Protect The Freestanding Doctor's Office

Thoughts on the Niskanen Center's Healthcare Abundance Agenda

Fun fact. Among the top 12 healthcare-spenders, the USA:

1) spends the most money on healthcare (as a fraction of gdp)

​AND

​2) has the highest rate of treatable deaths

🤡

The other day I finally got around to sitting down and thoroughly reading the Niskanen Center’s Healthcare abundance: an agenda to strengthen healthcare supply. If you’ve ever wondered why it feels like you’re paying for lobster but eating shit when it comes to healthcare, this is prob the best comprehensive review of how we got here and how to fix it.

Here’s the part that I’ve been stewing over for a few days, and I’m gonna tell you a story about it.

“Medicare pays hospital outpatient departments nearly double what it would pay a freestanding physician’s office for the same service.” This causes freestanding physicians to flock to hospitals instead, where they can immediately get paid better. This often happens with no change, or a decrease, in the quality of their services.

TLDR: freestanding doctor’s offices are getting eaten and enshittified by hospitals, because we’ve made bad policy choices.

Storytime.

I was living with serious pain and I needed a surgery to fix it, but that surgery itself comes with high risk of extreme pain - so much that it wouldn’t be worth it. I knew I could avoid that extreme pain simply by leveraging a certain local anesthesia method that has been around since the late 80’s. Nothing fringe, nothing experimental. It’s tried and true local anesthesia tech, that simply hasn’t been applied to this one particular not-relevantly-different surgery.

It took me almost two years to find a doctor willing to do this, and throughout these two years doctors told me it was impossible. I thought I might have to live in pain forever. Not because the tech was difficult - the tech is EASY - but because there was no incentive for any of the doctors to leverage it.

Hospital doctors were usually the ones saying outright that it was impossible. This sounds completely preposterous to anyone who understands the tech, yet they persisted. They live in a world of concepts and procedures all designed around avoiding the legal ramifications of your avoidable death, not your avoidable suffering (because there are almost no legal ramifications to that).

When I finally, ecstatically, almost-disbelievingly succeeded in getting the surgery I needed, it was in a freestanding office - the exact type that’s getting eaten by hospitals.

Do you know how I managed to find that freestanding office???? I had to literally track down the inventor of the local anesthesia method.

He’s retired. I had to track down his phone number and call him up and beg him to help me find someone. I had been expanding my search to Mexico because I couldn’t find any freestanding offices in the US or Europe with the willingness and ability to do it.

Thank god, he had a coinventor. His coinventor is a groundbreaking person and for some reason has maintained a private practice. So that’s where we did it.

The surgery worked perfectly - better than traditional methods. My healing was better, my pain after surgery was better, everything was better. Now doctors can’t tell others that it’s impossible. More people can live without pain. Fewer people can face extreme suffering in surgery or post op.

That depended on a freestanding office. Site-based billing and loopholes that let hospitals devour their competitors are killing the places where innovation actually happens. Hell, they’re killing some of the only places where people do commonsense good work with up-to-date technology.

We need to:

1) Make Medicare pay the same rate for the same service, regardless of whether it’s in a hospital or freestanding clinic.

2) Repeal CON laws, which let hospitals veto the construction of freestanding competitors.

3) Lift the ban on doctor-owned hospitals (which actually tend to provide higher quality care than traditional hospitals!).

4) Close loopholes (340B, MLR) that give hospitals dramatic financial upside from acquiring freestanding clinics without adding any value to those clinics.