Posted in Access to healthcare, advance-pricing, Economic Issues, Health Insurance, Healthcare financing, Medicaid, Medical Costs, medical inflation, Medical Practice Models, Medicare, out-of-pocket costs, Patient Choice, Price Tansparency, Quality, Uncategorized

G. Keith Smith, M.D. — Health “Coverage” as a Distraction

I think it is good to be alert to any discussions that are “downstream of a flawed premise.” Let me explain.

When I hear, for instance, that the “flat tax” is preferable to the current income tax, I think to myself that this is a discussion of the knife versus the axe, a conversation far downstream of one addressing government spending or the very legitimacy of denying someone their earnings. After all, victims don’t generally care what the mugger does with their money. They just resent being mugged and no discussion about whether the mugger used a knife or a gun will likely provide any solace.

Similarly, I would argue that arguing for everyone to have health “coverage” is far downstream of the more original problem: the cost of healthcare. To provide “coverage” for everyone in the current climate of gross overcharging primarily serves the interests of those who employ the “what can I get away with” method of medical pricing.

The fierce push back against true price transparency by the cronies in the medical industry makes more sense in this context, as price honesty denies them access to everyone’s blank checkbook as the health cronies are well aware.

Supporters of government-guaranteed “coverage” object with the following arguments.

First, coverage is equated with healthcare. While millions of Canadians streaming across the border to secure their health needs could be used to refute the idea that coverage is synonymous with care, this disconnect has become more apparent in this country. Each passing day reveals Medicaid and Medicare “coverage” to be a “black mark,” an actual obstacle to obtaining care, as these government programs and their associated rationing through price controls and hassles are creating the lines the central planners intended. Physicians are either dropping out of these programs altogether or they are limiting their exposure to patients with this “coverage.”

Another objection points to the relief from financial devastation that having “coverage” represents. Keep in mind that not only are well over half of the bankruptcies in this country medically related, but almost three quarters of those filing for medical bankruptcy have insurance. This points powerfully to cost as the root cause of medical economic ills.

Acknowledging this is a slippery slope for the objector, however, for no economic system better provides for resource allocation than the market and the cronies and their government pals know this as well as anyone.

The market is the only source of price deflation with simultaneous improvement in quality. This powerful competitive mechanism has brought affordability to countless products and services in all industries and has begun to bring rationality to health care pricing as more physicians and facilities honestly post their prices for all to see.

Rather than focus on “coverage,” which allows the cronies to continue their financial feeding frenzy, we should remain unalterably focused on cost. The competition unleashed will result in a medical price deflation the likes of which will cause even the most skeptical objector to re-evaluate the role of “coverage” in the provision of payment for health care.

This is no prediction. This is exactly what is happening here in Oklahoma where so many health professionals have embraced the same market discipline every other industry must endure. The reasonable prices and high quality of care, have had such a wide appeal that Oklahoma City has evolved into a medical tourist destination for many patients far from here, while simultaneously bringing savings in the millions of dollars to those who actually pay for healthcare, locally.

This is my answer to another objection from those who claim the inapplicability of market competition to health care.  Whether the focus on “coverage” is a deliberate distraction by the crony propaganda machine or a well-meaning but misguided attempt to provide better access to care, we must keep our eyes on the “price transparency ball.” The Oklahoma market is already harshly judging those attempting to avoid this gaze and I believe this trend will continue as long as we identify, challenge and reject conclusions downstream of their flawed premises.

Posted in Affordable Care Act (ObamaCare), CPT billing, Crony Capitalism, Economic Issues, Free-Market, Government Regulations, Health Insurance, Insurance subsidies, Medical Costs, Medicare, Policy Issues, Reforming Medicare, Tax Policy, Uncategorized

Watch “Milton Friedman – Monopoly” on YouTube

The Healthcare industry, or medical-industrial complex, wears the armor of Government-sponsored protectionism; chinked together by pieces of the tax code, The McCarren-Ferguson Act, Certificate of Need laws, Medicare billing regulations, HIPAA, HITECH, and the ACA.

You would be hard pressed to find a more entrenched, impenetrable cartel.

