PrefertoreadthisinaKindle-friendlyversion?

Clickhere:

http://www.tomwoods.com/kindlehealthcare

Forothere-readers,clickhere:

http://www.tomwoods.com/epubhealthcare

1








Contents

Introduction 3
(DoNotSkipThis!)

Chapter1 5
HowAmericanHealthCareBecameDysfunctional(Hint:It'sNotBecauseofCapitalism)

Chapter2 14
TheWorld'sMostAffordableHealthCareHereintheU.S.?

Chapter3 22
WheretoFindExtremelyAffordableHealthCoverageandItIsn'tObamacare

Chapter4 27
ObamacareandMedicare:APhysiciansView

Chapter5 33
MarketMedicine

Chapter6 38
TheSelf-PayPatient

Notes 43

AboutTomWoods 44

2
 Introduction
(DoNotSkipThis!)

Youprobablywantchildrentodie.

That'saboutwhatyoucanexpectfromfolksonFacebookwhenyouexpressoppositiontothe
ideaofpoliticizinghealth,andremovingitfromtheprivate,voluntarysector.

Youwillthenhavetoendurefact-freetiradesuntiltheendoftime,abouthowthe
dysfunctionalAmericanhealthcaresystemisobviouslyaproductofcapitalism,andthatwe
thereforeneedmorecoercionandmorepolitics.

Thesearethesamepeople,byandlarge,whoclingtothedubiousbeliefthatthefinancial
crisisof2008wascausedbycapitalismandderegulation,eventhough(1)thebanking
sectoristhemostheavilyregulatedintheentireeconomy;(2)ontheeveofthefinancialcrisis
therewere115stateandfederalagenciesoverseeingthefinancialsector;(3)virtuallyallofthe
regulatorsthemselves,inwhomweareurgedtoreposeourconfidence,sawnothingwrong
withthehousingmarketthroughoutthebubbleyears;and(4)thereisnorepealedregulation,
includingthepartialrepealofGlass-Steagall,thatwouldhavepreventedthecrisis.

Thediagnosisisalways:toomuchcapitalism,toolittleregulation.

Meanwhile,Canada'smuchlessheavilyregulatedbankingsystem,whichdidn'thavethe
cripplingunit-bankinglawsthatAmericanstatesbeganimposinginthenineteenthcentury,
avoidedthebankpanicsthatoccurredhere.

It'salmostasiflifeismorecomplicatedthanthecomic-bookversionofgovernmentgood,
selfishprivatesectorbad,thatwehearamongfashionableopinion.

It'sbeenespeciallymelodramaticinthedebateoverhealthcare.We'vebeentoldthatthe
AffordableCareAct(ACA,orObamacare)saves36,000livesperyear,andthatfavoringits
repealthereforeamountstosigning36,000deathwarrants.

Asusualwiththeleftanditsmelodrama,thisfigurehaszerobasisinreality.

OrenCassoftheManhattanInstituteactuallybotheredtoexaminethenumbers.His
conclusion:ThebeststatisticalestimateofthenumberoflivessavedeachyearbytheACAis
zero.1

It'struethatsomestudiedfindthathealthinsurancedoesindeedsavelives.Butthosestudies
aredealingwithprivateinsurance,ortheexpansionofprivatecoverageinMassachusetts.
Obamacare,bycontrast,hasbyandlargebeenanexpansionofMedicaid,withtheshareof
Americansholdingprivateinsuranceactuallydeclining.Infact,researchersfindthat
Medicaidpatients'resultsareunimpressivetononexistentwhencomparedtopeoplewithno

1
For the analysis that follows I am indebted to Oren Cass, No, Obamacare Has Not Saved American Lives, available at
http://www.nationalreview.com/article/445260/obamacare-no-lives-saved.
3
insuranceatall.

DataavailablefromtheCentersforDiseaseControlshowsthatin2015,forthefirsttimein20
years,age-adjusteddeathratesincreased.DoesthatmeantheACAiskillingpeople?Not
necessarily,ofcourse.Butitdoesmeanit'snotsavinglives.

Infact,Casspointsout,ahelpfulcontrolgroupexists.Somestatesrefusedtoexpand
MedicaidundertheACA.Thosestatesmusthavehadworsehealthoutcomes,right?Wrong.
The26stateswiththeMedicaidexpansionsawmortalityrisemorethan50percentfaster.

Again,realityismorecomplicatedthanacomicbook.

Whatyou'llfindinthisbookarethetestimoniesofphysiciansandotherexpertswhodon't
believethestandardstorythattheAmericanhealthcaresystemissufferingfromtoomuch
capitalism,orthatonlygovernmentcanbringcostsdown.Theexactoppositeisthetruth.

Chapter1beginswithabriefoverviewofmyownaboutthehistoryofgovernmentand
healthcare.TheremainingchaptersaretranscriptsfromepisodesoftheTomWoodsShow,
mylibertarianpodcast,whichisapproachingonethousandepisodesasIwritethis.

Ifyouenjoywhatyoufindinthisbook,you'llwanttojointhetensofthousandswhohave
madetheTomWoodsShowapartoftheirdailyroutine:

http://www.tomwoods.com/episodes

TomWoods
Harmony,FL
May2017

Chapter1

HowAmericanHealthCareBecameDysfunctional
(Hint:It'sNotBecauseofCapitalism)

ForallthegoodthingswecansayabouthealthcareintheUnitedStatesandthereare
indeedplentywearealltooawareoftheperverseoutcomesandtheexorbitantprices.

Fewpeoplebothertoseekoutthecausesofthosehighprices.They'vealreadymovedonto
thesolution:why,governmentcankeeppricesdown!

Ithinkit'sbettertostartbyfiguringoutwhypricesarehighinthefirstplace,andalsotofind
outifwe'reattackingtherightculprit.

Wedon'thaveafreemarketinhealthcarewhenthefederalgovernmentaccountsfornearly
50percentofallAmericanhealth-careexpenditures.Variousgovernmentregulations,inturn,
haveinterferedwiththesystemandcontributedtoincreasingdemandformedicalservices
whiledecreasingtheirsupply.Theshifttothird-partypayers(insurancecompanies)has
madeAmericanslargelyinsensitivetoprice,therebypushingpriceseverhigher.Astaggering
regulatoryapparatus,aswellassignificantbarrierstoentryintothemedicalfield,keeps
supplydownandcostup.

Beforewegetstarted,let'sclearawayacommonobjection.CriticsoftheAmerican
health-caresystemsaythat,forallitshighcosts,itcantevendeliverthesamelifeexpectancy
orinfantmortalityratesofcountriesthatspendlessonhealth,andthatthesefailingsprove
thefreemarkethasnotworked.Thiscriticismisuntrue,evenifweoverlookthefalseclaim
thattheUnitedStateshasafree-markethealth-caresystem.Homicidesandcaraccidents,
whicharehigherintheUnitedStatesthaninmostWesterncountries,arenotthefaultofthe
health-caresystem.Infact,Americanswhodontdieinhomicidesorcaraccidentshavea
longerlifeexpectancythanpeopleinanyotherWesterncountry.1

Asforinfantmortality,theUnitedStatescountseverybabywhoshowsanysignsoflifeas
havingbeenbornalive.OthercountriesarenotsogenerousinFranceandBelgium,for
example,ababybornatlessthantwenty-sixweeksisregisteredasdead.InSwitzerland,a
babyhastobeatleastthirtycentimeterslongtobeclassifiedasliving.2Inthisway,babies
withanunusuallyhighchanceofdeatharesimplyremovedfromthestatisticsentirely,
whichmakescountriesthatmanipulatetheirstatisticsthiswayappeartobedoingbetterin
termsofinfantmortalitythantheUnitedStates.

Intheearlytwentiethcentury,healthinsurancewashardlyused.Treatmentsavailableto
patientswereattimeslimitedorevennonexistent,sothemarketforinsurancewaslargely
undeveloped.Somepeopledidacquiresicknessinsurance,butthatwasanincome
maintenanceprogramduringtimesofillness,notaprogramaimedatprovidingforones
medicalcosts.Programscomparabletomodernhealthinsurancepoliciesgainedsomesteam
duringthe1930s,butreallybegantopickupinthenexttwodecades,whengovernment
5
policiesmadethemartificiallyattractive.

OncetheUnitedStatesenteredWorldWarII,businessesonthehomefrontfounditdifficult
toattractthelabortheyneededbecausethedrafthadtaken11millionAmericansoutofthe
workforce,andthefederalgovernmenthadimposedwageandpricecontrols.Thosecontrols
madeitillegalforbusinessestoattractadditionallaborbyofferinghigherwages.Businesses
foundawayaroundthisrestrictionintheformofemployer-suppliedmedicalinsurance.The
wagecontrolauthoritiesdidnotconsiderthisbenefittobeawageincrease,andthusitwas
notsubjecttotaxationlikeregularwages.Thisistheoriginofwhatbecamethetaxexemption
foremployer-providedmedicalcare.

Afterthewarended,laborunionsbegantomakeemployer-financedmedicalinsurancepart
oftheircontractdemands.Nonunionemployerslikewisefeltcompelledtoprovideit,inthe
hopethattheycouldtherebyavoidtheunionizationoftheirworkplaces.3Hereagainwesee
theroleofnon-marketforcesinbringingaboutthepresentrelianceonemployer-supplied
medicalinsurance:thespeciallegalprivilegeslaborunionsenjoy,andthelengthstowhich
employersarewillingtogointryingtopreserveafreelabormarketintheircornerofthe
economy,derivefromstatutoryinterventionsintothefreemarketandarenotpartofthe
marketitself.4

Theestablishmentofhealthcareasacompany-offeredbenefitmayseeminnocuousenough.
Butasaresult,medicalcaregraduallybecameanexpenseAmericanspaidforonlyminimally
outofpocket.Peoplebecameaccustomedtohavingmostcostscoveredbyathirdparty,and
soslowlybutsurelytheycametodisregardpricealtogetherwhenevaluatingmedical
productsandservices.Ifemployersarepayinghealthcosts(beyondtheemployees
deductible)fortheiremployeesthroughaninsurancecompany,thoseemployeeswillbeless
mindfulofcostthaniftheyboreitthemselves.Likewise,suppliersofhealthcarehavean
incentivetoofferhigh-costtreatmentswithmarginalbenefitsbecausesomeoneelseispicking
upthebill.Thepredictableresult,sinceneithersuppliersnorconsumershaveanincentiveto
keepcostsdown,hasbeenongoingpriceincreases.Naturallybusinessestendtopushback
whentheircostsrise,butforprivacyreasonstheyfinditmoredifficulttopryintothemerits
ofaparticularmedicalprocedureperformedonanemployeethan,say,touncoverwhythat
employeepurchasedafirst-classplaneticketonthecompanycreditcard.5

VijayBoyapati,aformerGoogleengineer,tellsastorythatcouldbemultipliedmillionsof
timesover,regardingtheeffectsonpricewhenperverseincentives,andthennormalones,
areinplace.Hewantedtohaveasmallepidermoidcystremovedfromhisback.Thisiswhat
happened:

ThefirstpracticeIvisitedwasadermatologistsoffice,whichdealsprimarilywith
insuredcustomersandcanaffordtochargeexorbitantrates.Iexplainedtothe
assistantonmyfirstconsultingvisitthatIdidnthavehealthinsuranceIchoosenot
toandaskedhowmuchtheprocedurewouldcostifIpaidcash.Shequotedme$700
forarisklessprocedurethattakesabout15to20minutestoperform,andwouldnotin
thisinstancebeperformedbythedermatologist,butbytheassistantherself.Thefact
thatthereareverybasicproceduresthatcosttheequivalentof$2,100anhourisa
glaringsignthatthemarketsnormalpricemechanismhasbeenbroken.

6

Ontherecommendationofafriend,Idecidedtovisitanothermedicalpractice,
CountryDoctor,whichdealsmostlywithlower-incomepatientswhodonothave
healthinsurance.Becauseitscustomerspayoutofpocket,CountryDoctorhasamuch
strongerincentivetochargepricesthatitscustomersarewillingtopayupfront.When
IhadtheproceduretoremovethecystdoneatCountryDoctor,itwasperformedby
anactualdoctor,anditcostlessthan$50.6

MedicareandMedicaid,createdin1965,arealsoexamplesofthird-partypayment.Medicaid,
themeans-testedprogramforthepoor,andMedicare,aprogramtoprovideforthemedical
needsofAmericanseniorsregardlessofincome,artificiallystimulateddemandformedical
servicesonthepartofconsumerswhowerenotthemselvesbearingthecost.In1960,
governmentcovered21percentoftotalmedicalexpenditures,withconsumersbearing55
percent.In2000,governmentcovered43percentandconsumersonly17percent.7Naturally,
costsrosedramaticallyundertheseconditions.

Thefederalgovernmenttriedtopushsomeofthecostsitwasbearingontoothers.Doctors
andhospitals,receivingonlypartialreimbursementfromMedicareandMedicaid,beganto
compensatefortheirlossesbychargingprivateinsurersmore.Privateinsurancecosts,in
turn,begantoskyrocket,aphenomenonthatsubsequentlygaverisetoso-calledmanaged
care,thebureaucraticmessthateveryonedislikesforitseffortstodrivedowncostsby
denyingcertainkindsofcare.8

Whilesomeformsofgovernmentintervention,suchastheoneswehaveexaminedthusfar,
produceanartificialstimulustodemand,othersleadtohighermedicalcostsasaresultof
artificialrestrictionsonsupply.TheAmericanMedicalAssociation,forexample,restrictsthe
numberofmedicalcandidatesbymeansofitsaccreditationprocessformedicalschools,with
itsdecisionsratifiedbystategovernments.Nineteenstatesarelimitedtohavingasingle
medicalschool.Weresupposedtobelievethisrestrictivepolicywasdevelopedwithonlythe
publicgoodinmind?

