A Healthcare Revolution is Coming – Can You Smell It?

You know when the first snow of the year is coming because of that crisp smell that permeates the air? You know when a nice spring rain is going to start and the fresh smell intensifies? But what is the smell of a revolution beginning? Judging by what happened recently in Ft. Worth Texas, it is the smell of hotel catering and freshly printed vinyl banners. 

Two weeks ago healthcare entrepreneurs from across the country came together in Texas to discuss their business models – present data on the emerging markets – and figure out how all might work together to supercharge a revolution in the industry. This is the Free Market Medical Association.

The problem to be solved? The healthcare system is broken. It is an awkward mix of public and private buyers, both of whom have encountered bad incentives leading to low quality healthcare at the highest possible prices. Competition has been drained from the system by a regulatory maze that discourages innovation and encourages cronies to milk the system for everything that it can without providing more or better care.  In addition, and with government’s assistance and blessing, the hospital and insurance cronies, having seized system control, have figured out how to maintain control – and make even more money. 

Congress has been debating this issue for decades while the system continues to deteriorate. During the Obama administration the Democrats held a supermajority and couldn’t pass a bill on which they could all agree. Once their supermajority vanished they inflicted a half-witted compromise on the country that somehow actually made the system worse – creating more layers of middlemen and even more regulation. The politics of the right aren’t much better. In fact, if all the democrats went home today, the Republicans wouldn’t be able to agree on a solution either. 

There are some public policies that could help. John Goodman and Charles Sauer have been working on providing the flexibility that patients need by freeing the patients and freeing the doctors. Brian Blasé at Paragon is currently working on a quality agenda. Dean Clancy of Americans for Prosperity has proposed the personal option – which is consistent with the other policy proposals and effectively allows, and incentivizes, more people to opt out of the status quo and use more innovative healthcare solutions. However, these ideas and policies are still years away from even the possibility of passage and frankly represent repeal of prior policy, the obvious way forward.

The problems in healthcare are real, but fortunately so is the money involved. 

Market disconnects in any industry, healthcare included, represent a “bat-signal” for savvy entrepreneurs.  They might not necessarily come to save the damsel in distress, but by solving the problems in the market – they end up saving the damsel through government work-arounds and saving patients and self-funded clients astonishing sums.

With this in mind this group of mild-mannered business owners and doctors set out to discuss what they are doing that Congress has proved inept at doing – innovating. There are self-insured business owners who have sought out and discovered cheaper and better ways to provide healthcare and insurance to their employees, avoiding the traditional system paths. There were doctors figuring out how to best work with these companies. And, there were the important service providers who have figured out how to actually get these two groups together. Regions of the country now have compelling and tangible results.

Just 12 years ago – this would have been a much smaller room, and in fact, 5 years ago it was a smaller room. But, now as healthcare costs continue to rise and quality continues to degrade – the room and the demand is growing. 

That is how we know that the revolution is happening. 

It isn’t going to be easy and like any revolution all involved know that there are going to be fights ahead. The trolls in government can’t rescind favors granted without blowback from the crony cartel they’ve created. The healthcare cartel is going to fight back. 

In many ways they already know that they are in the fight of their lives. The healthcare industry has attempted – and been fairly successful – at keeping any further expansions of healthcare sharing arrangements out of public policy since they had a big win inserted into Obamacare in the final hours. Hospital systems have reversed decisions by states to engage with innovative healthcare business models that saved taxpayer money while increasing quality. Direct Primary Care legislation has always had poison pill language added to it before passage has been possible. Additionally, it took a pandemic for states to release the cartel’s control on the amount of “need” in states opening up more supply from surgery centers around the country. These are desperate and fearful acts “bat signaling” those with innovative solutions.

Fortunately, entrepreneurs aren’t waiting on Congress to act and the revolutionaries have accurately measured their progress by the push-back and howls of the entrenched and special interests, all of which urges them on. 

The healthcare revolution is happening, accompanied by a sweet aroma and progressing in spite of the government and the corporate welfare auctioned to their pals. 

Dr. G. Keith Smith is a board certified anesthesiologist and co-founder of The Surgery Center of Oklahoma.