Posted in Access to healthcare, Economic Issues, Education, Government Regulations, Healthcare financing, Influence peddling, Medical Costs, Medical Practice Models, Organizational structure, outcomes, outcomes measurement, Policy Issues, Protocols, The Quadruple Aim, The Triple Aim, Uncategorized

Aim your baloney detector at the BS in health care – STAT

BS, what Princeton philosopher Harry Frankfurt once calleda “lack of connection to a concern with truth — this indifference to how things really are,” has probably been around since the beginning of language.

Health care has an acute BS problem, in part because BS can sometimes fill the bill.

“Suppose you are asked to address an ageless problem in health care: reduce costs while simultaneously raising quality. If you were knowledgeable to begin with or did some research, you would know there is no easy solution. You could respond with a message of failure or a discussion of inevitable trade-offs.

But you could also pick an idea with some internal plausibility and political appeal, surround it with careful but conditional language, and launch a program. It will, you note, take several years before it is successful, but you and your colleagues will argue for the idea in concept, with the details to be worked out later.

At a minimum, unqualified acceptance of such ideas, even (and especially) by apparently qualified people, will waste resources that could have been used to make the best of what we currently have, and will lead to enormous frustration for the audience of politicians and outraged critics of the current system who want answers and want them now.

The incentives to generate BS are not likely to diminish — if anything, rising spending and stagnant health outcomes strengthen them…

…educator, media theorist, and cultural critic Neil Postman said that “helping kids to activate their crap-detectors should take precedence over any other legitimate educational aim …
We have carried Postman’s banner into academia with two reports, one in 2018and another this year, that identify 21 different forms of BS in health care. Here are our top 10:”

Posted in big government, Dependency, Economic Issues, Government Regulations, Government Spending, Liberty, Policy Issues, Tax Policy, Uncategorized, Wealth, Welfare State

What’s Required to Finance Roads, Schools, and Healthcare? | International Liberty

To elaborate, not only do jurisdictions such as Hong Kong and Singapore enjoy impressive growth, they also get very high scores for infrastructure, education, and health outcomes.

In other words, these nations are role models for “public sector efficiency.”

What they don’t have, by contrast, are expensive welfare states that seem to be correlated with poor outcome for basic public services.

Posted in Access to healthcare, Economic Issues, Government Regulations, Health Insurance, Healthcare financing, Medicaid, Medical Costs, medical inflation, Medicare, out-of-pocket costs, Policy Issues, Uncategorized

The Pernicious Impact of Government Intervention in Healthcare, Captured in a Chart

AdministratorGrowthVS.PhysiciansAs Dan Mitchell mentions in his post, much of the dysfunction we witness in healthcare are simply symptoms of the distortions that arise when we rely on a third-party payer system, with heavy government involvement, and all its perverse incentives which distort decision making for all participants. And so often the proposed “fixes” are aimed at mitigating symptoms caused by the third-party effect, rather than peeling back the layers to get to the root cause. Is it any wonder things aren’t improving despite billions and billions of subsidies, massive intervention, regulations and various forms of scrutiny!

International Liberty

America’s healthcare system is a mess, largely because government intervention (Medicare, Medicaid, Obamacare, and the tax code’s healthcare exclusion) have produced a system where consumers almost never directly pay for their medical services.

This “third-party payer” system basically means market forces are absent. Consumers have very little reason to focus on cost, after all, if taxpayers or insurance companies are picking up the tab for nearly 90 percent of expenses.

As a result, we get ever-higher prices.

But we also get a lot of featherbedding and inefficiency because providers want to take advantage of this system.

Athenahealth offered some sobering analysis on the system last year.

The number of physicians in the United States grew 150 percent between 1975 and 2010, roughly in keeping with population growth, while the number of healthcare administrators increased 3,200 percent for the same time period.

