I’ve written several articles over the last few months on the futility of waiting for Congress or a new president to “fix” Obamacare (HERE, HERE and HERE), and I’ve made the case that state and local action remain the last hope of ridding ourselves of this unconstitutional, economically disastrous federal healthcare program. While my focus has been on government action, it appears individual action and market forces may also work to unwind the so-called Affordable Health Care Act.
Call it free market nullification.
As an article on the Mises Wire put it, instead of waiting on D.C. to fix a problem it created, the private market has taken matters into its own hands by providing options.
The Surgery Center of Oklahoma, for example, discovered that in order to offer patients the best quality care for the lowest possible prices, they were going to have to opt out of the traditional health care system all together. Prospective patients visiting the center’s website will notice that each procedure offered comes with its own set price tag. By choosing not to accept any insurance policies, the Surgery Center of Oklahoma is able to set its own prices, which often end up being more affordable than services rendered through a traditional hospital and then processed through a third-party insurance company.
The surgery center simply bypasses the onerous Obamacare mandates and expensive insurance bureaucracy, and offers patients procedures at much more reasonable prices. For instance, a “complex bilateral sinus procedure” performed by Dr. Jason Sigmon at a traditional hospital cost a patient $33,505 not including fees for the anesthesiologist and surgeon. The same procedure performed by Dr. Sigmon at the Surgery Center of Oklahoma only costs his patient $5,885, and that included the anesthesiologist and surgeon.
By avoiding the endless red tape and bureaucracy innate with third party insurance companies, the Surgery Center of Oklahoma has been able to provide patient-centered care that is centered on free-market principles rather than government mandates.
One of the most appealing aspects of the free market is its resiliency. No matter how economically oppressive a government may be, the market has always found a way to meet consumer demands in spite of crippling regulation.
The lesson: we don’t have to wait for governments to act. We can individually take steps to avoid and even undermine the negative consequences of Obamacare by seeking out and creating these kinds of options.
It also underscores the importance of state and local governments eliminating barriers that would keep practices like the Surgery Center of Oklahoma from operating. For example, several states have passed laws that specify direct primary care agreements (sometimes called medical retainer agreements) do not constitute insurance, thereby freeing doctors and patients from the onerous requirements and regulations under the state insurance code.
According to Michigan Capitol Confidential, by removing a third party payer from the equation, medical retainer agreements help both physicians and patients minimize costs. Jack Spencer writes:
“Under medical retainer agreements, patients make monthly payments to a physician who in return agrees to provide a menu of routine services at no extra charge. Because no insurance company stands between patient and doctor, the hassles and expense of bureaucratic red tape are eliminated, which have resulted in dramatic cost reductions. Routine primary care services (and the bureaucracy required to reimburse them) are estimated to consume 40 cents out of every dollar spent on insurance policies, so lower premiums for a given amount of coverage are another potential benefit.”
This represents the kind of cost control Obamacare promised, but failed to deliver. Last fall, Tom Woods interviewed a Kansas doctor who utilizes the direct primary care model. Dr. Josh Umbehr’s practice demonstrates the cost savings possible when doctor’s are unfettered from the bureaucratic health insurance system.
These direct patient/doctor agreements allow a system uncontrolled by government regulations to develop. It makes doctors responsive to patients, not insurance company bureaucrats or government rule-makers. Allowing patients to contract directly with doctors via medical retainer agreements opens the market. Under such agreements, market forces will set price for services based on both demand instead of relying on central planners with a political agenda. The end-result will be better care delivered at a lower cost.
A more open healthcare marketplace within a state will help spur de facto nullification the federal program by providing an affordable alternative. As patients flock to these arrangements and others spurred by ingenuity and market forces, the old system will begin to crumble.
