Sunday, March 18, 2012

What The Free Market Can Acheive

This essay was written by my good friend and President of the Florida Chapter of Docs4PatientCare, Lee Gross, M.D.

Price controls never bring down the cost of care. When a plasma television comes to market, it costs $3,000. There is a limited market at that price point. In order to sell... more, the price comes down. Then, competitors find a way to make them for less, and the price comes down. Eventually, they are $200 in a black friday special at Wal Mart.

Why doesn't that happen in medicine? It's price fix...ed and the patient is disconnected from the actual cost of care through third parties. . A pacemaker insertion costs $100,000 and medicare pays the bill. If people had to pay cash for pacemakers, how many would be installed? One? Two? But, under price controls and third party payers, there is suddenly a huge demand for $100,000 pacemakers. When hospitals and doctors and device companies realize how profitable pacemaker insertion is, many more people learn how to put them in and find new indications to put them in. Now you have a huge market for $100,000 pacemakers and the price doesn't come down a penny. You have now just spent a fortune on questionably necessary pacemaker insertions. Only free market principles and true price transparency can lower the cost of care.

The criticism of the HSA, high deductible health plans (which are being phased out by ObamaCare) is that patients often avoid getting routine care because they have to pay out of pocket and the costs are high. That is a legitimate argument. That's where a Direct Primary Care (DPC) program, like our Epiphany Health program can help. For less than you would pay for a cell phone, you can care for all of your basic health needs and insurance becomes true insurance again, rather than a health management company. When I presented Epiphany in Washington DC, I was asked what will happen if another doctor set up next to me and charged less per month, my response was that we would need to compete on price and quality. Go figure, the biggest concern was that we were going to lower the cost of care. We accomplished in a 2 page brochure what Congress couldn't accomplish with 3,000 pages of legislation and 100,000 pages of rules.

The health care reform law is estimated to cost $1.76 trillion over 10 years to "cover" 32 million people, but many of those will be the responsibility of the states under medicaid. It will also still leave 20 million uninsured. If we enrolled all 52 million uninsured people in Epiphany Health, we could have comprehensive preventive care and disease management for $39 billion over 10 years, a net savings of $1.75 TRILLION and everyone's covered with no out of pocket expenses for routine care. With those savings, you could expand medicare-type coverage to everyone for catastrophic care.

That's the power of Epiphany Health and the free market.

Saturday, March 3, 2012

Why I Joined Docs4PatientCare

Posted by me on the physician discussion website, Sermo, November 15, 2011

The Patient Protection and Affordable Care Act is in itself an intrusion on the patient-doctor relationship. But it is much more; it is the end result of a warped sense of government policies based on central planning and price controls. This law, instead of changing direction and using patient driven market forces to determine the true value of medical services, expands on Medicare’s failed concepts of artificially determining value using the Resource Based Relative Value Scale and its Update Committee. The Congress and the Executive realizing that Medicare and its inferior cousin Medicaid has forced our federal and state governments to the brink of insolvency made a failed attempt to control costs. The law instead, under the guise of subsidized health exchanges, federal mandates, cookbook medicine and supposed decreases in Medicare payments is expected by the government’s own actuaries to increase health care costs to 20-25% of gross domestic product increasing from today’s economy wrecking 17-18%.

The question for us physicians as I see it is: are we willing to allow the free market to determine the true value of our services? To me the answer is a resounding YES. There is growing evidence that patients with health savings accounts along with high deductable catastrophic insurance are much more careful about the resources spent on health care and have equal or superior results. If started at a young age using tax credits and federal subsidies for those in real need this system would dramatically decrease costs, eventually end Medicare/Medicaid, have each generation pay for its own care, provide universal coverage and free our federal and state governments from impending economic ruin.

It is time we physicians said, “Enough!” We will all join Docs4PatientCare, defeat this law and place our nation on the road to more freedom and economic development.