View original post 241 more words

Posted in Access to healthcare, advance-pricing, Consumer-Driven Health Care, Direct-Pay Medicine, Direct-Pay Practice Models, Doctor-Patient Relations, Economic Issues, Employee Benefits, Employer-Sponsored Health Plans, Health Insurance, Healthcare financing, Independent Physicians, Liberty, Medical Costs, medical inflation, Medical Practice Models, Network Discounts, Organizational structure, out-of-pocket costs, outcomes, Patient Choice, Patient Safety, Policy Issues, Price Tansparency, Quality, Self-Insured Plans, Third-Party Free Practices, Uncategorized

A Brief History of the Free Market Healthcare Movement: A discussion with Jay Kempton & Dr. Keith Smith

by Megan Freedman – Editorial Manager, Free Market Healthcare Solutions magazine

These names are, in many ways, synonymous with the current free market movement, and for good reason. These men are the mavericks of healthcare. When Dr. Smith and Mr. Kempton were introduced in 2011 by a mutual friend and client, they had no way of knowing that their partnership would become what it is today and create an entire movement in the healthcare space.


Jay.Keith.headlinephotoJay Kempton: When you understand how this business really works, you can see the effect of the dysfunction which I just described; but when you learn more about the cause, you can see that the patients’ actual financial concern is not even on the radar of so many entities that are part of big healthcare.  Hospitals really do not understand that the gouging of pricing that they do trickles down into basically wage stagnation to employees. They say, “We’re raising our prices, but it only hurts the big insurance companies.”  No, that’s never the way it works.  It eventually makes it way as an increased cost to the employer. They can’t afford to just absorb the increase, so how do they offset that?  By lowering or decreasing the increase of wages or they reduce the benefits, or both.

What is the greatest obstacle that this movement and the FMMA faces?

Dr. Keith Smith:    The answer may be counterintuitive.  I think the greatest obstacle the FMMA and this movement faces is ourselves. We are so programmed and conditioned to look to outside leaders or to the government for solutions and answers. They are ultimately responsible for all the problems that have led to our current system.  The answer is looking to ourselves and having the courage to face the possibility that, in innumerable ways, we have been duped. Admitting that is a very personal and difficult experience for many people—to look in the mirror and acknowledge that they’ve been lied to. Even worse, we have believed these lies and have acted accordingly.  People must acknowledge that it is a ground up movement, not one where solutions rain down on us from our rulers or our leaders. They must do their own thinking and not allow those who would like to be protected from innovation to stop us.

Jay Kempton: The obstacle that’s not so benign is how people in the healthcare business get paid.  Brokers, consultants, and agents have tremendous influence over employers and patients, and the way that they see healthcare.  Many people in the employee benefits business get paid when they make money off the problem. In other words, they’re making a percentage of the healthcare spend.  The problem gets bigger, their income goes up. 

If you could tell someone just one thing about the free market in healthcare what would it be?

Dr. Keith Smith: The one thing I would tell them is that the free market is not about sellers having their way with consumers.  The free market is not about brutalizing the poor, or people who are trying to pay for their own care.  
The free market is about an exchange between buyers and sellers that is mutually beneficial, where both parties emerge feeling like it was a good exchange. Any time that the media quotes some corporate healthcare exec or politician bemoaning the tough future that one of the sellers might face given some policy that might be enacted should be discounted or ignored. The focus has to be on the consumer, and on whether a consumer’s decision to buy A or B is a value to that person.  The one message that I would give is to know that this movement is about servicing consumers. Period. Any concerns or desires that sellers have to be protected from the preferences of consumers must be seen as the source of the problem that we all face in health care today.

Jay Kempton: The free market and healthcare is the only true healthcare reform that has a chance of being sustainable. Anything else is just rearranging the deck chairs on the Titanic.

Posted in Access to healthcare, advance-pricing, CPT billing, Direct-Pay Medicine, Direct-Pay Practice Models, Economic Issues, Education, Employee Benefits, Employer-Sponsored Health Plans, Health Insurance, Healthcare financing, Independent Physicians, Medical Costs, medical inflation, Medical Practice Models, Policy Issues, Price Tansparency, The Quadruple Aim, The Triple Aim, Third-Party Free Practices, Uncategorized

The Change We Seek We Must Create

lightbulb.solutionsThe reach and effectiveness of healthcare innovation and change is ultimately staked to how we pay for healthcare in aggregate. Building economic paradigms with more attractive price-value relationships will be the conduit through which change will emerge.

1.Employer education & engagement about the benefits of alternative health plan design based on maximal uncoupling from the BUCAHs.

2. Promoting opportunities for physician independenc apart from the price-concealing contractual third-party payment arrangements, and their co-conspirators, the giant NFP hospital systems.

