Free market fight goes viral.

• Author: Smith, G. Keith
• Position: HEALTH BEAT

A PATIENT who wanted to have a procedure at our facility asked us to file insurance. We discovered that, if she had her surgery at our facility rather than at an "in network" hospital, her deductible would have been $3,000 instead of $1,500; her copay would have been 50% of the charge rather than 20%; and she had to agree to a 25% penalty for coining to our venue rather than one of the hospitals in the network. Never mind that the hospital would receive multiples of our fee from the insurance company, and the patient's copay at the hospital was more than our entire charge.

This insurance company (a huge national company) made it clear when they came to Oklahoma that they were not interested in contracting with any facilities that were not hospitals or affiliated with hospitals. Because of this, our facility is out of network. In order to steer patients to in-network facilities, insurance companies financially punish patients for wandering outside.

These networks ostensibly were devised to control cost and guide patients to quality care. They have done the opposite, as you can see by comparing what you were charged for your medical care or insurance premiums 10 years ago with what you are charged now. Fewer and fewer good physicians with busy practices have remained in these networks as these organizations cut their fees every year. Cutting the physician fees introduced a soft form of rationing that was central to the profitability of the carrier/PPO (preferred provider organization) concept, as preposterously low payment to a physician for a service resulted in little of that service being rendered.

You well may ask, "If profitability is what drove these carrier/PPOs, why would they want to pay more at a hospital? This does not make any sense." It does not make sense until you understand that the giant hospital bills give PPOs an opportunity to profit from their repricing scam, charging for the extent to which they are successful in "discounting" these inflated bills.

The out-of-network penalties did not work well at first because our acceptable profit margin was so low that even what the PPOs and carriers considered giant penalties were not sufficient to put us in the red. The carriers started to punish patients more and more aggressively, but our prices were so low that we could work with patients individually, making sure that their cost for going with us out of network was less than if they stayed in their network at...