How a Bitcoin Standard Fixes Healthcare
This is an opinion editor of RootCause MDa GP who prefers a holistic, full-stack approach to fixing health.
RootCause MD has no affiliation with the Oklahoma Surgery Center.
The problem
The US health care system is a garbage can fire. Per capita, the United States spends the most on healthcare in the world, almost double the number of similarly developed nations such as France, Sweden or the United Kingdom. At the same time, the United States has health outcomes that are significantly below these nations in calculations such as healthcare access and quality (HAQ), disease burden (disability-adjusted life years, or DALYs) and pregnancy-related deaths.
What is it that drives such a difference between health care costs and health outcomes? It is a complex question. Part of the reason lies in the cruel diet and lifestyle that creates obesity and chronic disease in the American people at unprecedented speeds, but much of the blame lies in a damaged health care system that fails to deliver value to patients.
Many books can and have been written on this complex subject. In my opinion, the fundamental problem is government intervention, which has reduced competition in the free market with crippling consequences.
If a plumber or accountant presents an unreasonably large offer or provides poor service, they simply will not win ongoing business. Not so in the health care system, where cartels of insurance companies and hospitals work together to set prices and maximize profits.
Over-regulation and market intervention by the authorities have provided fertile ground for regulatory capture and the subsequent spread of a whole class of profiteers, griffins and freeloaders who make money standing between patient and doctor. This rental-seeking “Medical Industrial Complex” includes the medical insurance industry, corporate hospital groups (including “not-for-profit” hospitals) and the pharmaceutical industry, all of which have benefited enormously from free market censorship, buy-out of medical practice and wholesale centralization. and corporatization of medical treatment.
This has resulted in a horribly misaligned set of incentives and quite often a major agent problem between doctor and patient.
For physicians, it leads to unnecessary pharmaceutical use, unnecessary surgery, and ignorance of best-practice lifestyle medications that can address and reverse chronic disease at the root cause. It also means a loss of autonomy as doctors are often forced to seek approval from insurance companies before starting treatment.
For patients, this means indecently large health bills, sporadic quality and bankruptcy of “insured” patients when insurance companies refuse to pay for medical bills.
How did this happen? For researchers at the Austrian School of Economics, such inefficient market dynamics was the inevitable consequence of the divorce from a healthy monetary standard with Nixon’s closure of the gold window in 1971.
Fiat money-derived fiat medicine and distorted incentives have prioritized revenue over quality, delivering a healthcare system that fails patients, while increasingly leading doctors away from their hippocratic oath to “first, do no harm.”
As Marcellus said in Shakespeare’s “Hamlet,” “Something is rotten in the state of Denmark.”
The solution
Dr. Keith Smith, an anesthesiologist and student in the Austrian economy, saw declining health care and rising costs in the early 1990s. He felt ethically compelled not to participate in a system that often bankruptes patients by receiving inappropriately large medical bills.
“I had been convinced in the early 1990s that the government did not have money they had not first stolen, and to accept state payment was to receive stolen property.” – Dr. Keith Smith
He opened the Surgery Center of Oklahoma in 1997 with another anesthesiologist, Dr. Steven Lantier, with the goal of providing the highest quality elective surgical treatment, while providing transparent pricing and no funding from government or insurance companies.
The Surgery Center Of Oklahoma is a very unique operation for a number of reasons:
- They post prices for all surgeries, including surgeons ‘fees, anesthesiologists’ fees, consumables and construction fees, in full public display on their website.
- More than half of their clients come from abroad, including people who lack insurance coverage and who otherwise would not be able to afford surgery under an existing insurance plan or have long waiting times for elective surgery in their home country.
- They publicly publish the frequency of post-surgical infection, an important measure of quality that most institutions and surgeons make a point of not parading.
- They are fully owned and operated by doctors.
- Most importantly, they operate on a purely fee-for-service basis, take payment directly from patients (including in bitcoin) and refuse to trade with third-party payers.
The results from the operations center speak for themselves. All-inclusive rates for elective surgeries are often a tenth of the cost to the local hospital. In some cases, patients have the entire operation performed for less than the cost of the insurance deductible at a company-owned hospital. Most prices have not risen nominal terms since 1997, despite two and a half decades of inflation. Many prices have fallen, or minimally increased, but with more value in the form of larger care packages, such as post-surgical physiotherapy.