Thesupplyofmedicalservicesisalsokeptdownbycertificate-of-need(CON)regulation.
Suchregulationallowsexistinghospitalsthemselvestodecidewhetheraneedexistsfor
additionalhospitalsinaparticulararea.Weresuchaprivilegegrantedtoexistingfirmsin
anyotherindustry,itsanti-competitivenaturewouldbeevident.Notsurprisingly,CON
regulation,whichhasalsobeenusedtoblockcompetitioninrelatedhealthprofessionslike
homehealthcareandnursing,hasbeenfoundtoincreasemedicalcosts.

Additionalrestrictionsonmarketcompetitioncontributestillfurthertorisingcosts.For
example,Americansareprohibitedfrompurchasingmedicalinsuranceoriginatinginstates
otherthantheirown.Mandatesthatstatesimposeoninsurancecompaniesputupward
pressureonpolicyprices.Eachofthesemandatesrequiresthatinsurancecompaniesina
particularstateprovidecoverageforaparticulardisorderorkindoftreatment.Eachmandate
resultsinhigherpremiumsandlessconsumerchoice.Peoplehavenowaytochoosepolicies
thatsuitthemandmustinsteadinsureagainsttheneedforhairimplantsormassage
therapytwoexamplesofstatemandateswhethertheywanttoornot.Asof2009,when
BarackObamabeganhissecondterm,RhodeIslandledthenationinmandateswith70.

7
Idaho,with13,hadthefewest.Thatyeartherewereatotalof2,133mandatesacrossthe
states,upfromjust252in1979.Thesemandatesmakeitdifficultforpeopletofindlow-cost,
high-deductiblepoliciesthatcaninsurethemagainstmedicalcatastrophes.Thatsoneofthe
reasonssomanypeoplehavechosentoforegoinsurancecoverageinthefirstplace.Ayoung
personfindsitsillytospend$300permonthonmedicalserviceshewontneedoruse,justso
hecansave80percentonroutinedoctorvisits.9

TheObamaplanestablishesstate-basedexchangeswheresmallbusinessesanduninsured
individualscanpurchaseinsurance.Notoneoftheplansofferedattheseexchangesprovides
onlycatastrophiccoverage,thesensibleoptionthatwouldbeavailabletoconsumersonthe
freemarket.Instead,theyallcoverevenroutinehealthexpenses,therebycausingindividuals
tobeasheedlessofcostasever,andcontinuingtheperversionoftheconceptofinsurance
wherebypeoplearetobeinsuredagainsteventslikecheckupsthatarecertaintooccur.
High-deductible,catastrophicplansarealsopenalizedbytheestablishmentofdeductible
capsandtheprohibitionofco-paymentsforpreventativecare,whichwillmakesuchpolicies
moreexpensive.Meanwhile,researchfindsthathigh-deductible,catastrophicplansput
strongdownwardpressureonhealth-carecosts,leadconsumerstobemuchmorecost
conscious,andstilldeliverthesameamountofnecessarycarethatpeoplewhoholdmore
standardinsurancepoliciesreceive.10

Giventheongoingriseinmedicalcostsandthecountlessstoriesofpersonalhardshipto
whichthosecostshavegivenrise,criticsofthepresentsystemhaveclaimedthatadditional
governmentinvolvementisnecessary.Butifearliergovernmentinterventionshavetendedto
pushpricesup,additionalinterventionsinthesamedirectionarelikelytointensifythe
problem.TheAustrianeconomistLudwigvonMisesoncedescribedhowgovernment
interventiontendstofeedonitself:thefirstinterventioncausesproblemsthatstillfurther
interventionsareenactedtoresolve,andsoon,untiltheeconomybecomesamazeof
regulationandcontrol.Neverconsideredisthemererepealoftheinitialinterventions.

Themostobviousproblemwiththerecentlyenactedhealth-carelegislationistheincentive
structureitcreatesfortheuninsured,andindeedevenformanyofthepresentlyinsured.
Individualsaresubjecttofinancialpenaltiesfornotpurchasinghealthinsurancepoliciesthat
meetgovernmentstandards.Butthepenaltiesarefarlowerthanthecostofpurchasingsuch
policies.Thatmeansitislessexpensiveforpeopletoremain(orbecome)uninsuredand
simplypaythecorrespondingpenalty.Theycangetawaywithdoingsobecauseunderthe
newlaw,insurersarerequiredto(1)enrolleveryonewhoapplies(guaranteedissue),(2)
coverpre-existingconditions,and(3)adoptapolicyknownascommunityrating,inwhich
theymustchargethesamepremiumtoall,withminorexceptionsforgeographicalarea,age,
andwhethertheplancoversanindividualorafamily.(Andinsurancecompaniesare
regulatedinhowlargethedifferentialcanbebetween,say,veryyoungandveryold
customers;theelderly,whosemedicalbillsarefarhigherandofgreaterquantitythanthose
oftheyoung,maybechargedapremiumonlytwiceashigh.)Itthereforemakessensefor
peoplenottopurchasehealthinsurance,waituntiltheybecomeill,andthenpurchasean
insuranceplantheircurrentillnessbeingapre-existingconditionthatinsurance
companieswouldberequiredtocover.

Thisisasuicidalbusinessmodelorperhapshomicidal,sincetheinsurancecompaniesdid

8
notelecttoimposeitonthemselves.Noinsurancecompanycansurvivewithoutbeing
allowedtopoolrisksappropriatelyandchargepremiumsbasedonrelevantactuarial
estimates.Profit-seekinginsurancecannotoperateaccordingtoabusinessmodeldesigned
forasocial-welfareagencyfundedbytaxation.Requiringinsurancecompaniestocover
pre-existingconditions,moreover,islikedemandingthathomeownersbeabletotakeout
fireinsuranceonaburningbuilding.Cynicssuspectthatadvocatesofthisplanunderstand
perfectlywelltheimpossibleburdenitwillplaceoninsurancecompanies(thebogeymenwe
aresupposedtohate,whoareinfactearningamere2.2centsonthedollarinprofit),and
mustbeintelligentenoughtoforeseethecomingcollapseand,asnightfollowsday,
nationalizationoftheinsuranceindustry.

In2006,Massachusettsinstitutedanindividualmandatealongwithguaranteedissueand
communityrating.Theresultwasmajorlossesamonginsurers,whichledtolowerpayments
tohospitalsandlargegrouppractices.Insurersandhospitalsfoundthemselvesontheverge
ofgoingoutofbusiness.Residents,meanwhile,facedanongoingriseinpremiums.State
TreasurerTimothyCahillsaidtheprogramhadbeenafiscaltrainwreck,costingmorethan
$4billionover11timestheinitialprojection.11

Nowthewholecountrygetstotryoutthisapproach.

Ontopofthis,insurancecompanieswillnotbeallowedtoimposelifetimelimitson
coveragee.g.,$2millionor$6million,asinmanypopularplans.Theinsuredmustbe
allowedtoconsumeasmuchastheyneed,forever.Insurancecompanieswillalsobeforced
tocoverthechildrenoftheinsureduntilagetwenty-six.Somechildren!Allofthismeans
higherpremiums,naturally,andlessconsumerchoice.ByOctober2010somehealth
insurancepremiumratesinConnecticuthadalreadyrisen47percentinresponsetothenew
law,andWell-Point,thecountryslargestinsurer,foundtheaveragepremiumfora
25-year-oldmanlikelytoriseby155percentinRichmond,Virginia,andby300percentin
Louisville,Kentucky.12Butthathardlyseemsthepoint,whichishowjuvenileallthese
provisionsare:why,ifwewantaparticularoutcome,letshaveourcongressmandemandit!
Resourcesareunlimited!Demandyourshare!

Meanwhile,theObamaplanwilladdanother18millionpeopletoMedicaid,ajointlyrun
federal-statemedicalcareprogramforthosewithlowincomes.Inotherwords,states
drowninginredinkareabouttobethrownananchor.

Otheranchorsarebeingthrowntotaxpayersandbusinesses.Theso-calledrichwhohave
norightsandexistonlytobeplunderedwillfindtheirMedicaretaxesjumpby60percent,
andwillbehitwithanewtaxonunearnedincome,basedontheMarxistviewthatincome
notderivedfromphysicallaborisnotreallyearned.Healthinsurancecompaniesand
pharmaceuticalmanufacturerswillalsobehitwithhighertaxes,andanewtaxonmedical
deviceswillbeimposed.Cadillachealth-careplans,whichofferconsumersmorethanthe
federalgovernmentthinkstheyoughttohave,willbesubjecttoanew40percenttax.And
theannualtaxdeductionformedicalexpensesadeductionhalfofwhosebeneficiariesearn
under$50,000peryearisbeingreduced.13

In2014,firmswithfiftyormoreemployeeswillbefinediftheydonotofferworkersahealth

9
insuranceplanthatmeetswiththefederalgovernmentsapproval.(Smallerfirmsare
exempted,butskepticssaytheexemptionswillbeshortlived:thefederalgovernment,facing
risingcostsandrevenueshortfalls,couldverywelllowerthethresholdtotwenty-fiveoreven
tenemployees.)AsBarronsputsit,ifyouwanttoexpandyourbusinessunderthese
conditions,youmightfollowoneofthesestrategies:a)askingyourfull-timers,atsay35
hours,towork40or45;b)firingafewworkersandoutsourcingtheirservicestoanother
firm;c)hiringmoreworkersoffthebooks;d)notexpandingatall.14

Whataboutallthesavingstheprogramissupposedtoyieldus?Theallegedsavingsare
theproductofaccountingtricks.Theyresultfromthefactthattheprogrambeginstaxing
peoplein2011butdoesntbeginpayingoutbenefitsuntil2014.Ifwestartourmeasurement
ofcostsin2014,wefindtheprogramsallegedsavingsarenowheretobefound,andthatin
factalthoughestimatesrangefromseveralhundredbilliontoseveraltrillionitpromisesto
beenormouslyexpensiveoverthefollowingtenyears.15

TheObamaplanalsosuffersfromcriticalomissions.Itdoesnothingtoreducetheregulatory
burdenthatreducesboththesupplyandtheefficiencyofhealth-careservices.Itdoesnot
promotecompetitionbetweenstates.Itdoesnothingatalltoreducecosts.Itdoesnotaddress
thecostimplicationsoflowdeductiblesandco-paymentsandofexcessiverelianceon
third-partypaymentingeneral.Ifanything,itaccentuatesthisreliancebyimposingpenalties
onemployerswhodonotprovidehealthcoveragetotheiremployees.Itispreciselythe
employerprovisionofhealthcareanditstaxdeductibilitythathasencouragedthesystemof
third-partypayment.ItseemssignificantthatinSwitzerland,whosehealth-caresystemisso
oftenpraised,thepercentageofmedicalcoststhatpeoplebearoutofpocketistwoandahalf
timesasgreatasitisintheUnitedStates.AndintheUnitedStates,thosesectorsofthe
industrywhoseservicesarenottypicallycoveredunderstandardinsuranceplansincluding
LASIKsurgeryandmostplasticsurgeryhaveseencostscomedown,evenastechnological
innovationhasincreased.16Withconsumersbearingthecostsoftheseservicesthemselves,
theyhavebeenmuchmoreconsciousofpricedifferentials,therebyforcingprovidersto
becomecompetitiveonprice.

Medicare,meanwhile,whichissupposedtoprovidemedicalcarefortheelderly,isitselfin
seriousneedofreform,underfundedtothetuneoftensoftrillionsofdollars.Andyetwith
theprogramsunsustainabletrajectorybecomingclearereveryyear,aRepublicanCongress
underPresidentGeorgeW.Bushpushedthroughso-calledMedicarePartD,which
establishedaprescriptiondrugbenefitforseniorsthataddedtensoftrillionsmoretothe
total.MostAmericans,seeingsuchaprogramproposed,canbeforgivenforassumingitmust
havebeenaddressingapervasiveproblem,sincewhyelsewouldthefederalgovernmentget
involved?Infact,a2002governmentsurveyofseniorsfound86.4percentsayingthatgetting
theprescriptiondrugtheyneededoverthepastsixmonthshadbeennotaproblem,9.4
percentasmallproblem,andamere4.2percentabigproblem.Three-quartersof
Americanseniorsalreadyhadprescriptiondrugcoveragethroughvariousprivateandother
outlets.17

Wenowknowthattheestimatedcostoftheprogramwasdeliberatelyunderstated;the
program,moreover,wasstructuredinsuchawaythatfutureexpansionsofcoveragewere
inevitable.Butevenintheabsenceofanymodification,PetePetersonwarnsthatbytheyear

10
2030,incredibly,thefederalgovernmentwillbespendingasmuchonprescriptiondrugsfor
Medicareenrollees(asashareofGDP)aseverythingitnowspendsonnon-healthbenefitsfor
needyworking-ageAmericansincludingmeans-testedcashwelfare,foodstamps,
unemploymentcompensation,childnutrition,fostercare,andtherefundableportionsofthe
earnedincometaxcreditandchildtaxcredit.18Ithasbeenestimatedthatnearly$20trillion
ofthestaggeringunfundedliabilitiesfacingtheU.S.governmentisattributabletoMedicare
PartD.

