Undoing damage done by Obamacare: The stupidity that thwarts hospital competition
In my last piece, I introduced “C2T2” — consumerism, competition, transparency, and trust — as a help to remembering the principles that must guide any sane effort to rebuild American medicine and health care.
In the recent Senate hearing mentioned in my last piece, Senator Kirsten Gillibrand (D-New York) pursued a line of questioning with Mark Cuban that uncovered something obvious: Unless we drive costs down, it’s fruitless to continue paying premiums. Why? Because the deductibles (the money that patients must pay before “insurance” kicks in) are so high that real medical care is out of reach.
Here are a couple of simple facts.
First, real medical care is not to be confused with being “covered” by a health insurance policy.
Second, throwing more and more premium money from taxpayers at health insurance companies does not drive down the cost of anything — not the total annual tab for American health care, not the cost of insurance coverage, and most assuredly not the cost of real medical care.
In that Senate hearing, Dr. G. Keith Smith of the physician-owned Oklahoma Surgery Center (OSC) spoke about real medical care. He described the case of a man in Georgia who needed a urological procedure. The man’s local hospital said it cost $40,000. Dr. Smith’s OSC could do the same procedure for $4,000. Upon hearing that, the local hospital in Georgia honored the lower price.
Huh?!
How much more loudly could any case shriek that the way Americans pay for medical care is beyond nuts? It’s a legalized racket, probably one of the biggest enterprises in legalized criminality in human history — an enterprise created by and maintained by a web of self-defeating law, regulation, corrupt lobbying, and cost-concealment, all abetted by ignorance.
To illustrate the point….
Per a report from Becker’s Ambulatory Surgical Centers, physician-owned hospitals (POHs) saved Medicare $1.1 billion in 2019.
There are around 250 physician-owned surgery centers in America. With the greater affordability and high quality documented in POHs, why aren’t there more?
Until 2010, anyone could own a hospital. The Affordable Care Act (better known as Obamacare) changed that. It banned new POHs and limited the ability of existing POHs to expand.
Dr. Everett Bonner, an exceptionally well-qualified surgeon, of Baton Rouge, Louisiana, and the first to use a new method of hiding scars when operating on women with breast cancer, has stated that the limits on POHs are a nationwide problem. He would like to be able to treat Medicare patients at his hospital, but because of the ban on the expansion of POHs, he cannot. He has sought a waiver, but has not received it. Obamacare has tied his hands in his effort to help women over 65 with breast cancer.
A bipartisan bill in the House of Representatives, HR 4002 (the Patient Access to Higher Quality Health Care Act of 2025), and a similar Senate measure, SR 1390 (Physician Led and Rural Access to Quality Care Act), are aimed at removing the self-defeating barrier introduced by the ACA in 2010 and allowing competition to flourish. That’s a path to affordability.
But what’s this?! The American Hospital Association (AHA), representing over 5,000 nonprofit or not-for-profit hospitals, opposes this competition those bills would produce. (Before rushing to judgment based on the terms “nonprofit” and “not-for-profit,” be aware of this: The salary packages of the top dog of such hospitals range from $12 million to $33 million per year. The AHA has also been in the forefront of donors to congressional campaigns for decades. In return, the nonprofits and not-for-profits have become cash cows through multiple avenues and programs created by the federal government. (A future piece will examine those.)
Nearly 150 rural hospitals have closed since 2005. Becker’s Hospital Review puts another 759 on the endangered list.
You would think that with (1) dismal numbers on hospital closures, (2) a shortage of physicians, (3) an aging population, and (4) more physicians not taking Medicare patients, politicians would be tripping over each other to remove any obstruction to more hospitals, to competition, and to lower prices.
There must be some deep-seated, self-defeating madness in all of this. And there are way too many parties profiting from the madness. Would it be a wild guess to suggest that they’re probably not Boy Scouts?
Call your representative and senators.
Demand that they open up competition by passing HR 4002 and SR 1390. And remind those senators to get moving on the bipartisan, Marshall-Hickenlooper bill, Patients Deserve Price Tags Act, so we can have price transparency with competition.
Time’s a wastin’.
Marion Mass, M.D., is a practicing pediatrician in Bucks County, a leading member of the Free2Care movement, and a member of The Independence‘s advisory board.
