Benevolent Oversight by Pat Conrad MD

Doug would be justified in banning me forever from this site for quoting a story from Vox, but scan Twitter long enough and a broken clock, and a blind squirrel, etc., etc…

Dr. Gajendra Singh was charged $1,200 by his local hospital for an outpatient abdominal ultrasound, and decided he could do better.  So he moved to open his own imaging center, where he would offer ultrasounds for about $250, x-rays for $70, and echocardiograms for $300.  And this sneaky so-and-so actually had the gall to (gasp) post his prices.  Sound familiar?  Lower prices, quicker service, and win-win for consumers and seller alike.  Enter government to louse it up.

Dr. Singh is a surgeon who performs liver transplants and surgeries for GI cancers.  He often has to order an MRI, the average charge for which in his area is about $1,200.  Singh’s imaging center would cut that charge to between $500 and $700.  His cost to buy a stationary MRI would be somewhat less than $750,000.  But before making that investment, he would first have to have a Certificate of Need, which might cost up to $400,000 and last for only 3 years.  And he could only get that after applying for the CON, which application could (would) be opposed by local competitors.

“Under North Carolina’s law, a medical provider must obtain a government permit (a ‘certificate of need’) if they want to offer certain new services or buy new equipment. But first, every year, state officials will make a determination about whether certain services are needed in different places.  If the state has decided an area doesn’t need a service, then other providers are barred from even applying for a permit.”

Ah yes, the good ol’ CON, the device begun back in the 1960’s as a way for the federal government to use the states to control health care services.  The CON laws “were well-intentioned, with the goal of exercising strong oversight of new health care providers.”  Every central-planning failure is always propped up with the honorifics of good intentions as though that matters.  What the CON laws actually accomplished was to concentrate power in the hands of existing health care facilities, allowing them to thwart new competition as government-protected local monopolies.  Though Congress repealed this stupid interference in 1986, many states still cling to it, including North Carolina where Dr. Singh practices.  “Don Taylor Jr., a health policy professor at Duke University … noted that there are concerns about unnecessary scans if the rules are rolled back and about nixing them for other services.”  Concerns for whom, exactly??  Why is this the business of an academic, or politician, or anyone else other than the physician and patient?  These presumptions arise from the idiot notions of public resource management and treating health care first and foremost as a blessing bestowed by government.  The predictable results have been the inflated prices and reduced access that come with reduced competition.

Dr. Singh is taking his fight to the North Carolina Supreme Court, citing precedents that these CON laws are monopolistic, and violations of equal protection.  Of course he is right, but it appears that the state government and regional hospitals are hoping Singh will be defeated.

I have argued for years that health care should be like tire stores, and that they should be built on every corner on the street if the owners felt it worth the investment.  Groceries, clothing, hardware, and auto parts…every other necessary component of daily living is easily obtainable at the retail level, with large variations for price and quality, as the market dictates.  What makes health care so damn special?

Certificate of Need and Stark laws are stupid and an immoral overreaches of government power.  The de facto presumption that government must provide health care fuels these market restrictions, which in turn hurts consumers.  This physician-investor wants to provide a cheaper service, and the government is standing in the way.

I wonder what would happen if some smart bureaucrat figured out how to apply CON laws to primary care?

Douglas Farrago MD

Douglas Farrago MD is a full-time practicing family doc in Forest, Va. He started Forest Direct Primary Care where he takes no insurance and bills patients a monthly fee. He is board certified in the specialty of Family Practice. He is the inventor of a product called the Knee Saver which is currently in the Baseball Hall of Fame. The Knee Saver and its knock-offs are worn by many major league baseball catchers. He is also the inventor of the CryoHelmet used by athletes for head injuries as well as migraine sufferers. Dr. Farrago is the author of four books, two of which are the top two most popular DPC books. From 2001 – 2011, Dr. Farrago was the editor and creator of the Placebo Journal which ran for 10 full years. Described as the Mad Magazine for doctors, he and the Placebo Journal were featured in the Washington Post, US News and World Report, the AP, and the NY Times. Dr. Farrago is also the editor of the blog Authentic Medicine which was born out of concern about where the direction of healthcare is heading and the belief that the wrong people are in charge. This blog has been going daily for more than 15 years Article about Dr. Farrago in Doximity Email Dr. Farrago – [email protected] 

  4 comments for “Benevolent Oversight by Pat Conrad MD

  1. Margaret
    August 11, 2018 at 12:31 am

    … state officials will make a determination about whether certain services are needed in different places. If the state has decided an area doesn’t need a service, then other providers are barred from even applying for a permit.”…

    Real life example of “anti-dog-eat-dog” rule from “Atlas Shrugged” by Ayn Rand

  2. Pat
    August 5, 2018 at 10:46 am

    Lance, that is a genuinely sad, infuriating, tragic story. The would-be patients in your town lost the chance at a real physician providing top-flight, close quarters care; you were dishonestly, needlessly deprived of the passion that would have accompanied your dream. I don’t know what that idiot pol’s goal or agenda was, but he managed to provide a lose-lose outcome for everyone, which I believe is the result for the majority of what occurs in health care.

    This highlights why I do not, will not recommend medicine as a career to anyone. No matter the specialty, one’s career will be one long, frustrated march against the rest of the world telling you how much you are needed, while providing conflict and opposition at every turn for literally the rest of your life. It’s one thing to work hard to achieve difficult goals, but quite another when most of the hard work is done merely to overcome arbitrary barriers that need never existed, and which benefit only those parasites who erected them.

    Your sort of story could be written on a larger scale as more opposition to DPC grows at the state level.

    • Kurt
      August 8, 2018 at 3:42 pm

      Primary care is the worst specialty anyone could be condemned to. If one doesn’t go into it with the plan of doing DPC, they’re not too smart. Specialty training can be arduous but it is better compensated and will always be better compensated that FP/IM period. Wished I would have listened to my advisors

  3. Sir Lance-a-lot
    August 4, 2018 at 6:39 am

    “I wonder what would happen if some smart bureaucrat figured out how to apply CON laws to primary care?”

    I was the victim of such a situation (though not a law), Pat, and it’s the reason I’m doing Urgent Care.

    Well over ten years ago, my plan was to set up a DPC practice (before that term existed) with my wife (an RN), in the small town we lived in. We already had a large, centrally located house, which was already being used for a commercial purpose, with a long-standing commercial sign out front, a layout that would allow us to set up a couple of very tasteful exam rooms and a waiting room, and I had purchased a bunch of antique but useable equipment. All we needed was the approval of the Code Enforcement Officer for the new “use” of the building. He set up roadblocks at every stage, reading the plain language of the zoning laws to mean things they clearly didn’t, and, ultimately, said, “We don’t need a doctor’s office in this town.”
    We hired a highfalutin’ lawyer with a specialty in that area, who investigated and told us that there was nothing we could do – appeals were to the zoning board, which had hired the bureaucrat, and would support him, and the law allowed for no further appeal to a court. The only way around it was to mount a political campaign to create and enact a new town zoning law to change the zoning, which was not likely to work.
    So I went out and got a job.

    True story.

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