Whatdidpeopledobeforetheseprogramsexisted?HistorianDavidBeitohasdocumented
thepreviouslyneglectedroleoffraternalorganizationsinprovidingdiscountedhealthcareto
theirmembers.Suchorganizationswereabletosecuregroupdiscountsfromphysicians,
whichmeanttheirmemberswereabletoenjoyaffordablemedicalcare.Oneofthereasonsfor
thedeclineinandeventualdisappearanceofthefraternalassociationsroleinproviding
medicalcareandotherservicesthatweassociatewiththemodernwelfarestateisthegrowth
ofthewelfarestateitself.AsBeitoargues,whenthestatebeginsprovidingservicesand
performingfunctionsthathadpreviouslybelongedtothecareofcivilsociety,itcrowdsout
theseprivateinstitutions,whichtendtoatrophyinproportiontothegrowthofthestate.19

TheyearpriortotheestablishmentofMedicaid,poorfamilieshadhigherhospitaladmission
ratesthandidthoseinwealthierbrackets.Andwhilehigherincomeindividualshadan
averageof5.1doctorvisitsayear,low-incomeindividualshad4.3hardlyadramatic
difference.WhatMedicaiddidresultinwasadramaticdeclineinthereduced-costorpro
bonoservicesthatdoctorshadonceprovidedthepoorasamatterofroutine.Accordingto
historianAllanMatusow,Mostofthegovernmentsmedicalpaymentsonbehalfofthepoor
compensateddoctorsandhospitalsforservicesoncerenderedfreeofchargeoratreduced
prices.Medicare-Medicaid,then,primarilytransferredincomefrommiddle-classtaxpayers
tomiddle-classhealth-careprofessionals.20

AuthorJacobHornbergerrecallsgrowingupinLaredo,Texas,inthe1950s,atatimewhen
theCensusBureauhadlabeledthatcitythepoorestinthecountryonaper-capitaincome
basis.YetaccordingtoHornberger,Ineverknewofonesingledoctorwhoturnedpeople
away.Theytreatedeveryonewhocameintotheiroffice.Ineverheardofadoctor
complainingabouthavingtoprovidefreeservicestothepoor.21

Andhowweredoctorsdoinginthosedays?

Theywereamongthewealthiestpeopleintown,Hornbergersays.Themoneytheymade
fromthemiddleclassandthewealthyandthepoorwhocouldpaysubsidizedthepatients
whocouldntpay.Thosewhoreceivedfreecareweregratefultoreceiveit,andtypically
broughtthedoctorin-kindgifts.

Whengovernmentgotinvolved,animpossibleregulatorythicketinvadedandcomplicated
medicinetothepointthatphysiciansbeganretiringearly,havingcometodespisea
professiontheyhadonceloved.Meanwhile,amongpatientsasenseofentitlementbeganto
supplantthenormalhumaninstinctofgratitude.Whathadoncebeenaharmoniousand
mutuallysatisfyingrelationshipbecamefrustratingforeveryone.

11
Theveryfactthatpeopletoday,solongaccustomedtogovernment-providedmedicalcare,
wouldactuallywonderwhatwouldhappentothepoorunderasystemwithoutgovernment
coercionshows,asHornbergersays,whatAmericaswelfarestatehasdonetopeoplesfaith
inthemselves,inothers,andinafreesociety.

Tobesure,therearemeasuresthatcanbetakentoreininhealth-carecosts.Employersshould
befreetooffertheirworkersachoicebetweencontinuingtoreceiveemployer-provided
medicalinsuranceorinsteadreceivingthetax-freecashequivalentofthepresentaveragecost
ofsuchinsurance(say,$10,000to$15,000,indexedforinflation).Thischangewouldmake
cleartoemployeesthatthemoneyanemployerpaysfortheirmedicalinsurancecomesoutof
theirownpocketsintheformoflowersalaries.(Rightnow,mostworkersdoubtlessconsider
theirfringebenefitstobefree.)Iftheemployeechoosesthetax-freeincome,hewouldthen
haveamuchgreaterincentivetocarryonlyahigh-deductiblepolicy.Thatis,sincehecan
pocketanymoneyhedoesntspendonhispolicy,hehasanincentivetokeepthatpolicy
inexpensive.High-deductiblepolicies,inturn,makepeoplemorecostconscious,sincemore
oftheirmedicalexpensescomeoutoftheirownpockets.Andunderthisarrangement,the
typicalworkerwouldsavemorethanenoughtopaythefulldeductibleonwhatever
insurancepolicyhemaychoosetopurchase(shouldheevenneedthatmuchmedical
attentioninayear),withmoneytospare.22

Ifafreemarketinmedicalcareisnotpoliticallyfeasibleasapolicyoptionforthewhole
country,economistFredFoldvaryofSantaClaraUniversityproposesthatindividualsbe
allowedtochooseitforthemselves.HecallsittheCompletePrivateMedicalOption(CPMO).
Peopleoptingforitwouldforfeitallformsofgovernmentmedicalassistance,buttheywould
alsoenjoyexemptionfromallformsofgovernmentmedicalrestriction.Foldvarymakesan
exceptionforemergencyservices,butsaysthatanyonechoosinghisplanwouldbeineligible
foranyothergovernmentmedicalbenefit.Ontheotherhand,theywouldpaynotaxesfor
medicalservices,includingtheMedicareportionofpayrolltaxesandthesalestaxeson
medicalproducts.Theywouldbeexemptfromlicensinglawsanddrugrestrictions,suchthat
theycouldpurchasemedicalservicesfromanyonetheywishedaccordingtotheirowngood
judgment,andobtainanydrug,dietarysupplement,ormedicalservice.Theycouldpurchase
anykindofmedicalplanfromanywillingprovideranywhere.That,exceptingafew
technicaldetails,isFoldvarysplan,whichhecontendswouldestablishafreemarketin
medicinealongsidethegovernment-controlledalternative.

Whatelsecanbedone?Uponreachingagesixty-five,Americansshouldbegiventheoption
ofgivingupfederalentitlementbenefitsinexchangeforcompleteexemptionfromincometax
fortherestoftheirproductivelives.Likewise,suchindividualsshouldbeexemptfrom
taxationofanyinterestanddividendincomethataccruesfrommoneytheysavefromtheir
tax-exemptincome,andanythingtheyhandontotheirheirsfromthatincomeshould
likewisebeexemptfromestateandgifttaxes.Theincentivesthuscreatedwoulddoubtless
makeasubstantialdentintheMedicareandSocialSecuritycrisesbydramaticallylowering
thenumberofpeopledemandingpaymentsfromthoseprograms.23

Medicallicensureisunlikelytobegoinganywhere,sodeeplyentrenchedisthespurious
public-goodjustificationforthisbarriertoentry.Shortofremovingthatrequirement,some
measuresmightbetakenthatwouldpainlesslyincreasethesupplyofphysicianservicesand

12
therebyreducecosts.Everyphysicianmightbegrantedtherighttoselect,say,sixindividuals
whomhemighttrainandsupervise,andwhowouldserveasassociatephysicians.Thus
thephysiciancouldextendthebenefitsofhisownlicensetosixindividualsofhischoosing.
Thoseindividualsmightbedrawnfromapoolofcandidatesconsistingofpeoplewhohave
attainedsomedegreeofdistinctionwithinthemedicalfield.Thephysiciancoulddelegateto
themwhatevertaskshisgoodjudgmentandtheirqualificationsjustified.24Sucha
liberalizationoflicensingrequirementswouldmean,inpractice,thatsomeonewithstrep
throat,ifhispharmacistwereanassociatephysician,couldbeexaminedandgranteda
prescriptiononthespot,ratherthanhavingtomakeanexpensiveofficevisit.Aregistered
nurseorparamedicmightsetabrokenlimbandputitinacast.Obviously,theefficiencyand
costgainswouldbesignificant.Accordingtosomeestimates,nursescouldprovideasmuch
as80percentofthemedicalcarethatprimaryphysicianscurrentlydeliver,andatonly40
percentofthecost.25

Thereseemtobetwomajorperilsofhealth-carereform.Oneisintensifyingtheveryfactors
contributingtotheincreaseinmedicalcosts,whichispreciselywhattheObamaplandoes.
Theotherisimplementingpiecemealreformsintherightdirectionatatimewhennothing
shortofradicalsurgerywilldo.TheMedicarecrisis,tosaynothingofthehealth-carecrisisas
awhole,ismuchtooseveretobedealtwithbyanythingshortofacompleterevolutioninour
expectationsandphilosophyofgovernment.Itisnotanideologicalstatement,butapractical
one,toconcludethatthesystemcanbefixedonlyifwereturntoindividuals,families,
doctors,andcommunitiesfullcontroloverdecisionspertainingtotheirownhealthand
well-being.

13


Chapter2

TheWorld'sMostAffordableHealthCareHereintheU.S.?
(withDr.JoshUmbehr)

Dr.JoshUmbehrisaphysicianandtheownerofAtlasMD,adirectcarepractice.Thiswas
episode481oftheTomWoodsShow.

WOODS:Idliketotalkaboutyourpracticefirstofall,whichishighlyunusualfromthe
pointofviewoftheaverageconsumerofhealthcare,andtheaveragedelivererofhealthcare.
Iwantpeopletoknowexactlywhatitisyoudo,andthenIwanttotalkaboutthemore
generalquestionofgovernmentandhealthcare.SotellmeaboutAtlas.MDandhowits
differentfrommyneighborhoodphysiciansoffice.

UMBEHR:Well,inalotofwaysnothingsdifferent,andinsomewayseverythingsdifferent.
ItsMarcusWelbymedicinewithaniPhone,becauseitsgoingbacktowhatalotofpeople
rememberfromtheirdoctorintheolddays,wheretheyworkeddirectlywiththeirdoctor,
therewasnoinsurance,youpaidwithcashorchickens,andthedoctortookcareofyou.But
inoursystem,westartedwiththeideaofhavinginsuranceforthewrongthings.Wedont
havecarinsuranceforgasolineorhomeownersinsuranceforlawncare;whyhavehealth
insuranceforfamilymedicine,thebulkofwhatmostpeopleneed?

Andwewereabletoremovethatmiddleman,thethird-partypayer;westructureditalittle
differentlyonthebillingside,soitsaflatratepermonthbasedonage,justlikeagym
membership.Forthatmembership,yougetunlimitedhomevisits,workvisits,officevisits,
technologyvisitslikeemail,cellphone,texting,Twitter,Facebook,Skypebasically
whateverwewant,becausenowwerenotlimitedtowhatinsurancewillalloworpayfor.
Thenwehavenocopaysinouroffice.Anyprocedurewecandointheofficeisincludedfree
ofcharge,becausethatswhatthemembershipiscovering,justlikeanyequipmentinthe
gymisincludedatthebasemembershippricesostitches,biopsies,jointinjections,
ultrasounds,bonescans,lungscans,urinetesting,strepthroattesting,minorsurgical
proceduresallincludedforfree.

Thensomethingelsewedothatmakesusveryuniqueandvaluableiswholesalemedications,
labs,imaging,andpathology.Wehadaperfectexamplerecently.Weorderedsomeblood
workwehaveournegotiatedcashdiscountsofusually95percentandapatientsblood
workwasaccidentallybilledthroughtheinsurancerate,becauseofacomputermistakeatthe
lab.Thepricetheywerequotedwas$1,028.Weranthatbackthroughoursystem,anditcost
$39a97percentsavingsjustbycuttingoutthemiddleman.Anditsanamazing
opportunity;itsfarpastthe10ximprovementthatmostentrepreneursarelookingfor.

Wecandothesamethingswithmedications.WeoutcompetetheWalmarts,theCVSs,the
Targetsoftheworld,becausewehaveadifferentbusinessmodel.Wecandispense
medicationsinKansasjustlikeapharmacist.Forty-fourstatesallowphysicianstofunction
likethis,andsoIcanorderthemedicationswholesalefromthesameplacesthepharmacies
14
do,butIcanget1,000bloodpressurepillsfor$8.33.Evenaftermy10percentmarkup,theyre
underapennyapill.Walmartwouldliterallyhavetogivethemawaytoout-competeus,and
iftheydo,great;westillwin.Itsnotavaluethatsarevenuegeneratorforus;wereadding
tothevalueofthemembership,veryCostco-esque.

Sowecoulddrasticallyreducethecostsofpeopleshealthcareby80to90percent.Wecan
takeallofthevalue;wecangotoyouremployer;wecanrestructuretheirinsuranceplan,
decreasethepremiumsby30to60percent,yearone.Wehadanexampleofacompanyhere
inWichita,Kansas,18employees.Longstoryshort:from2013totheendof2014,they
decreasedtheirout-of-pocketcostsforinsurancefrom$98,000to$47,000,yearone.Now,
employeeshadunlimitedaccess24/7totheirdoctorcall,text,email,visits,hour-long
appointmentsifnecessary,freestitchesinsteadofgoingtotheERbutnoneofthatwas
claimedtowardtheinsurance.Eventheinsurancecompanylovesusnow,becausethey
realizetheyreinthebusinessofinsuringrare,catastrophicevents,notthedailythings.

