What if he was one of those guys who had been aggressive with physicians and hostile towards them?  What if he had hired surgeons?   In my experience surgeons that are employees of big hospitals are typically the victims of hostile takeovers of their practices or surgeons who don’t compete very well in private practice.  The first guy would be angry with the administrator and the second guy probably isn’t very good.  So what would the administrator do…how would he choose?  How would he choose a facility?  Would he “take one for the team” and have his surgery at his own facility by one of his employed doctors and bet the farm that there is no difference between doctors “A” and “B?”  Or would he go to a competitor’s facility and use a reputable surgeon, knowing that was the best thing for him, but not for his business plan?

 And what would he do if something went wrong?  What if at his own facility, his employee surgeon made a mistake, the severity of which was such that the entire medical community knew what had happened within hours?  Would he begin to think that physicians and facilities disciplined by the marketplace provide better care than those protected by his cartel-like arrangements? 

 Oh well.  If this were to happen, I would wish him a speedy recovery and hope that he might entertain the possibility that as a victim of the non-free market medical world he has helped to create and maintain, there is a better way.

 G. Keith Smith, M.D.

If you want to know how “practice guidelines” can cause your death, watch this 30 minute video.  Dr. Amerling’s comments are entertaining and true.  I think he knew when he gave this lecture that non-physicians would view it later and so he attempts to make it layman-friendly.

HMO’s, Accountable Care Organizations, Physician-Hospital-Organizations are all huge advocates of “practice guidelines.”  They have to be.  You see, while advocates of these alphabet killers give lip service to cost containment, what they are really after is profit maximization.  The more “costs are contained” (the more care denied) the greater the net profit to the organization.  This design is about the viability of the “organization” not about the viability of the patient.  The Medicare goons have embraced “practice guidelines,” as well, to delay the program’s insolvency. Big hospitals love these guidelines as their payments for care are spared giant expense, resulting in much larger net profits.

Forcing these practice constraints on to an already broken system is not the answer.  The premise of third party controlled payment represents a distortion whose remedy isn’t some halloween mask like practice guidelines, but a re-thinking of the premise.  Without patients in control of the payment for their care, someone else will be in control of what care they receive.  These practice guidelines are an attempt to “save the system” from “overutilizers,” not ensure quality of delivered care.  Every patient’s disease and situation are different requiring a customized approach, formed by the interaction with that patient’s trusted physician.

Kudos to Dr. Amerling and the Association of American Physicians and Surgeons for rejecting cookbook killer medicine.

G. Keith Smith, M.D.

In the transition to a computer based patient records system, picture the following:

The nurse’s station is in an enclosed room with computer keyboards and monitors.  Technicians and aids (not nurses) travel back and forth between the patients and the nurse’s station to report what is going on with the patients.  The nurses dutifully type in the data, no time left for them to actually lay eyes on the patients they are supposed to be caring for.  Any systems analyst worth his salt already sees a “lost in translation” issue with this setup, an intermediary between the source of data (patient) and the individual acting on it (nurse).

A patient appears on the floor from the emergency room.  The emergency room clerk and nurse “entered him in to the system” when he got to the hospital.  He was taken to the floor  by an orderly and left in the hall.  The nurse tech approached him and asked him his name.  She then went to the nurse’s station and told the nurse about the patient.  He couldn’t be found in the system.  As far as the nursing station’s computer was concerned, he didn’t exist.  He was invisible.  The nurses weren’t sure what to do with him.  Whatever his diagnosis made by the emergency room physician, the nurses didn’t know.  Since no written orders or nursing notes were available (all on the emergency room computer) they couldn’t do anything with him….had no idea what  was wrong with him or what to do about it.

They finally fed him.

The above is unfortunately true.  This happened at a local hospital here in Oklahoma City.  This hospital, like others, has begun or completed the transition to a computerized patient record system, a paperless system….known to readers of this blog as an electronic medical records system.   There has been no market for this business, so the federal government essentially forced these hospitals (and physicians who accept federal money) to convert to these systems or face penalties, the most significant of which is lower Medicare reimbursement for non-compliance.  One can only wonder how much money made its way to D.C. from companies that stood to benefit from this leverage, for no one would have done this on their own.  To sweeten the pie, the government (you and I since they have no money) paid for about a third of this expenditure.  A carrot (bribe from the feds) and a stick (pay you less if you don’t take the bribe).  Ahh…business the D.C. way.  And we all wonder why health care is so expensive?  And the result?  Patients without nursing contact and invisible to “the system.”