3. Promoting / facilitating specialty and ancillary service cooperation / agreements which provide them revenue alternatives to the standard price-gouging CPT insurance billing protocols.

Posted in Access to healthcare, CPT billing, Disease Prevention, Doctor-Patient Relations, Doctor-Patient Relationship, Economic Issues, Evidence-based Medicine, Health Insurance, Healthcare financing, Medical Costs, Medical Practice Models, Medicare, Patient Safety, Policy Issues, Prevention, primary care, Protocols, third-party payments, Uncategorized

Over-reliance on Health Insurance Can be Hazardous to Your Health: A Case for DPC

By Robert Nelson, MD


Despite its own admission that Flu Vaccine is, at best, only 40 – 60% effective at reducing risk of Flu-like illness, the CDC repeatedly lists receiving the Flu vaccine as “step one” in prevention. This recommendation also acknowledges the caveat that the effectiveness of immunization will be less if the vaccine is not well matched to the dominate circulating strains of Influenza in any given Flu season. Yet Medicare has deemed it so important that they cover it at 100% despite its low cost and not-so-stellar prevention record.

Given that the mode of transmission of Flu is mainly person-to-person contact, it should not be a surprise that the next bit of preventive coaching that the CDC offers to patients with suspected Flu (and probably the most important admonition) is to STAY HOME.

“…people should stay away from sick people and stay home if sick.”

This advice to “stay home” is very important to curb the spread of the Flu, because it is quickly passed by large-droplet particles that result from coughing, sneezing or blowing your nose. The range of these briefly airborne particles is about 6 feet. But once they land on a surface, these virus laden particles can remain infectious for many hours. Considering the short incubation phase of about 2 days, Flu can spread exponentially if a short time.

With these facts in mind, does a typical crowded waiting room in an urgent care facility or doctor’s office during Flu season make any sense at all? Those who have been tracking this know that the number of patient encounters this year for Flu-like illnesses is off-the-charts high.

Yet despite Grandma and the CDC telling us to eat our chicken soup and stay home, we see the opposite behavior by many patients. It seems odd to me that people would do this voluntarily, let alone eagerly, if they had a reasonable alternative for treatment. But it seems there is a paucity of alternatives and/or an unwillingness to utilize them.

Yet most of my colleagues agree with the CDC’s advice and few would argue that it is too cavalier or risky or depriving patients of adequate care. The subset of patients who are at high risk for Influenza-related complications are well delineated and can be selected out for more intense screening or special follow-up.

Let’s take a deeper dive into the reaction from large group providers. First, here is what they DO NOT DO.

I am unaware of any major vertically-integrated providers of outpatient medical services, who relies on insurance payments as their main source of revenue, which has signage on their door or any published educational information that discourages patients from filling up the waiting room; this is despite the obvious risks to patients and others! And most insurance-based practices do not overtly offer reasonable common sense screening protocols via phone, email or secure texting designed to triage those who need to be seen promptly and who can/should stay home.

Now consider how over-booked insurance-based practices and nurse advice hotlines respond to multiple patient calls about Flu-like symptoms? Too often is goes like this…”Oh, it sound like Flu, you should go to the urgent care to be tested and get Tamiflu if your flu test if positive!”

There are major flaws in this knee-jerk institutional advice which lead to bad decisions and a lot of unnecessary testing & treatment. First, the sensitivity of Rapid Influenza Diagnostic Tests (RIDT) is not high enough to be a reliable exclusionary test. And when prevalence of Flu is high, the predictive value of a negative test goes down as the predictive value of a positive test goes up (telling you what you already suspect). And when the clinical symptoms of the Flu strain are well known, the predictive value of the clinical symptoms in the face of exposure is often as accurate as testing (as proven by subsequent RT-PCR). Second, the benefit of Tamiflu in curbing symptoms after 24 hours of fever is less than impressive. While it does cut down on viral shedding, which may be its main attribute, the false sense of security that many patients attribute to the medication may lead to them returning to normal activity too soon or be less than diligent about taking adequate precautions. Third, if they do actually have the Flu, then by urging them to “get checked” we have potentially exposed other patients and the medical staff unnecessarily. And if they don’t have the Flu, they may catch it while waiting to see the provider for what is likely to be an unwarranted visit. Indeed, much of the intervention that is pushed, and expected, serves only to propagate and prolong the public health threat that we are alleging to mitigate.