Soinalotofways,wehaventdoneanythingdifferentthisisregularmedicine,regular
bloodpressure,regularstitches,regulardoctorsbuttheninotherways,wevedone
everythingdifferent.Theexcitingpartbutmaybethesadpart,tooisthatallthesepieces
wereinplaceforthelast20years.Anydoctorcouldbedoingthisgoingbackalongways.
Wedidntcreateanewwayofdispensingmedications,ofdispensinglabs.Thosediscounts
werealreadyavailableinsidethesystem.Itjusttookdoctorswhowerewillingtosay:the
systemsbroken,andImgoingtotakeaverylogicalbusinessapproachtothis.

Butthatsnotmedicine.Mymedschool,weweretaughtthatbusinessisbad,itsbeneathus,
itsunbecomingandunprofessionalofphysicianstodirtytheirhandswithit.Ofcourse,I
didntbuythat.Businessisthemostethicalofthings,becauseitforcesyoutoaskthe
question:whatisvalue,whatisright?AndIcangotoapatientandsay,youregettingyour
migrainemedicinefor$200amonthatthepharmacy;Icangetitfor$6.Thatisabettervalue
foryou.IfItakemyoathofdonoharmseriously,ithastoincludedonofinancialharm.
ThatmeansIshouldbetheconstantadvocateinanopenandfreeandefficientmarketformy
patients,lookingforthebestprices,thebestquality,guidingthemandbringinghighvalueto
them,justlikeAmazon,justlikeWalmart,justlikeanyotherindustry.Andsoasdoctorstake
thatresponsibilityon,theirpatientsarethebeneficiariesofthat.

WOODS:Afterlisteningtoeverythingyoujustsaid,Icanthelpwonderinghowwecan
possiblyaccountforthestaggeringscopeofthesavingsyouretalkingabout.Icouldseea
littlebitofsavingshereandthere,butthescopeofthesavingsyouretalkingaboutbasically
solvesthehealth-careproblem.Sowhatcouldpossiblybegoingonhere?

UMBEHR:Well,Ithinkweallunderstandthehealthcaresystemisbloatedandexpensive
andbureaucraticandcumbersome,andeveryonecomplainsabouttheredtape.Soifwejust
associatethatredtapeandbloatofthesystemandequatethattodollarsigns,itmakesperfect
sensewhyeverythingissoexpensiveandwhythehealthcaresystemisbroken.Butonthat
samemessagewouldbetheproofthatwecanlowerthefees.Actually,doingabloodtest
isntexpensive.Wevedonethatforsolong,andthecostofdoingthathasbeendrivendown
topenniesonthedollar.Itsthedeliveryofcare,itsthepaymentsystemthatisexpensive.

15
Sowhenwereinsuringtheequivalentofgasolineforcars,oilchanges,tires,
windshield-wiperfluid,thenweregoingtogetaverybloatedsystem.Itsnotthatinsurance
isbad;itsthatwevebeenusingitwrong.SoactuallyIblamedoctorsmorethanIblamethe
insurancecompanynotthattheyreblameless,buttherealfaultliesinthefactthatwere
usingitinappropriately.Einsteinsaidthatifyoujudgeafishbyitsabilitytoclimbatree,hell
foreverthinkhesunable.Andifwethinkthatweregoingtopinchthecostcurvebyadding
moreredtapetothesystem,thenwerefools.

Whatweneedisafree-marketsystem,andIthinkwecanallagreethattheresprobably
neverbeenamechanisminhistorythatwillfindefficienciesanddrivedownthecostofa
productanddriveupthequalityquitelikethefreemarket.Sowhendoctorshavetocompete
withotherdoctors,whenhospitalshavetobetransparentintheirprices,whentheprovider
ofcare,thedeliverer,istakingtheiroathtothenextlevelandsayinggoodbusinessresultsin
goodmedicine,whendoneappropriatelythisideathatmedicineisabovebusinessis
ridiculous.

ThereasonhealthcareisbrokenisthatwedonthaveaWalmartoranAmazon,aSam
WaltonoraJeffBezoswhohaveapathologicdesiretodrivedownthecostoftheirgoodsand
servicesbecausetheyunderstandwhatitmeanstobevaluable.Einsteinalsosaid,dontaim
tobeamanofsuccess;aimtobeamanofvalue.Ilovethatquotation.Wereconstantly
tellingthattootherdoctorslookingtostartwiththismodel.Howdoyouwanttobe
successful?Bevaluabletoyourpatients,andtheywillcometoamodellikethis.

Doctorswilltellme,well,Icantgetmypatientstopay$20fortheircopay;howamIgoingto
getthemtopay$50amonth?Well,a$20copayforaseven-minutevisitthatyoureanhour
latetoisnotavalue.Fiftydollarsamonthforunlimitedaccessis.NetflixtoBlockbuster.
Blockbusterhadanunpredictablefee-for-servicetyperevenuemodel,veryanalogoustoour
currenthealth-caresystem.Netflixfoundouthowtogiveme10,000videosfor$7when
Blockbustercouldgivemeonlyonefor$7.Soifweapplythatsameinnovationtohealthcare,
itonlystandstoreasonthatwecandrasticallyreducethecostcurve.

TheinnovatorsdescriptionorthestandardSiliconValleybarisa10ximprovement;you
havetobethatmuchbetterbeforethebarriertochangeisovercome.Wereat20xbetter.If
yougobacktothelastyearthatIhavedataforIthinkitwas2011thetotalcostforall
prescriptionmedicationsintheU.S.was$263billion.Thecostforallcancercarewas$157
billion.Andwecangetcancermedicinescheaper.Notallofit;noteverythingscheap.Some
stuffisjustexpensive.Butifyougetthatlower,andwehaveanexamplewherewehada
breastcancerchemotherapypillthatwas$600foreverytworefillsatthepharmacyand$7
withusaliteral99percentsavings.Wegaveittoherforfree,justsowecouldsaywewere
nowprovidingchemotherapy.Soletsjustbeminimalistsandsaywesaveonly$157billion
outofthat$263billioninprescriptionsforallthethingsthatareexpensive.Well,thenweve
paidforallcancercare.

Goalittlebitfurtherandtakeoutalltheadministrativeburdenofthat,theduplicationof
cost,thewasteandinefficiency.Sowhenwetalktoaninsurancecompany,theyllsayfamily
medicineasatotalcostisntenoughforustochangeifyoutakethatonesmallpiece.Isay
great,lookatthefullvaluepropositionundertheumbrellaofdirectprimarycare,andyou

16
willseeavaluethatwillincentivizeyoutochange,becausethatisallthecopays,allthe
procedures,allthefamilymedicinebillswipedaway,butthenextendthatouttothe
laboratory,thepharmacy,theimagingcenter.

NoonegoestotheERfor$1500institcheswhenIlldothemforfree.WhydoIdothemfor
free?SamereasonCostcodoesthingsforlowcost,lowprofit:toprotecttheirmembership.So
mystitchescostmeadollareach.TheyregoingtoexpireinayearifIdontusethem
anyway.Imightaswellatleastgetsomevaluewithmypatient.Andmyjob,justlikeJeff
BezosandjustlikeSamWalton,istosaveyoumoney,andmakeyouhealthy.SoifIsaved
you$1500onyourstitches,youregoingtocomebackwithme,youregoingtostaywiththis
membership.Ivebecomevaluabletoyou,andthatshowIbecomesuccessful.

Andintheprocessofappropriatelyaligningtheincentivesfromdoctortopatientto
insurance,ortoemployerandtoinsurance,wechangedthesystem.Justsomethingassimple
asthattransparencyinprice.IhaveitonmydesktopassomethingIneedtopostforsocial
media,anexampleofwhatsbrokenwithourhealth-caresystem:name-brandpricefor30
pillsofamedication,$268.Mygeneric,$5.39.Sowhenyoualigntheincentivesappropriately,
noemployeewantstopay$268outoftheirdollarsforaname-brandmedicationthatsno
betterthanthe$5equivalent.Soyousavedthesystem$263justbyappropriatelyaligningthe
incentives.Whatpatientwantstosubmitabilltotheirinsurancetowashtheircar?Itmakes
nosense.Whywouldyousubmitabilltoyourinsurancefora$5medication?Sowestart
removingadministrativecosts,westartputtingthetruecostofcaredirectlyinthehandsof
thepatient,andtheycandecidetobeasaggressiveorconservativeastheywant.Andthat
makesaveryfreeandefficientmarket.

Walmart,Target,Amazonallknowtheyreconstantlycompetingagainsteachotherfor
similarproducts.TVX,Icangoonandfindoutthepriceandcompare,anditsgoingtobe
withinamarginaldifferencefromeachstore,becausetheyknowwhattheotherstoresare
sellingitfor.Butmedications?Icanpullyouupone,usingafree-markettool,GoodRx.com,
andoneofmyfavoriteexamplesisImitrex,amigrainemedicinethatatthepharmacy,forthe
namebrand,asIpullitupnow,is$565cashprice,anywherefrom$447to$486witha
coupon.Thegenericis$260cashprice,aslowas$101thatIgetfor$5,mypatientgetsfor
$5,becauseIdontneedtomakerevenueoffthemedication.Imtryingtomakethem
healthier;Imtryingtosavethemmoney;Imtryingtoshowthevalueofmymembership.

Soeverymonththeyrefillthatmedicine,Imsavingthematleast$100.Theirmemberships
$50,theirmedicines$5.Imgivingthem$45oftheirlifebackthatslife,thatstime,thats
energy.Sowhensomeonesays,well,thisonlyworkswellfortherich,forthehealthy,thats
ridiculous.Thisworksoutbestforthesickandthepoor.Justlikeanymarket,Imreaching
thepeoplemostlikelytobenefitfromafoodserviceoraphoneserviceoracarservice.Sothe
peoplewhowanttosavemoneyontheirmedicinesandaresickenoughtoneedmedicines
benefitthemostfromthissystem.

Sothegovernmentispaying$101forthatmigrainemedicineinsteadofthe$5thatthey
shouldbe.Walmartdoesntwantafreemarketinmedication,becausetheyrecompeting
againstaveryinefficientsystem.CVSgetstochargethatmuch;Targetgetstochargethat
much.And65percentofallprescriptionsarecontrolledbynowfourlargecompanies.Butit

17
onlytakesonespotofinnovation,onedoctorlikeustosay:Illdoitdifferent;Illbethelittle
companythateatsthebigcompany,becauseIlloffervaluethatyoucantcompareto,
becauseImlookingoutformypatient.Ifphysicianshadbeendoingthatthewholetime,
wedhaveacompletelydifferenthealthcaresystem.

WOODS:IfIlistentosomebodylikeBernieSanders,orindeedanytypicalpolitician,I'llbe
toldthatwhatwehaveinhealthcarenowiscapitalism,andthatswhat'sgivenusallthese
problems.Whatdoyousaytothat?Secondly,sinceImsureyoudontbelievethat,where
diditallgowrong,sothatwehavealltheseperverseoutcomes?

UMBEHR:Ithinkwehavecapitalisticcomponentstoourhealthcaresystem,butwhenI
believethestatisticisthat52or53percentofallhealthcaredollarsarepaidforbythe
government,betweenMedicare,Medicaid,stateagencies,youdonthaveafreemarket.
DoctorshavetooptoutoftheircontractwithMedicareandthegovernmentpenalizesthem
fortwoyears,thattheycantcomebackin.Thatsnotafreemarket,thatsnotfreeflowof
providerstoservicestopeopleinneed.Therestrictivecontractsthatwehavewithinsurance
companiesisntafreemarket.

IfyouwanttocompareMedicaidtoLasikeyesurgeryandagain,yes,thisisapplesto
orangesbutbroadterms,moststatescanshowthatMedicaidpatients,inapure
governmentsystem,haveworsehealthoutcomesthanuninsured,becauseatleastIcan
chargeafairpricetoanuninsuredpatientandmakemoney.Medicaid,IamtoldwhatIcan
chargethatsnotcapitalismandIlosemoneyonthatthatsnotcapitalismandsoI
donttakethosepatientsbecausetheyrenotavalue,andIcanonlylosesomuchmoneyand
keepmydoorsopen.Sotheyendupgettingworsehealthoutcomes.Thatisabadgeof
recognitionthatdoesnotservethemwell,whichistosay:IhaveaMedicaidcard.Now,it
coverssomethings,great,butitstilldoesntresultingreatoutcomes.

ComparethattosomethinglikeLasiksurgeryforeyes,wherethecostcontinuestogodown
andthequalitycontinuestogoup,becausethereslittletonogovernmentregulationonthat
end.Sothemarketisfreetomoveforwardasquicklyaspossible.
AnothergreatanalogywouldbetheiPhonetomostmedicaltechnology.Mostmedical
technologyisadecadebehindwherewearewithanythingelse.ButtheiPhone,withlimited
governmentrestriction,cancreatethebestsoftwarethattheyknowhowtomakeandmeet
theneedsoftheirclientsinwhateverwaytheyseefit,tothepointnowthatabillionapps
havebeenmade.Okay,fantastic.Butthatswithoutregulationandeverybodysfreetocreate
auniqueproduct.