G. Keith Smith, M.D.

On the U.S. side and all along the U.S. Canadian border, medical facilities have thrived in no small part due to the influx of Canadian medical refugees.  Tired of waiting in line for care or desperate to receive timely life-saving care, Canadians, blessed by their wonderful cradle to grave national health care system, stream across the border for medical care they are more than happy to pay for, rather than not receive the “free” care in their own country.

I can understand why someone here in Oklahoma might not be able to completely wrap their mind around the spectacle of sick Canadians lined up at the border crossing or families of these poor people in a coffee shop across the street from a hospital where their loved one, denied care in Canada due to their vicious rationing scheme, is having surgery.  What I cannot understand is how someone living and writing in Wisconsin can fail to see this.  This article by the editor emeritus of a Wisconsin newspaper shows how far we still have to go in educating people in the U.S. about what is wrong with health care here, why it is so expensive and what to do about it.  Mr. Zweifel’s article recommends giving another tequila shot to an alcoholic.  Government is the problem, not the solution.  The very presence of Medicare and Medicaid in the health care market has created a distortion in the market  and a mal-investment pattern that has caused the price of care to skyrocket.  This, in turn, created a previously unnecessary niche market and demand for private health insurance.  The idea that government can ride to the rescue for this problem or any other is either stupid or evil.  Haven’t we seen enough?  The unaccountability of government, the lack of discipline that the harsh market inflicts on failure results in the department of motor vehicles mentality, not the attitude you want your nurse or surgeon to have.  Government actually incentivizes failure, the failed program obviously not having received adequate funding initially….right?

Mr. Zweifel and those like him that believe that a single payor system is the way to go, should receive their care at the local VA hospital or at an Indian hospital nearby to get a feel for what it is they are advocating.  People from Canada are coming to Oklahoma City to our facility to receive surgery.  What other evidence of failure of the “single payor” scheme does someone need?  Don’t see many in the U.S. going to Canada for their care, do you?

G. Keith Smith, M.D.

Check this out.  A third party administrator called the Kempton Group has a large clientele composed primarily of small banks that for the purposes of health insurance are self-funded.  A close friend of mine whose self-funded health plan is administered by the Kempton Group thought that this group would be interested in the Surgery Center of Oklahoma’s transparent and packaged pricing.  He made the introduction.  He was right. 

It turns out that the Kempton group has been hoping for some time (years) that someone would do just what we have done:  post prices. Our prices are so much lower than their clients have been paying that in all liklihood their clients (including my friend) will not only not experience an increase in their health premiums this next year, but will probably see a decrease.  This is unusual in today’s environment of employer-provided health care. 

This is a first, a third party administrator agreeing to accept an invoice for a service rendered and pay the posted price without dickering and all of the usual shenanigans that wind up forcing the price of health care into the stratosphere.  No games.

The Surgery Center of Oklahoma welcomes the new and exciting relationship with the Kempton Group and looks forward to the synergies that will undoubtedly result.

G. Keith Smith, M.D.

Know people with whom you agree on most things but just can’t believe some of the stuff that they do believe?  Everyone loves freedom, don’t they? Well….until it affects their pocketbook!  Some people believe in “social” freedom but are not fans of economic freedom because an increase in tax rates, for instance, isn’t likely to affect them very much if at all.  ”Soak the rich,” they would say!  This is the granola-eating, pot smoking college professor earning an income that is probably not going to be phased by a “soak the rich” kind of tax.  This type of individual can’t believe that a rock star with no formal education (and therefore not as brilliant) can make 100 times what they do in the ivory tower teaching harpsichord performance.  Ludwig von Mises wrote a little book about academicians with earning envy called, “The Anti-Capitalist Mentality.”….I highly recommend it.  Funny thing is that if this college professor gets his economics right and understands the importance of property rights….PRESTO….he is a libertarian!

