This editorial by Wendell Potter, former public relations executive at CIGNA and currently with the Center for Public Integrity, has much to teach us. He uses the phrases “free market” and “invisible hand” for starters. He also refers to “pure free-market health care.” How about this one: “..largely unfettered, loosely regulated marketplace?”
After reading this swill, I thought it would be useful to have a “definitions” page like a legal document to introduce this piece, as his ideas about what the above phrases mean are very different than what I have always thought they meant. He says this about his past life at CIGNA:
“Insurance company spokesmen like me assured the public that our then-novel managed care plans, coupled with the invisible hand of the market, would do the trick. Leave it to us, we said, and we’ll get medical costs under control and enroll every American in a good HMO.”
Does this sound like the free market to you? Let me see. An HMO is provided by an employer not purchased by the beneficiary. HMO’s wouldn’t even exist had Nixon not granted this gift to the insurance companies (a great scheme whereby they can collect premiums and incentivize all of the players to deny care, which…you guessed it…maximizes net profits!). Employer-provided healthcare for that matter was a gift to the insurance companies as they can write one policy that covers thousands rather than many individual policies and have a minimum of sales force (brokers) due to this arrangement. Where is the competition? And what a brilliant bunch this group Potter used to work for must have been, making all these plans for the rest of us. Note he said, “we’ll get medical costs under control.” This is a view into the mind of a heavy handed central planner. He calls this the free market. He apparently believes this: that none of his or his bosses plans worked means the free market failed in health care! There’s more.
“Last week, in a piece about hospitals buying physician practices, The Wall Street Journal reported that patients are getting bills for doctor visits that are much higher than they were before their doctor’s medical group became part of a hospital system. Hospitals are charging more for physician services they now own just because, well, they can, thanks to the free market.”
In the paragraph just prior to the quoted one above he writes this:
“There is fresh evidence almost every week that our uniquely American free market health care system continues to fail us.”
He ends the piece with this:
“Considering the many failures of the U.S. health care system, it is more appropriate to wonder why the dream of a free-market health care system just won’t die.”
We could debate at this point about whether this man is ignorant or continues to be a shill for the very industry against which he was a whistleblower, as no one would gain more from a socialist system for which he pines than the few and giant insurance companies who would cram us into the same HMO’s, this time funded with tax dollars and freed of any competition, whatsoever.
His comments about hospital-billed physician services deserves some attention. The federal government recently decided to pay hospital-employeed physician services at a considerably greater rate than those same services provided by a private practitioner. Is this the free market? No, this is an attempt by the federal government to force more physicians into becoming hospital employees. The hospital lobby pays dearly for favors like this. This is not the free market. Non-hospital affiliated chemotherapy units have just been subjected to Medicare price reductions that will put many out of business while simultaneously giving their hospital pals in the same business a raise. This is not the free market. This is crony capitalism.
Is health care too expensive in this country? Is the current “system” a mess? Yes and yes! This is not because the free market has failed, however. Where the market has been allowed to work in plastic and Lasik surgery, for instance, prices have plummeted and quality has soared, just as in every other industry that must endure the brutal discipline of the market. Mr. Potter’s bosses worked very hard with government planners to make sure it never had a chance. They failed, though. The market mechanism has proven too powerful even for them and the surge of market cures for the mess this cartel has made and the desire amongst consumers for transparent and rational pricing is sweeping the country. And it is only getting started. Wait until the out-of-pocket payments to patients soar due to TUCA (The Unaffordable Care Act). People spending their own money always ask the same question don’t they: how much is it? And those who will answer them (aware that a competitor down the road will also be scrambling to answer them) will do well. Those who will not answer this common and logical consumer question will struggle or fail, just as they should.
I doubt that as quality soars and prices plummet Mr. Potter will give any credit where it is due, though. Sorry to poison your day with such an awful piece but I couldn’t let this go.
G. Keith Smith, M.D.