Feb

7

A look at last night's highly enlightening talk by anesthesiologist Keith Smith and co-founder of the Surgery Center of Oklahoma, who spoke about the tremendous cost of health care and how he is profitable while charging one fifth to one tenth what traditional hospitals charge for the same procedures. He is an advocate of free markets and price transparency and publishes prices for procedures directly on his website. This is a good article about his work.

Smith explained how insurance providers make more money repricing claims than they do collecting premiums. Incentives are in place for the insurance carriers to seek out the highest cost providers.

He explains it like this on his blog:

Nobody talks about this one: PPO repricing. You see, some PPO's (actually all of them I think) charge PPO repricing fees. This means that if the PPO pays $10,000 to a facility for a surgery or hospitalization that the facility charged $20,000 for, the PPO, by virtue of having "repriced" this procedure or hospital stay, gets a percentage of the money they" saved" whoever was paying the bill…usually no more than 25%.

"Wait a minute," you say! "You mean the PPO collects the premiums, then maximizes their profit by ratcheting down the payment to the physician and facility but also makes a percentage on the difference between the beginning and ending bill amounts? So the higher the bill is to start with, the more they make?"

I was amazed to learn that surgeons can perform the same procedure at Smith's Surgery Center and at the hospital across town and get paid more for their work at the Surgery Center than they do at the hospital.

Smith is disgusted with the fact that the current healthcare system is a syndicate or cartel that rigs the system and is bankrupting us in the process. He explained how Obama Care is only going to make things worse. However, he ended on a very positive note stating that the government does what it always does and screws things up so badly that the system will collapse on itself and people will find new ways to save on healthcare.

Smith ended by paraphrasing Camus and reminding us that

"The welfare of the masses has always been the alibi of tyrants."

(the actual quote: "The welfare of the people in particular has always been the alibi of tyrants." - Albert Camus)


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