Governmentdictateshowwecreatehealth-caresoftwareandsays:togetpaidbyus,and
werethe800-poundgorilla,ithastodomeaningfuluseorithastodoICD-10,whichis
comingdownOctober1,andweregoingtogofromamandatory15,000differentbilling
codesto155,000differentbillingcodes.Theyarecontinuallypullingoutcomponentsofthe
freemarketandcomplicatingitwiththeirbureaucracy.SoIthinkweregoingtogetallthe
loveandattentionoftheDMV,withalltheefficiencyofthepostoffice.

WOODS:Butwhataboutalltheseexamplesofcountriesthathavesingle-payersystems,and
ifyoupollthepeoplethere,theysaytheylovetheirhealthcaresystem?

18

UMBEHR:Oh,theydoiftheydontuseit.Andtheresplentyofdatatoshowandof
coursepeoplewilldisagreeonthisbutifyouactuallylookatthedata,agreatexample,the
WorldHealthOrganizationsaysthatwerank38thintotalhealthcare,rightbelowCuba.
Well,whentheycantblindyouwiththeirbrilliance,theyregoingtobaffleyouwiththeir
data,andlies,damnedlies,andstatistics.Whatweknowisthatstudywashorriblyflawed.
Theyweresupposedtorepeatthateverysooftenlikeacensus;theyneverrepeateditagain
becausethedatawassobad.Cubajustself-reporteddata,andtheirself-reporteddatasays
theyrebetterthantheU.S.sdata.Butweactuallysubmittedinformation.

Partofthatisthegradingcriteria:youpre-weightthescalessothatthepeopleyouwantto
win,win.Sopartofthatisthegradingscaleforhowpointsareawardedtorankhealth-care
systemsisbasedonegalitariandistributionofhealthcare.Well,Cubahasaveryegalitarian
distributionofhealthcare.Everybodygetsthesameawfulhealthcare.Andcountrieslike
Canadawontdiagnosecancerafter75.

Infantmortalityisagreatexample,becausethereareveryfewcountriesthatstrictlyfollow
theWHOsdefinitionofwhatisconsideredaninfantdeath.Basically,ifitcomesout
breathingandwithabeatingheart,itwasaliveinfant.Anythingafterthatisaninfant
mortality.Somecountrieswillchangethatdataandgiveitamonthbeforetheyllconsiderita
livebabyandanydeathinthefirstmonthoflifeisconsideredastillborn.Sowerenot
comparingfairdatatofairdata.ButIthinkyoucansay,wellyes,uscomparedtoSecondor
ThirdWorldcountries,ofcoursewehavebetterinfantmortalityrates,butwereactually
beingmorehonestwiththedatathanothercountries.

Sothosearethethingsthatdontgetreported.Maybewehaveworsehealthcareoutcomes
andwespendtwiceasmuch.Again,itsabitofastraw-manargument.Wealreadyknowwe
spendtoomuchbecauseofabloated,bureaucraticsystem,mostofwhichthegovernmenthas
created.Inoursystem,wehavenoredtape.Ifapatientwantsamedicineandits
appropriate,wegivethemthemedicine.Theresnoadministrativecostinvolved.The
averagephysicianwouldhavesevenemployeesperdoctortorunapractice.Wehavehalfof
afull-timeequivalentperphysician,becauseoflessregulation,lessredtape,less
bureaucracy.Thatwoulddrivedownthecostofcare.

Soyes,Americamaybemoreexpensive,butwegetbetteroutcomes,butwealsobuywhat
wewant.IfIwanttogototheERbecauseImworriedaboutsomething,Ican.Notevery
countrycandothat.IfIwanttohaveaneyesurgerythatmaybemoreelective,Ican.In
Canada,youcant.IfIwantanMRIbecauseImconcernedaboutmyback,Icangooutand
purchasethatontheopenmarket.InCanada,youcant.Sojustbecausewespendmoreand
wegetdifferentoutcomesdoesntnecessarilymeanthatthosearebetterorworse.Thoseare
consumerdecisionsmadebasedonwhatpeoplewantfortheirhealthcaredollars.AndIllbe
thefirsttoagreethattheresalotofbloat,butattheendoftheday,westillhavemore
options,morechoicetodecidewhatwewanttodo.

IthinkMalcolmGladwellsaiditbestrecentlywhenhewasinterviewedforaphysician
website.Hesaidthathesoccupiedeverypositiononthebellcurvefromsocialisthealthcare,
Canadianhealthcaretofreemarket,andnowhesonthefree-marketside,wherewe

19
probablyneedlessinsurance,lessgovernment,lessbureaucracy,becausethosethingsarent
addingvalue,butareaddingacost.Sothefactthatwecanremoveallthatcostandstillgive
ourconsumer,ourpatient,highchoice,isabedrockofAmericancapitalism.

WOODS:Thewholeinsurancesystemthatwearestuckwithasyounote,theres
somethingoddaboutthefactthatyouhaveinsurancetogetanordinarycheck-up,butyou
donthaveinsuranceforalltheotherthingsyouknowyouregoingtodo.

UMBEHR:Right.

WOODS:Insuranceistraditionallyforthingsyoudontexpecttohappen.Andthisseemsto
havegottenstartedasaresultofapeculiarfeatureofthetaxcodethatduringWorldWarII,
whenthewageandpricecontrolswereineffect,youcouldntattractadditionallaborby
raisingwagesbecauseitwasillegaltodoso,butyoucouldofferfringebenefits,whichin
somecasesamountedtohavingyourhealthcarepaidforpre-tax,andthenthisbecamea
demandthatlaborunionshadforthefuture,anditwoundupembeddedinthewhole
system.

Idowanttoaskyoubeforewewrapup:howisObamacaregoingtoaffectthekindof
practiceyouhave?

UMBEHR:Well,slightlytongue-in-cheek,Improbablyoneofthefewphysiciansexcited
abouttheAffordableCareAct,becauseandthisislessObama;Bushwasnofriendofthe
freemarketattheendofhiseightyears.Everypoliticianraisesthecostofgovernmentand
healthcareandbureaucracyandregulation,soitwasbrokenbeforeObama;itllbebroken
afterhim.Butheisspeedingitup.TheAffordableCareActiscomplicatingthedeliveryof
caresomuchthatitsdrivingdoctorsoutofpractice.Itsmakinginsurancegoup40percenta
year.InKansas,BlueCrosshasquotedthattheiraverageincreasewillbe37percentgoing
into2016,becausewereinsuringtoomuch.Soasinsurancecontinuestogoupbasedinlarge
partbecauseofgovernmentreformandwehaventraisedourpricesinfiveyears:$10for
kids,$50permonthforalltheaccessthatweofferthedeltacontinuallylooksbetterinour
favor.

Infact,Idontknowifourmodelwouldsucceedinaneconomichighpoint,becauseas
incomesarehigh,theresnoneedtochange.Peoplearecomfortablewiththestatusquoas
longastheycanaffordthestatusquo.Wealmostneedsometurbulenceinthemarketfor
peopletoseethevalueofinnovation.AndifItriedtosellyoucarinsurancethatsstructured
likehealthinsurancenow,youwouldnttakeit.Itwouldntmakeanysense.Butwestayin
thestatusquoofhealthcarebecausethatsthewaywevealwaysdoneit.

SotheAffordableCareActisprovidingsomeamountofpressuretoincentivizepeopleto
lookformorelogical,moreaffordable,morecommonsenseoptionsforinsuringtheir
high-riskhealthcareandforpayingfortherestoftheirhealthcarefromdoctorswhopractice
insurance-freemodelslikeourselvessothatnow,insteadofpayinga$25or$30copayfora
$50bloodtest,theypaythedoctordirectly$1.64forthatsamebloodtestanddontinsurethat
andpocketthesavings.Soadowneconomy,increasinggovernmentregulation,increasing
businessstressbecauseofcompliancewithabloated,bureaucraticregulatorysystemallof

20
thatdrivesdoctors,patients,employers,andeventheinsurancetoamodellikethis.That
painpointhasnowhiteverykeyplayerinthehealthcaresystemtothepointthattheyare
activelyseekingoutinnovativesolutionstosurvive.

Ifyouenjoyedthischapter,you'lllovetheTomWoodsShow,whereIreleasecontentlikethisevery
weekday.Checkoutthefulllistofepisodes,alongwithlinkstosubscribetotheshowforfree,at
tomwoods.com/episodes.

21


Chapter3

WheretoFindExtremelyAffordableHealthCoverageandItIsn'tObamacare
(withDaleBellis)

DaleBellisisexecutivedirectorofLibertyHealthShare.Thiswasepisode165oftheTom
WoodsShow.
WOODS:TellusaboutLibertyHealthShare.
BELLIS:LibertyHealthShareisanational,non-profitcommunityoflike-minded
Americanswhosimplyhavechosentoshareeachothersmedicalcosts.Sowithoutthehelp
ofaninsurancecompanyorthegovernmentwemutuallyshareourcoststogether,andits
asystematicmethodthatsdependableandtransparentandverycosteffective.
WOODS:AndalsoexemptfromtheAffordableCareActso-calledObamacare.
BELLIS:Yes,thankfullybuiltintotheAffordableCareActisanexemptionforwhatitcallsa
healthcaresharingministry.Andsobaseduponcertainreligiousperspectivesand
exemptionswereabletodothiswithintheconfinesoftheAffordableCareActandnotbe
subjecttoanyfinesorpenaltiesfornothavinginsurance,becausewereallself-paid
patients.Itsnotaninsuranceprogram.Itsjustmutualassistancetooneanother,andit
worksbeautifully.
WOODS:SoevenbeforeObamacarecamealong,youguyswereexemptfromwhatever
regulations,whateverbureaucraticstructureexiststooverseetheinsuranceindustry.
BELLIS:Yes,weareagroupofhealth-consciousAmericanswhohavepracticedtime-tested
principlesChristianshavebeenobservingforover30yearsabouttheirhealthcare,andweve
beeninexistenceandactivelysharingexpensestogethersincebefore1990.
WOODS:Howdoesthiswork?SupposeIjoin,andIhavesomemedicalprocedure.I
submitittoyou,andthenwhat?Haveyoudonetheactuarialestimates,soyoucan
anticipatewhateverybodysmonthlypaymentoughttobe,ordoeseverybodysmonthly
paymentfluctuateonthebasisofhowmanypeoplearehavingproceduresthatmonth?
BELLIS:Wecalculateonanannualbasiswhatourmonthlyshareamountisgoingtobe,so
itdoesn'tchangemonthtomonth.Soeachmontheveryonesshareismatchedtoanother
membersmedicalexpenses.Withoursecure,onlinetechnologyyousendthat
predeterminedshareamountdirectlytoanothermemberwhohasthemedicalexpenses.
Dependingonwhetheryouaresingleoracoupleorafamily,wehavesetshareamounts
forthosedifferentcategories.Shouldeveryouhavemedicalcosts,asufficientnumberof
singles,couples,orfamiliesaredirectedtocontributetheirmonthlyshareamountdirectly
toyouequaltoyourexpenses.