Why do patient behaviors and practice patterns deviate so drastically from the common-sense advice that we all grew up with, the same advice that the CDC stresses? Once you over-come a few misconceptions about risks, along with setting some follow-up parameters, it all comes down to a misuse of what could otherwise be a useful financial tool that we call health insurance.

More specifically, it is the inefficient way we use health insurance for routine care that is ultimately responsible for the misuse. I call this process “Fee-for-Coding”. As my friend and colleague, Jed Constantz, is fond of saying…“this leads the patient to chase the benefits and the doctor to chase the codes.”

These two distractions arise from the perverse economic incentives faced by the provider and the patient within the Fee-for-Coding system. The consequence being that only perfunctory consideration is given to the clinical utility of the intervention because the financial incentives are not properly aligned; this often leads to inappropriate or excess interventions, inappropriate referrals, delayed care, or care rendered in the wrong venue.

Fee-for-coding (FFC) has wreaked havoc in healthcare due to three intrinsic characteristics, all of which increase costs and over-burden resources. Our FFC/CPT billing system causes: 1) price insensitivity on the recipient’s part leading to indiscriminate and excessive consumption on aggregate. 2) Misaligned incentives on the provider’s part leading to over-testing and over-treating. 3) Lack of important value-determining price signals between buyers and sellers due to lack of advance pricing capabilities.

Contrast that conundrum with a real scenario I had today which highlights the utility and effectiveness of patient-centered care rendered outside the confines of the third-party payer contract: A Direct Primary Care arrangement with ability to provide home visits when needed.

A married couple who are members of my practice also pay membership fees for their sons and spouses who work part-time in their family business. The husband’s mother, who is 88 years old and in reasonably good health, lives with them. She has a doctor in South Carolina whom she sees rarely for routine check-ups. She does not have a local physician and is not a member of my practice. She slipped getting out of the shower today, hitting her head on on corner of the wall resulting in a 3 cm scalp laceration without any other apparent injury; she is not on anti-coagulants and had no clinical signs of concussion. When they got to the local Urgent Care facility, they were told she could be “evaluated” but they would not stitch or staple any wounds above the neck! You know, kind of like a “dental monitor” who diagnoses cavities, but doesn’t fix them! They were advised to go to the ER or another UC that might possibly suture the cut if needed.

Did I mention that it is Flu season and the waiting rooms are packed full of sick people?

Following this revelation, her daughter-in-law sent me a text about the situation to see if I would be willing to see her. By this time, they had arrived back home. I called to discuss her injury and it seemed reasonably certain that there were no serious symptoms and no orthopedic injuries. I agreed to evaluate her at home to avoid an ER visit for what seemed to be a fairly minor, although time sensitive, injury which required evaluation the same day. I reminded them that I did not submit bills to Medicare and that my fee would be $80.00, and I would waive the travel fee since they were member patients.

So, after a brief discussion and history and brief exam, plus 5 staples to close the scalp wound and a 45 minute round trip… she is convalescing at home. The family is vigilant and they have my number for 24/7 access if questions or new symptoms.

Had she presented to ER, it may have meant a couple hours in the waiting room and exposed to all manner of illnesses. And based on her age and medical-legal influences, there is about a 40 – 50% chance that a head CT scan would have been ordered. So the bill would have been $1,000 – $1,200 on the low end, or up to possibly over $3,000 on the high end if CT was performed. Not to mention a very high chance of contracting Flu given the current high levels in the community.

Alternative payment models like Direct Primary Care (DPC), sometimes called membership medical care or insurance-free cash practices, don’t have to depend on billing encounters in the office to drive revenue. This liberates the physician and staff to provide the right care at the right time via the right modality; whether that be in-person, over secure texting app, phone, video or even a house call.

With DPC and similar practice models, the artificial constraints and moral hazards of insurance based Fee-for-Coding disappear, replaced by the satisfaction of helping to solve our patient’s problems as life happens and within a non-rushed, lifestyle friendly atmosphere.