by G. Keith Smith, MD
When my children were young, I used to make up bedtime stories for them, stories they recently reminded me they remember even now. I hope you enjoy the following actually true story, many versions of which are now playing out all over the country. Stories like this may well be the only way to memorialize the quickly unraveling health cartel. I know I will enjoy retelling this to my grandchildren someday.
Once upon a time, a large tax exempt, not for profit hospital was doing a terrible job of not making a profit. While giving this profit to their already lavishly paid administrative staff would help them appear to make less of a profit, spending their money in this way rendered them less credible champions of the poor. Undeterred and loaded with bags and bags of cash and always up for a challenge, they hatched a plan to spend the millions they had taken from the sick in a way that made it look like they had once again not made a profit, while bringing in even more profit. Moving in on a nearby small town hospital competitor, they began paying above market prices to acquire all of the key physician practices in the town, choking off the referrals to the small hospital. This had the desired effect and in no time at all, the small hospital agreed to be purchased by this large hospital system, operating to this day under their banner. Newspaper headlines read, “Our little hospital has been saved by the giant!”
While the small physician-owned surgery center in this small town was more resilient, they too didn’t last long, all of their referrals choked off by the hospital’s acquisition of the local physician practices. They too, succumbed to an offer from the giant. Rather than operate this surgery center under the giant hospital system’s banner, those who had so spectacularly failed to not make a profit simply closed the surgery center. All of these purchases were accomplished with funds on which no taxes were paid and taken from sick people who were many times bankrupted to fund this expansion of the giant hospital’s vast empire.
With the surgery center closed, the tax exempt, not for profit hospital loaded with cash and having no competitors began to charge the sick ever more, even as the quality of care took a dive, as many of these patients realistically had nowhere to turn. One day a young thin, bean stalk of a man living in this town was told he needed his tonsils removed, a procedure for which his parents were to be charged $17,000 by the tax exempt hospital doing such a miserable job of not making a profit. Desperate to avoid bankruptcy, this family turned to the internet. There they discovered that a surgery center just about 2 hours down the road would perform his tonsillectomy for around $3000. This was a savings of $14,000 for driving two hours! Now while a $7000 an hour wage is paltry for a giant hospital miserably failing to not make a profit, this was significant money for this young man’s family.
They drove to the surgery center, paid the $3000, had a wonderful experience, drove home and told all of their friends. Many patients from this town have traveled down the road since and saved just as much or more by avoiding the hospital systems working so hard to fail at not making a profit. As the giant hospital roars and continues to tighten its grip, more little families slip through the hospital’s fist, traveling for healthcare to see those they can trust with both their lives and their fortunes. This young family and now countless others have together saved millions of dollars and are now living happily ever after.
Normally, I would say, “The End.” But this is not the end. This is just the beginning.
Smith MD, G. Keith. “A bedtime story: “The Rich, Fat Giant & the Free Market”.” Surgery Center of Oklahoma, Nov 2014. Web. 4 Dec 2014.