22
WOODS:Howdoyourmonthlyratescomparetothemonthlypremiumsomebodywould
paywithtraditionalinsurance?
BELLIS:Well,itisfarlesscostly.Wereabletoshareourmedicalexpensestogetherfor
severalreasons,andIcangothroughthose,butforseveralreasonswerefarlowerthanthe
ordinaryhealth-carecostsoutthere.Wesharemedicalbillsafteramodestamountweagree
toberesponsiblefor;oncethat(quitelow)thresholdismet,sharingcommences.Uptoa
milliondollarsperincidentis$199monthlyforasingleperson,$299foracouple,$449fora
family.
Wefindthatoneofthesidebenefitsofchoosingourownwayintermsofmanagingand
directingourownhealthcareisthatwecutoutalotoftheoverheadcosts,andthe
middlemanexpense,andminimizetheexpensesofhealthcaresignificantly.
WOODS:Explainfurtherhowyou'reabletokeepcostsdown.
BELLIS:Onereasonisthatwesharetheactualmedicalexpensesofourmembers.Thatis,
wedonotdoactuarialprojections(whicharetypicallyaninflatednumber)astraditional
insurancecompaniesdo.Sowheneveramemberhasanexpense,wesharetheactualcost
asopposedtosomeprojectedamountinthefuture.Andsecondly,ourmembersaccessa
veryrigorousmedicaldiscountsystem.Weenjoyabouta50to60percentdiscountonour
medicalbills.Soweendupsharingthetruecostofhealthcare,notaninflatedretailcost.
Andwekeepourcostsdownbyattractinghealth-consciouspeople.Now,younoticeI
didntsayhealthypeoplebuthealth-consciouspeoplepeoplewhotakeresponsibilityfor
theirhealth.Soourcostsarejustawholelotlower.
WOODS:Istillcanthelpthinkingaboutmyownsituation,though.Forinstance,wejust
hadababy,andthebabyhadtobeinneonatalintensivecarefor11days.Inourview,by
theway,shedidn'tneedtobethere.Theyclaimedtheyneededtowatchtomakesureshe
couldgainweight.Mywife,whohasalotofexperiencewithchildren,said,Impretty
sureifIbringherhome,shellgainweight.Well,ofcourse,shehasflourishedandgained
farmoreweightathomethanshedidinthehospital,justasmywifepredicted.
BELLIS:Well,thatsexcitingtohear.
WOODS:Butapparently,allthingsconsidered,werackedupabillof$42,000.NowwhenI
gettheBlueCrossstatementandIlookatthebreakdown,someofitispaidforby
insurance,buttheresanothervery,verysubstantialsection:contractualproviderwrite-off.
Inotherwords,theresanagreementbetweentheinsurancecompanyandtheproviderthat
wereabiginsurancecompany,soyourejustgoingtolowerthatfeeway,waydown,and
thenwellpaytheremainder.Asaresult,ourout-of-pocketexpensewoundupbeingalittle
over$3,000whentheoriginalbillhadbeen$42,000.Howcouldyouguyssavesomuch
moneyinthiswaythatyoucouldcomparablyreduceabilllikethat?
BELLIS:Wehavecreatedareimbursementsystemtoourproviders,doctors,hospitals,
ancillariesthatourmedicaldoctorsreadilyandquicklyandgratefullyacceptthatbasically
createsavalueforeverymedicalprocedureknowntomankind.Therearethousandsof
thosemedicalprocedures.Weveassignedavaluetothem,andwecommunicateinadvance
23
toourprovider:hereisourreimbursementschedule.Wereagroupofindividualswhoare
allself-paidpatientsbutweresharingourbills,andhereshowwereimburse.Andthey
readily,happilyacceptit.Iteliminatestheoverheadcostofhavingtoarguewithan
insurancecompany.
Everydoctorandhospitalrunsareporteverymonthastothereimbursementstheyarenot
goingtoreceivefromtheinsurancecompanybecausetheysubmittedtheclaimsinsome
waythatfelloutsidethecontract.Theygetstuckwiththebillinthosecases.Noneofthat
stuffwithus.Wedontrequireadministrativeoverheadwithagroupofpeoplecallingupa
gatekeepertryingtogetpermissiononstuff.Itjusteliminatestheircosts.Ithelpsus
maintaintheefficiencyandcost-effectivenesssothatwereaccessingthetruecostofhealth
careandourprovidersreadilyparticipateandacceptit.
WOODS:Howmanypeoplewouldyouestimatearepursuingthis,letssay,
non-traditionalapproachtomedicalprovision?
BELLIS:IntheUnitedStatestodaythereareabout150,000householdswhoaresharingtheir
medicalbillstogetheronavoluntary,cooperativebasis.Thereareanumberofcost-sharing
ministrygroupsoutthere.Wearesomewhatdifferentfromtheothersinthatwehavea
muchmorerobustonlinetechnologythatweuseasopposedtothemail.Soyourshare
amountsgoingonlinetoanothermembersonlineaccount.Thatsnumberone.Butnumber
two,whilewearespirituallybased,wedonotimposeaspecificfaithrequirementonour
membersbecausewewanttomakeitasbroadbasedandasopentoasmanyaswecan.
WOODS:Thatwasgoingtobeoneofmyquestions,whethermembershavetobe
religiousingeneral,Christianinparticular,orneither?
BELLIS:Well,theydoneedtobereligiousingeneral.Anyonecanparticipatewith
uswhojoinsinwithagreeingwithoursharedbeliefs.Icanrunthroughthose
quicklyinamoment.Butoneofourmostfundamentalisthatourrights,our
liberties,ourfreedomsasindividualscomefromGod.Theydontcomefroman
agencyofmanorfromthegovernment.Soitwouldbesomewhatdifficulttobean
atheistandjoinourgroup.Butitisasharedbeliefonwhichourentirenationwas
founded.Itsafundamental,corebeliefbothwithourgroupandthosewhowere
ourFoundingFathers,whobelievedourrightscamefromGod.
WOODS:Thereasonyoureabletodowhatyouredoingisthatthereisareligious,Idon't
knowifexemptionisquitetherightword,but
BELLIS:Itis.Yes,thatsthecorrectword,Tom.
WOODS:Okay,sothereisareligiousexemptioninObamacareandfromgeneral
regulationpertainingtoinsurancebecause,asyousay,itsnotstrictlyaninsurance
program.Itdoesntfollowtheprinciplesofinsurance.Itsasharingprogram.Butifyou
hadjustsaid,wewanttohaveaprogramwherewesharemedicalexpensesandwerea
bunchofhealthypeople,andwewanttosharemedicalexpenses,theywouldnotallow
youtodothat.Isthatwhatyouretellingme?

24
BELLIS:Thatscorrect.TheAffordableCareActrequiresthattherebeasetofshared
religiousorethicalbeliefs.Andourbeliefsystemisbasicallythefollowingfivepoints.One,
thatourrightsrathercomefromGod.Two,thatwehavetherighttoworshipaswechoose.
Three,thatwehavetherightandspiritualobligationtohelpourfellowmanwhenheisin
need.Four,wehavetherightandagain,theobligationtomaintainahealthylifestyle
andtreatourbodiesinwaysthatdontproducesicknessordisease.Andfive,thatwehave
therighttoadministeranddirectourownhealthcarefreefromgovernmentintervention
andoversight.Thoseareourreligiousandethicalbeliefs.
WOODS:Doyoumakeanyefforttogettestimonialsfrompeopleordocumentationthat
theyareregisteredwithachurch,oranythingofthatnature?Ordoyoumoreorlesstake
themattheirword?
BELLIS:Wetakethemattheirword.Itsanhonorsystem,andtheyjustsimplysignoffon
thosesharedbeliefs,andwewelcomeanyonewhowishestojoin.
WOODS:HastherebeenanincreaseininterestinwhatyouredoingsinceObamacare
cameontothescene?
BELLIS:Oh,there'sbeenadramaticincreaseofinterest.
WOODS:Areyouconcernedthatthisdramaticincreaseininterestinwhatyouredoing,
and,Iamsure,tosomeextentalsoanincreaseinpublicawarenessofwhatyouredoing
andexposuretowhatyouredoingmaybeadouble-edgedsword?Ontheonehand,its
wonderfultohavemoremembers,anditmakestheprogramworkbetterthemore
membersthereare.Butontheotherhand,themorevisibleyoubecomethemorethe
totalitariansinourmidstrealize,waitaminute,theresonesmallsliverofmankindthat
hasntbeensubjectedtoourstultifyingrules.Areyouconcernedaboutthat?
BELLIS:Well,whileitstruethattheAffordableCareActgivesusthisbasisorthisplatform
onwhichtooperate,andweareopentoanyonewhowilljoininwithusonourshared
beliefs,frankly,Tom,itsnotforeverybodybecauseitisachangeofmindsetregarding
healthcareandhowhealthcareispaidfor.Itsreallyaparadigmshift.Webelievethatone
mustchangefromsimplyhavingsomeoneelsetakecareofus,andinsteadtake
responsibilityandbefocusedoncaringforourselves.Andasself-paidpatients,wedirect
andmanageourownhealthcare.Soratherthanreceivingfromathirdpartyoutthere,with
someoneelsetakingcareofthebill,wefocusonourowncosts,ourowntreatments,our
ownexpenses,andwesharethemtogether.Thatsanentirelydifferentmindset.Itsfrankly
notforeverybodynoteveryoneidentifieswiththatapproachtohealthcareandthewayin
whichweshouldmeetthoseexpenses.
WOODS:Thatstrue.Ontheotherhand,Iwouldsaymyaudience,vastlyoutof
proportiontoitsnumbers
BELLIS:Well,thenwewelcomethemall.

25
WOODS:Exactly;itsgoingtohavealotofpeoplewhothinkabouttheirentirelivesin
exactlythatway,notjustmedicalcare.Beforewewrapup,whathaveIleftoutthatwe
shouldtalkaboutaboutthis?
BELLIS:Well,justthefactthatweexistforhealth-consciousAmericans,andwhenyoujoin,
numberone,yourcostswillremainlowbecausethatsourprimaryobjective,todoitina
cost-efficientway.Numbertwo,youllknowwhereyourmoneyisgoingbecausewehavea
verytransparentonlinesharingsystem,andeverymonthyouseeexactlywhereyourshare
amountisgoingtoafellowmemberwhomyoucanmessagewithencouragement,with
cheer,withprayer.Sonotonlydowetakecareofeachothersmedicalcosts,butwealso
giveeachotherahuginthemiddleoflifesmostincrediblydifficultcrises.What'smore,
youllbeabletomakeyourownhealthcaredecisions,andyoucanchooseanydoctoror
hospitalyouplease.CheckusoutatLibertyHealthShare.org,orgiveusacallat
855-58-LIBERTY.

Ifyouenjoyedthischapter,you'lllovetheTomWoodsShow,whereIreleasecontentlikethisevery
weekday.Checkoutthefulllistofepisodes,alongwithlinkstosubscribetotheshowforfree,at
tomwoods.com/episodes.

26


Chapter4

ObamacareandMedicare:APhysiciansView
(withJaneOrient)

Dr.JaneOrientreceivedherM.D.fromtheColumbiaUniversityCollegeofPhysiciansand
Surgeons,andhasservedasexecutivedirectoroftheAssociationofAmericanPhysicians
andSurgeons.Thisisdrawnfromepisode147oftheTomWoodsShow.
WOODS:Somepeopleareconcernedaboutthosewithpre-existingconditions,andthe
difficultiestheywouldhavegettinghealthcoveragewithoutsomethinglikeObamacare.
Howdoyouanswerthat?
ORIENT:Well,itisaproblemthatwascreatedbythegovernment,byhavingasystemof
insurancethatisexemptfromtaxation,ifandonlyifitsboughtbyyouremployer.Soevery
timeyouchangejobs,youhavetobeunderwrittenagain.Soatanytimeduringyourlife
youcoulddevelopapre-existingcondition.Whatwereallyneedisasortofinsurancethat
isnon-cancelable.Youbuytheinsurance,andyoukeepitinforcecontinually.Wedont
cancelitjustbecauseyoudevelopacondition.Sotheresonlythepre-existingcondition
once.Andifyoureresponsibleyoupayinsurancewhenyoureyoungandhealthy,and
thenyoukeepitinforceallthetime.ButtheresnoincentivetodothatunderObamasplan
orundertheill-advisedplansinstateslikeNewYorkandNewJerseythatsay,oh,wecant
chargeyouforpre-existingconditions.Thatwouldbemean.Wellchargeeverybodythe
samethingforthepolicywithmaybesomeagebandsorsomething.Thismeansthatits
stupidtobuyinsurancebeforeyouresickbecauseyoucanbuyitatthesamepriceonceyou
getsick.
WOODS:Haventtheytriedtocopewiththatproblembysayingtheresalimitedrangeof
sign-upperiodsduringtheyear,therebylimitingpeopletryingthisstrategy?
ORIENT:Yes,thatscalledtheopenenrollmentpolicy,andinfact,thatswhatcompanies
aredoingunderObamasplan,sotheycantchargeextraforpeoplewhoaresicker.They
aresayingthemarketisnowcloseduntilNovembertogetcoveragein2015unlessyouve
changedjobs,oryouvegottenmarriedorhadachild,orhadsomeotherlife-changing
event.Sotheyhaverestrictedsignupstoaverynarrowrangeoftime.
WOODS:Now,IcanunderstandhowthegeneralpublicisaffectedbyObamacare.Icansee
whatitsgoingtodotoinsurancecompanies.Icanseealltheincentivesthatarecreated
there.Butwhatsitlikeontheothersideofthings?Whatsitlikebeingaphysicianand
havingtheprospectofObamacare,butthenalsoalltheothervariousinterventionsby
government?Howdoesthataffectthepracticeofmedicinebyaphysician?
ORIENT:Ifaphysicianparticipatesininsurancepanelsmostofthemdo,althoughmore
andmoreofthemarewisingupitmeansthattheirabilitytodotheirjobisincreasingly
constrained.Theyareconstantlyfillingoutforms,lookingatchangesinalittlebitof

27
regulation,tryingtocomplywithjustreallyintrusiveandmeaningless,andonerous,and
costlydocumentationrequirements.Theydonthavetimetolistentotheirpatients.They
canbepunishedforofferingwhatthebureaucratsconsidertobetoomuchtreatmentorthe
wrongtreatmentfortheirpatients.Somanyofthemarequittingtheirindependentpractice.
Theycantaffordtokeepthemopen.Andtheyaregoingwithabiginstitutionandjust
followingordersjustsotheycangettheirpaycheckuntilthetimecomeswhentheycan
retire.Soweregoingtohavepatients,maybesomeofthemwillrealizewhatshappening
andsomeofthemwont.Buttheyaregoingtobegettingcarethatmightaswellberendered
byarobot.Butitsworsethanthat.Itsrenderedbysomeonewhohasaconflictofinterest
andwhomaybesacrificinghisownfinancialstability,ormaybehisowncareer,ifhedoes
whathebelievesisrightforapatient.
WOODS:Whatwouldbeanexampleofaphysicianwhowouldbeconflictedbetween
doingwhatsrightforapatientandabidingbygovernmentregulations?
ORIENT:Well,hewillbeconsideredanoutlierifthecodeshesubmits,thenumberof
treatmentsthathedoes,aremorethanaverage,andthatmeansthateitherhewillbe
penalizedbyhavingaso-calledbonuswithheld,orhemightjustbestrickenoffthepanel,
saying,youknow,yourejustnotateamplayer.Yourecostingustoomuchmoney.Were
notgettinganysavings,whichcanonlycomeaboutbyrestrictingcare,soyoureoutofhere.
Oncethathappens,hecouldfindhisabilitytoworkforanybodyelsediminishedor
canceled.Physiciansareverywellawareofthis,anditgetsincorporatedintotheirown
thinkingthatiftheydosomethingthatwillbeconsideredalittletoomuchoralittleabove
average,theycouldsuffer.
WOODS:Ihadbeenundertheimpressionthatbecauseofthird-partypayments,because
almosteverybodyhasmedicalinsurance,andthecostofproceduresgetssubmittedtothese
third-partypayersthattheproblemwasnotoneofphysicianswhowereorderingtoo
manytestsorofferingtoomanytreatmentsgettingintotroublefordoingso.Ithoughtthe
problemwasthattheyorderedtoomanyofthesethingsinthefirstplacebecausetheyknew
thattheressomethird-partypayerthatllpickupthetab.
ORIENT:Oh,youreexactlyright.Thisisacorruptinginfluenceofnobodybeing
responsibleforhisownbill.Butthecontrolmechanismsthatareinstitutedtotrytocope
withthatproblem,managedcare,putsalltheincentivestheotherway.
WOODS:Isee.Nowwhatabouttheresponsethoughthatforallthebureaucratic
inconveniencethatthiscauses,andforallthetransformationofphysiciansintorobots,this
isstillasmallpricetopayforgettingmedicalcareforallourpoorandelderly?
ORIENT:Well,inthefirstplace,itsnotmedicalcare,andthesecondplace,itsnotgoingto
allourpoorandelderly.Itsrestrictingthetotalamountofcarethatcanbedelivered.Itmay
bedrivingoutofbusinesstheindependentdoctorswhocarethemost,themostskillful,the
mostaccomplished.Itmaybeshuttingdowntheinstitutionsthatreallycareaboutpatients
andjustleadingtogeneralizedshortages,whichmeansthatthereslessandlesscare
availableandofpoorerandpoorerquality.Sohowcanyousaythatthatsanadvantage?