Surgeons operating at the surgical center have among the lowest incidences of postoperative infection, and it is not uncommon for patients to be rejected from surgery at first examination, after being overdiagnosed by an external surgeon.
The income of surgical surgeons is higher than for other institutions, despite the fact that the center charges patients drastically lower prices. This can occur because the center runs on minimal profits, and transfers what is usually institutional profits to surgeon and employee revenues. Sometimes surgeons and anesthesiologists waive the fees for mitigating circumstances on a case-by-case basis.
Over the past 25 years of operation, the Surgery Center of Oklahoma has shown that a free market care model can drastically reduce health care costs while providing high-quality care. The astonishing results can be attributed to real competition in the free market and the elegant adjustment of incentives that occurs when all intermediaries are removed from healthcare, a medical practice is doctor-owned and doctor-operated, and patients pay directly in a fee. for-service scheme.
This layout ensures that there are no conflicts of interest, profit-driven key performance indicators or other financial conditions related to the insurance, hospital or other industries that could lead to overdiagnosis or overtreatment. Incompetent or unethical surgeons are simply not offered ongoing operating licenses.
The Surgery Center of Oklahoma can simply be seen as the physical infrastructure that enables the voluntary exchange of free market services between a patient and their surgeon. A personal “Silk Road” for surgical treatment. A proof-of-concept for a high-quality sustainable healthcare system for a post-fiat era.
The counter-proof
Despite the success, there are many critics of the free market approach to health care. The most common is the potential loss of access to health care for the disadvantaged and low-income earners. This argument reflects similar arguments about a social security network on a bitcoin standard. It ignores the more urgent fact that a growing proportion of the population can no longer afford to participate in the current system as it exists today, and the majority would be better off financially on the other side of a healthy monetary standard with greater overall wealth and increase purchasing power.
More relevant is the question of how to apply the fee-for-service model beyond elective surgery. Prolonged hospitalizations, intensive care, frequent procedures or repeated follow-up of outpatient treatment all represent future challenges with regard to the implementation of free market health services.
Many of these problems are now being solved. Companies like CrowdHealth use direct-pay operations such as the Surgery Center of Oklahoma and negotiate on behalf of members to provide health care safety nets while circumventing the inefficient insurance industry.
The future
Whether Dr. Smith and Dr. Lantier know it or not, their operation provides a blueprint for a disinterested healthcare system on a bitcoin standard. With fiat currencies growing rapidly, health care costs under the ruined fiat medical system continuing to rise, and governments’ ability to continue to effectively fund socialized health care declining, pressure on direct-pay healthcare is becoming a matter of economic inevitability.
As bitcoin separates money from the state, it will also help separate the health care system from the state. With the decentralizing, deregulating power of Bitcoin operating at a societal level, healthcare services at a bitcoin standard are likely to look very different from today.
The dissolution of fiat incentives should see the bloated medical-industrial complex shrink as the hordes of bureaucrats, hospital administrators, pharmaceutical representatives and paper-pressing employees in the backroom become obsolete by the highly efficient free market that delivers high-value treatment at a fraction of the cost.
I predict that consumers who are directly responsible for the care costs (paid in bitcoin) will seek a much higher value. Many will seek out the doctors who prescribe effective diet and lifestyle advice that will prevent them from needing surgery or expensive lifelong prescriptions in the first place. The needy will be recipients of direct philanthropy in the form of waived or publicly funded doctor’s fees.
In the long term, the system should be transformed from one based on the pharmaceutical treatment of chronic disease and surgery after the pathology has already manifested itself and to a holistic, integrated approach based on prevention.
As the Surgery Center Of Oklahoma has shown, free market health services have the potential to drive massive cost reductions and an increase in quality of care. It is dizzying to think about how abundant, accessible and cheap health care can be in the deregulated world of a bitcoin standard.
This is the promise of a health care system without corruption of conflicting financial incentives and conflicts of interest. A healthcare system that enables doctors to deliver the highest quality, highest value and lowest price, with the patient left in front and at the center of the clinical relationship.
Further reading
Keith Smith interview on free market health services with Russ Roberts from Econtalk. https://www.econtalk.org/keith-smith-on-free-market-health-care/
“Health Care Lessons From Dr. Keith Smith” by Russ Roberts https://russroberts.medium.com/health-care-lessons-from-dr-keith-smith-aa29baefbecc
This is a guest post by RootCause MD. Expressed opinions are entirely their own and do not necessarily reflect the opinions of BTC Inc. or Bitcoin Magazine.