Then there is the friend who gripes about paying taxes all of the time and is all about having a smaller government but “DON’T TOUCH THE DEPARTMENT OF DEFENSE!”  Or the old fellow who is all about small government except, “DON’T TOUCH MY MEDICARE OR SOCIAL SECURITY!”

“I am all about freedom until the local river floods our community.”  ”I believe in freedom until a hurricane hits our town.”  ”I think that freedom is a great idea but look at all of this tornado devastation and think how FEMA can help.”  Know anyone like these folks?  When I was recently in Washington I ran into some folks from Joplin.  I asked them what they were there for.  They said, “FEMA payments.”  I said, “for or against?”  ”FOR,” they said!  Oh.

Physicians are typically conservative fans of small government (not all, but most).  Well….if you guessed that they are until it hits their pocket book you go to the head of the class!  I can hear the conversation in the doctor’s lounge…”….this government is out of control…spending way more than it takes in.”  Then, five minutes later…”…if I don’t get an increase in my payments from Medicare, I don’t know what I’m going to do.”  Or the guy who says, “..we need laws to keep these (audiologists, nurse anesthetists, nurse practitioners, optometrists) folks from seeing patients.”  ”But we need less government….well…ok….unless it affects my pocketbook!”  Or,”…I know our taxes are high but the government has to fund medical research!”

When I was in Washington, D.C., someone asked me what I thought about the proposed Medicare cuts.  To be honest, I didn’t even know what they were talking about.  I stopped taking federal money in 1994 and one of the bonuses was never having to worry again about what some bureaucrat in D.C. decided my services were worth.  I asked how much the proposed cut was going to be.  He said 5.9% per year for 3 years.  He was testing me.  He wasn’t ready for what I said.  I said,”  …cut it 100%.”  ”Get out of the way and let us deal with patients directly and give the market a chance to respond with some ideas for managing the risk.”

I don’t think many people are born with a libertarian philosophy.  Most people, I think, develop government cynicism from experience and make their way towards the freedom philosophy.  So many folks are almost-libertarians….what I call libertarian wannabe’s.  They lack only the smallest fraction of faith in free markets and peaceful dealings to get them there.  I believe that as more and more people realize that the government has failed us in more and more ways that they will cross the line, shed their shackles and embrace a less conflicted concept of freedom.

G. Keith Smith, M.D.

Qantas airlines is the 10th largest airline in the world.  Their employees are on strike.  Qantas management has had enough.  They started cancelling flights, even ones that were on the runway.  Now comes the fun part.  The socialist Australian government is considering forcing the airline to fly.  Ok.  Think about this.  How would you like to be on a flight conducted by a crew and pilots that don’t want to be there?

At some level the crew doesn’t find the situation with their employer mutually beneficial.  The answer for the government is to put a gun in the pilot’s ribs and make them fly?  This reminds me of an encounter I had with a surgeon years ago after I had stopped dealing with Medicare.  I had also stopped doing cardiac anesthesia as Medicare had decided to stop paying anesthesiologists adequately.  Example:  the last open heart anesthetic I did was 6 hours long and very difficult and Medicare paid me $285.  I got the message.  Medicare didn’t value my time as much as I valued my time.  The situation was simply not mutually beneficial.  Fair enough. They went too far with their price controls and the result was a shortage…..of me.

Shortly after I stopped doing cardiac cases, a cardiac surgeon found himself waiting for 1 hour for his anesthesiologist for a non-urgent surgery.  He cornered me in the doctor’s lounge.  He was angry…didn’t wait very well.  He told me that he was going to get the administration to make me do cardiac anesthesia.  I laughed.  He got angrier.  I said, “..Dr.  X, picture my preoperative visit with the patient and their family.  Imagine that I say that I don’t really want to be here, that they are making me do your case and that if they really want me to go ahead, even though I want to be somewhere else, I guess I could, or they could wait an hour for someone who wants to be there.”  ”What will they choose?”

Price controls don’t just cause shortages.  In the practice of medicine they result in an “I don’t care” attitude for those who do remain.  You seem to always get what you pay for.

G. Keith Smith, M.D.