28
WOODS:Well,tellmeaboutthis.Ireadanecdotalpiecesaboutphysicianswhohavemore
orlessdroppedoutofthemainstreamsystemofacceptingthird-partypayment,andthey
willjustputasigninthewindowandsay,thisisacash-onlypracticeandits$35avisitfor
astandardvisit,andtheyvegotsomekindofpriceschedulethatseasytoaccess.Whatare
thebenefitsofdoingthat?Andistheregoingtobeanaccelerationofthis?
ORIENT:Ihopeso.Thesearereal-lifestoriesofreal-lifephysicians,whoinsteadofjust
cavinginandgoingtoworkforabiginstitutionorofhanginguptheshinglealtogether,
decidetogobacktotheold-fashionedwayofworkingfortheirpatients.Theadvantagesare
thattheycansavesomuchintheiroverheadthattheycankeeptheirpricesverylow.They
canspendalltheirtimedoingthingsthatbenefitapatientanddontspendtheirtimedoing
mindless,stupid,repetitious,absurd,counterproductivebusyworktosatisfythebean
counters.Theylovetheirprofessionagain.Thepatientsloveitbecausethedoctorsare
lookingatthemandtalkingtothemandspendingmoretimewiththem,andthepricesare
quitereasonable,andtheycanfigureoutwhatsgoingon.Thepricesareknownaheadof
time,anditsjustareallyterrificdeal.
WOODS:WhataboutMedicareandMedicaid?Therearealotofpeoplewhosaythey
favorafree-marketapproachtomedicine,soweneedtorepealObamacare,butMedicare
andMedicaidaretheelephantsinthelivingroomthatarenot,ofcourse,freemarket.
Theyaregovernmentprograms.Butyouvery,veryrarely,ifever,hearaprominent
free-marketpersonsayingthatthismeanswellhavetoscraporsubstantiallymodify
thoseprograms.Wheredoyoustandonthoseprograms?Andhowdoyoudefend
yourselfagainstpeoplewhosaythat,ofcourse,MedicareandMedicaidhavekept
countlesspeoplealivewhowouldhavehadnoaccesstoanythingotherwise?
ORIENT:Well,wewereagainstMedicareandMedicaidtobeginwith.Theyare
unconstitutional.ThechairmanoftheHouseWaysandMeansCommitteeatthetime,a
DemocratfromArkansaswhohadbeenchairmanfordecades,saidhewasnevergoingto
letitcometoavotebecauseitwouldbankruptthecountry.ButthenwhenJohnsoncame
intopowerwithhislandslidevote,hesaid,Okay,Icancount.Medicareisgoingto
crashandburnitsjustinevitable.Itwasunconstitutional.Weareagainstit.Weneedto
phaseoutofitsothefewestnumberofpeoplegethurt,butasamatteroffact,if
Obamacareisunconstitutional,soisMedicare.
WOODS:Well,thenwhatarepeoplesupposedtodowhentheyareelderly,andthey
donthavealotofmoney?Now,itturnsoutthatthewealthiestcohortintheUnited
Stateshappenstobetheover-65s,butevenifweleavethataside,thinkaboutanindigent
65-year-oldman,letssay.Hehasgotnohopeofgettingmedicalcare.Hedoesntcare
aboutyourconstitutionalobjection.
ORIENT:Well,backbefore1965peoplewerenotdyinginthestreets.Halfoftheelderly
hadgoodprivateinsuranceplans,andtheywerereallyangrywhenPresidentJohnson
gotthemcanceledforthem.Theothershadaccesstocarethroughcharitableinstitutions,
throughtheirstateorcounty,orjustthroughcharitybydoctorsandhospitals.Assoonas
Medicarewentintoeffect,thepriceofmedicalservicesdoubledortripledovernight,soit

29
wasmuchmoredifficultforpeopletoaffordthem,andasIsay,alloftheprivate
insuranceplansweregone.Soimmediatelythishadabadeffectonmedicalcarefor
everybody.Tosaythatwehavetomagicallydoawaywithpovertyandillnessandthe
needtobecharitabletoourfellowman,orelseweregoingtostuckwithamiserable
socialistsystem,isjustacceptingaterrible,terriblyflawedassumption.
WOODS:Whatwouldyousaytopeoplewhorespondbypointingtothevarious
government-runhealthprogramsaroundtheworldandwhowillsay,yeah,yeah,youget
somehorrorstoriesaboutrationingandwaitlists,butifyouaskthesepeople,ifyoupoll
them,theyareallbasicallyprettyhappywiththosesystems,soifanything,weshouldbe
moreradicalthanObamacareandtrytoadoptsomeofthesesuccessfulsystemsfrom
Europe.
ORIENT:EverytimeIgiveatalktheressomebodyintheaudiencethatsays,Oh,Iknow
someCanadians.IwasaCanadian.Itsawonderfulsystem.Andifyoupollthepeople,
yeah,alotofthemareinfavorofitbecausetheyrenotsick.Theyarenotlyinginahospital
bedorsick.Thevastmajorityofpeoplearentsick.Andtheycansaywell,Idonthaveto
worryaboutamedicalbillbecauseitwillbepaidfor,assumingyoucangetanymedical
care,butinCanadatheresevenalotteryforpeopletogetaprimaryphysician,andwithout
aprimaryphysicianyoucantseeaspecialistatall,andevenifyoudotherearelong
waitingperiods,andtherearepeoplewhodieonthewaitinglist.InBritaintherearepeople
whoarestarvedtodeathinthehospitalbecausethereisnobodytofeedthemortoeven
takereasonablydecentcareofthem,andthesethings,theyarejustnotwellcoveredinthe
press.IfyouevenquotetheBritishpress,peoplewillsay,oh,Idontknowaboutthat.That
mustjustbetheright-wingpropagandistscastingmudontheNationalHealthService.
Everybodyknowsitsabeautiful,wonderfulsystemthatweoughttohave.ButIthinkif
youhavebeensick,oryouhavebeeninoneofthosehospitals,oryouhavebeenthefamily
memberofsomebodywhosbeeninoneofthem,thenyouseeadifferentpicture,but
peoplewillsay,oh,yourejusttellingusanecdotes.
WOODS:WelearnednotlongagoaboutVAhospitalsintheU.S.Ithinktherewasone
inArizona,forinstance,inwhichtheirpubliclystatedpolicyisthatnoveteranwhogoes
inforcarewillhavetowaitmorethanXnumberofdaystogetit,somethinglike30days.
Butthentheyrealizedthattheycanmakethosepublicpoliciesalltheywant,buttheyare
comingupagainstthelimitationsofresources.Sotheyestablishedasecretwaitinglistso
theydidnthavetoadmittheywereviolatingtheirofficiallystatedpolicy.Thesesecret
lists,theyhadhundredsofpeoplewhowereonthemformonthsandmonthswhothen
diedbecausetheywerewaitingfortreatment.Soyoucanspeakallyouwanttoabout
yourwonderfulpolicyofseeingeverybodypromptly,butyouknowwhattheysayabout
actionsspeakinglouderthanwords.
ORIENT:Well,thegovernmentroutinelylies.Imeanhowmanytimesdotheyhaveto
lietousbeforewefinallygettheideathatthatisjusttheirmodusoperandi?Iworkedat
theVAafterIfinishedresidencyforaboutfiveyears,andourjobwastobethe
gatekeeperandtokickveteransoutaftertheyhadwaitedalldayiftheywerenotseeking
careforaservice-connecteddisability.Weviolateditallthetime,butitwasagainstthe

30
rules.Thatwasourroleasgatekeeper.Thesepeopledidnotgetthetreatmentthatthey
deserved.
WOODS:Dr.Orient,IdliketoknowthestoryofthefoundationoftheAssociationof
AmericanPhysiciansandSurgeonsbecauseIthink,ifmemoryserves,ithassomethingto
dowiththefactthattheAmericanMedicalAssociationandthephysiciansthatformed
thisneworganizationdidntseeeyetoeyeonimportantmattersofphilosophyand
ideology.
ORIENT:Yes,in1943theWagner-Murray-DingellbillwaspendingbeforeCongress.
(ThatwasDingelltheelder,thefatherofDingelltheyounger,whowasthepowerbehind
Obamacare.)TheAMAwasnotfightingit,soanumberofAMAmemberssetupthis
parallelorganizationmaybetobetheconscienceoftheAMAandtodothepoliticalwork
opposingsocializedmedicinethattheAMAwasdecliningtodothatpoint.TheAMAdid
comearoundanddidsomethingtofightMedicarein1965,butafterMedicarepassed,the
AMAjustcontinuallymovedleftward,soitendorsedObamacareeventhoughitlostabig
chunkofitsmemberswhenitdecidedtodoso.
WOODS:Letmeaskyouaveryfrankquestionaswewrapup.Ofcourse,youareina
beautifulprofession,andwealladmirewhatitisyoudo,butsurveyingthesituationright
nowandtakingintoaccountwhatayoungphysicianislikelytoexperienceoverthe
courseofhiscareer,doyouadviseyoungpeopletoentermedicineanywayandjustfight
theSOBsfromwithintheprofession?Ordoyouadvisethemtodosomethingelse
altogether?
ORIENT:Well,alotofcollegecareercounselorsaretellingtheyoungpeoplesmart
peopledontgointopre-med.Andmanyphysicianshavegonesofarastothreatento
disinherittheirchildreniftheyfollowintheirfootsteps.
WOODS:Wow!
ORIENT:Manychildrenaredecidingtheydontwanttofollowindaddysfootstepsbecause
hislifeissohard,andhessofrustrated,anditsbecomingharderandharderforhimtodo
hisjob.Itellmedicalstudents,frankly,ifitsyourvocation,ifitsyourcalling,ifyoucantnot
doit,andyouaredoingitforlove,dontletanybodystopyou,butifyouregoingintoit
hopingthatyoullberespectedandmakeagoodlivingandcanalwayscountonthat,youve
gottothinktwiceaboutthat,becausedoctorsarethevillainsthesedays.Theyarethe
scapegoats.
WOODS:Arethereanyareasofmedicinewherethedoctorissomewhatfreertopracticethe
wayanormaldoctorwouldliketopractice,ortheyalluniformlythesame?
ORIENT:Therearesomethatareworse.Theonesthataretheveryworstarethingslike
kidneydiseaseandophthalmology,becauseallin-stagerenalfailureisonMedicare.A
highpercentageofeyepatientsareelderly,andsoalmostallofthedoctorslivelihood
comesfromthesegovernmentprograms.Whatdoctorsaredoingmoreandmoreisgoing
intomorealternative,nichepracticesofmedicinewheretheycanstillchargetheir
patientswhattheserviceisworthplasticsurgery,orjustplainalternative,moreholistic
medicine.AlotofpsychiatristsareoptedoutofMedicareandMedicaid.
31
WOODS:Sothismightbeinformationthatsomebodywhodoeswanttoentermedicine
mightwanttobearinmind.Now,Ihaveafairlydiverseaudiencelisteningin.IamsureI
haveacohortofphysicianslisteningin.WhyshouldtheyjointheAssociationof
AmericanPhysiciansandSurgeons?
ORIENT:AAPSistheonlymedicalorganizationthatsreallybasedonprinciple.Wedonot
haveanybusinessinterests.Wearenotonthetakeforsellingmaterialstocomplywith
governmentregulationsortopromotemanagedcareorpharmaceuticals.Sowedotruly
representtheviewsofourmembersastheywerebasedonprinciplesoftheold-fashioned,
pre-revolutionarymedicine,thesanctityofthepatient/physicianrelationship.Andwefight
forourmembers.Wefightagainstshampeerreview.Wefightagainstincreasinglyintrusive
bureaucraticattemptslikemaintenanceofcertification.Wefightagainstprosecutionof
physiciansforactingintheirownbestjudgment,whichishappeningmoreandmore.We
fightagainstthreatstoonesabilitytooptoutofMedicareortooptoutofinsurance.We
providetoolsforphysicianstomaintainatrulyindependentpractice.Soifyouareaprivate
physician,youbelieveinthepatient/physicianrelationship?AAPSisyourorganization.

Ifyouenjoyedthischapter,you'lllovetheTomWoodsShow,whereIreleasecontentlikethisevery
weekday.Checkoutthefulllistofepisodes,alongwithlinkstosubscribetotheshowforfree,at
tomwoods.com/episodes.

32


Chapter5

MarketMedicine
(withCharlesSauer)

CharlesSauerisexecutivedirectoroftheFreeMarketMedicalAssociation.Thiswasepisode
191oftheTomWoodsShow.
WOODS:Youhaveabrandnew,free-marketmedicalorganization.Howareyou
differentfromtheAssociationofAmericanPhysiciansandSurgeons?
SAUER:Iamaneconomist,soItendtolookatthingsthatway.Wearedefinitelynot
competitorswiththeAssociationofAmericanPhysiciansandSurgeons,andIworkwith
themthroughanotherbusiness.ButtheAAPSisfocusedoncreatingphysiciansthatwillopt
outofthesystemandbecomethird-party-free.AndthroughtheFreeMarketMedical
Associationwhatwerelookingtodoisbringinthephysiciansthatarethird-party-freeand
somethatarelookingtobecomethird-party-free,oratleasthosttheirpricesandlinkthem
upwithalsothebuyersandpurchasersandtheotherpeoplethatarelookingtoworkinthe
health-caremarket.SoweareworkingwithdoctorslikeKeithSmith,theco-founderofthe
SurgeryCenterofOklahoma.WerealsoworkingwithJayKempton,whoistheheadofthe
KemptonGroup.Theyareathird-partyadministrator.Sotheyworkwithabunchofbanks
andself-insuredbusinessesthroughoutOklahomaandTexas,andtheydotheinsurance
administration.SotheyworkwithalotoftheKeithSmithsandtheotherfree-market
physiciansintheareatogivetheirbusinessesabetterdeal.Sowearekindoftheumbrellafor
thehealth-carefreemarket.
WOODS:Thewebsiteismarketmedicine.org.Isthisanorganizationprimarilyfor
physicians,then?Orisitsomewherethatjustalaymanwhoisinterestedinfree-market
medicinemightgetinformation?
SAUER:Itsanall-of-the-aboveorganization.IminWashington,D.C.,andforthepast10
yearsIvebeenwalkingthehallsofCongresstryingtoconvincemembersandstaffthat
free-markethealthcareisthewaytogo.Ifyougivethepatientmoney,andtheygivethat
moneytothephysician,youendupgettingmoreaccesstocareandhigher-qualitycare.
Andalmostateveryturntheykeepsayingthatfreemarketsjustwontworkinhealthcare.I
knewthattobeuntrue.Iknewthereweredoctorswhowereouttheredoingit,and
statisticiansalwaystalkedaboutthem.Theywerecalledislandsofexcellence.
SoourgoalhereistogiveuponCongressforthetimebeingandbuildthefreemarket.So
thatistheJoeEverybodyonthestreet,theMainStreetguywhoissearchingforhealthcare
byhimself,orasSeanParnellcallshim,theself-paypatient.Thatsalsoworkingwiththe
self-insuredcompany,andthentheserviceproviderswithinthat,andthedoctors.Soits
kindofeverybody.Ourfocusrightnowisonself-insuredbusinessandhealthcare
providers.

33
WOODS:Nowwhenyousaythird-party-free,ofcourse,youretalkingaboutphysicians
whowanttogetoutfromundertheinsurancecompaniesandjustdealdirectlywiththe
patient.AmIunderstandingthatcorrectly?
SAUER:Correct.
WOODS:IsntthatgoingtobecomeadyingbreedintheageofObama,inwhichpeople
aregoingtobepenalizediftheyaspatientsarethird-party-free?
SAUER:Theresakindofaweirdopt-outthatIthinkiswhereweregoingtoseealotof
growthinthemarket,andwhereweregoingtoseearobustargumentanddefenseagainst
Obamacaregrow.Andthatstheself-insuredbusinesses.Foralotofpeopleitmakes
economicsensetogoaheadandpaythefineinObamacareandinsurethemselvesor
becomeaself-paypatient.Andthatactuallycomesfromthefactthatitwasbelieved
politicallyexpedienttojustnotraisethefinehighenoughtowhereitwouldmakeeconomic
sensetonotpaythefineandgetanObamacareplanthatdoesntprovideasmuchaccessto
cheapcareasjustinsuringyourselfwould.Butsincetheeconomicsofthatareactuallyon
themargins,theresnotalotofpeoplethatIseethataregoingtodriveafreemarketin
individualhealthcare.However,therearealotofself-insuredcompaniesoutthere,and
thoseself-insuredcompanieshavealotofemployees,andjustthemalone,wecandrivethe
numbersthatweneedtoprovethatfreemarketswork.Soforinstance,oneofmyfavorite
storiesrecentlyisOklahomaCounty,anactualgovernmententityinOklahomatheyarea
self-insuredcounty,andtheirthird-partyadministratortalkedtoDr.Smith,andsothenhe
madeanarrangement.Itwasabouttwomonthsago.Andinthefirstthreeweeksoftheir
contractDr.SmithhassavedOklahomaCounty$140,000.Sothekeyhereisbeingabletoget
numberslikethisanddrivenumbers.JakeJasonsavedhissmallbusinessesthatheworked
forIbelieve$1.2millioninthefirstquarterof2013.Asthesenumbersstartbuilding,the
federalgovernmenttolocalgovernmentsandindividualsandbusinessownerswontbe
abletostopthegrowthofthefreemarket.
WOODS:Icanunderstandwhylookingatsocietyingeneralwemightwanttoavoidthe
third-partysystembecauseitseemstoimposefewerburdensonsociety,fewer
misallocations,fewerdistortionsinourdecision-makingaboutthekindofhealthcarewe
need.Butwhyisit,fromthepointofviewoftheindividualphysician,thatitwouldbea
goodthingtogetoutfromunderthesystem?Incateringtopeople,orfirms,orwhatever,
whoarentdealinginthewholethird-partysystem,aren'tIartificiallylimitingmymarket?
SAUER:Ithastodowithhowdoyouwanttopracticemedicine.Doyouwanttopractice
medicineforthepatient,ordoyouwanttopracticemedicineforacompanyorathird
party?MyfavoritedoctoronthisisDr.JulietteMadrigalDersch.ShesoutsideofAustin,
Texas.Andshegivesdiscountstopatientsiftheycomeinwithspurs.Ifyougetcancer,she
treatsyouandyourfamilyforfree.Shellmakehousecalls.Andallofthisislegalbecause
shedoesn'tparticipate,orshedoesntbillCMS,whichiswhattheactuallawisonthat.She
callsitslavery.Ifshecouldntrunherbusinessthewayshewantedto,orchargetheprice
shewantedto,thenitwouldntwork.Andyouseethatgoingthroughthesystem.Third
partiesdictatehowthedoctorshavetoruntheirpractices,howmuchtheycanchargetheir

34
patientsandhowmuchtheycanchargetheirpatientsalsomeanshowlongtheycanstay
withthem.SoDr.Madrigalgetstospendmoretimewithherpatients.Shegetstoreally
learnwhattheirproblemsare,whattheirissuesare,andtakecareofthem.
Andthatmoneydoesotherthings,too.Whenyoudirectlypayyourdoctor,theyhavea
higherincentivenottohaveyouwait.Dr.Smithhasalmostnowaitingtime.Ifyoucallhim
today,youcangetintomorrowforasurgery.Thatsstartingtobecomeuntrueashe
becomesmorepopular,buthesspeakingthenofraisinghispricesorexpandingthe
practice.Bothchoicesbecomeapossibility.Soyeah,insomewaysinthecurrentmarket
whichiswhyeconomicallytheyarecalledislandsofexcellence,becausesomeofthe
decisionshavetobeoutsideoftheeconomics.Theyhavetobepersonalforadoctortoopt
outnow.Butthejoythatyouseeonceadoctorhasoptedoutthattheyactuallygettotake
careofthepatientsandrestorethepatient-physicianrelationshipisjustsomethingthat
almostnoamountofmoneycanbuy.Doctorsarenotrationingbyprices.Theyarerationing
bylines.Sonomatterwhat,everydoctorisjustrunningcirclesiftheyhaveathird-party
practicenowadays.Theyjustdontgetenoughmoney.Theyareforcedtoruncircleswhile
theyareatwork.
WOODS:Whatisyoursenseofwheretheaveragephysicianstandsonthis?Hastherebeen
anevolutioninthoughtamongalotofphysicians?Aremanyofthemtoobusyreallyto
thinkaboutfundamentalquestionslikethis?Isthereaslowbutsuremovementinyour
direction?Whatdoyouthinkthetrendis?
SAUER:Oh,itsaninterestingquestion.Ithinkthepeoplethataregoingthird-party-free
rightnowaretheentrepreneurs.Oneofthenewergroups,AtlasMDinWichita,Kansas,isa
conciergepractice,buttheyareinthemiddleofWichita,Kansas,sotheyarenotcateringto
therich.Theycharge$10amonth,Ibelieve,ifyoureunder18,andformostadultsits$50a
month.Thisisadifferenttypeofcare,butitswhattheydidwhentheycameout.Idont
knowifentrepreneursare1%ofthepopulationor3%ofthepopulation.Itsalowpercentof
thepopulationandthepeoplethatarewillingtotakeariskandgetoutthereontheedge,
andsothatsthegroupthatwereseeingdoingit.
Ithinkthatastheargumentbuilds,astheyseethatthroughObamacarepriceswillcontinue
toincreaseandaccesswillcontinuetobelimited,morephysicianswhobecomephysicians
becausetheywanttotakecareofpeoplewillfigureoutwaystotakecareoftheirpatients,
andthatwillbethroughthefreemarket.
WOODS:Canyoutellusveryquicklywhataconciergeserviceis?
SAUER:Withaconciergeserviceyoupayasetprice,andforthatsetpriceyougetaccessto
yourdoctor.Itsoftencalleddirectpay.WithAtlasMDyoupay$50amonth,andnowyou
haveaccesstooneoftheirdoctorsisDr.DougNunamaker.IfyourdoctorisDr.Doug
Nunamaker,youcancallhim,Skypehim,Twitterhim,Facebookhim,showuptohisoffice.
Youcanaskhimtoshowuptoyourhouseasmanytimesasyouwantinamonth.With
AtlasMD,theywillgiveyoudifferenttests,EKGs,andwhatever,intheirofficeforfree.I
thinktheydosomebloodtestsforfree,andthentheygiveseverediscountsonmedicine
thatcangodowntolike$2amonth,becausetheydbuytheirmedicineinbulk.Sowitha

35
conciergepracticeyoupayasetfee,andyougetalmostunlimitedaccesstoyourdoctors
services.Sotheresnothree-monthwait,likeinmyplan.
WOODS:Charles,whatdoyousaytopeoplewhosaythatbeforewegotObamacare,we
hadthekindofapproachthatyouandthepeopleatyourinstituteareproposing,thatwe
hadafreemarketalreadyandwesawthatitdidntwork?Ityieldedsuchhighpricesthat
anybodyinthecountry,practically,wouldberuinedbyoneadversehealthsituation.So
howcanyoufavorgoingbacktothat?
SAUER:Well,ifItalktoanybodywhosayswehadafreemarketbeforeObamacare,I
generallyjustmoveon,becausetheywerentpayingattentiontothehealth-caremarket.The
healthcaresystembeforeObamacarewasjustalittlebitlesssocialistoralittlebitless
government-controlledthanwhatObamacareis.Obamacareisabigshifttowards
government-controlledhealthcare,butitsjustanotherstepalongtheline.Sotherewasno
freemarketinhealthcare.Therewerepeople,therewereactorswhowereactinginafree
marketwaywithinthehealth-caresystem,butthegovernmentisheavilysubsidizingcare
andprovidingtaxincentivestonon-profithospitalsthatcreateotherincentivesinthe
market,andtheincentivesaretoraiseyourpricesandnegotiatedowntothelowestamount
forahospital.Foradoctor,thereisnoincentivetolisttheirprices.Foradoctorsoffice,
theresnoincentivetotreatthepatientasaclient.Thepatientwasntaclientbefore
Obamacare,andthepatientisnotaclientnow.Theinsurancecompanyistheclient,andthe
governmentistheclient.Sowhatwerelookingtodoisshiftthat.
Oneoftheproblemshereisthatthisisntapartisanissue.Thisisabipartisanissueon
CapitolHill.Bothpartieshaveagreedthatatleastsomelevelofgovernmentinterferencein
themarketisneeded,anduntilweswitchthatandatleastonepartysaysthegovernmentis
notneeded,weregoingtocontinueonthistracktowardsmoregovernmenthealthcare.So
ourgoalistobuildthemarketsothatCongresscaneventuallyprovidearobustargument.
Ofcourse,thatsthesecondarygoal.Ourfirstgoalhereisalwaysgoingtobetoprovide
moreaccessinhigherqualitycaretopatients,andweseethatacrosstheboard:where
doctorsstarttreatingthepatientastheclient,wegethigherqualitycareatlowerprices
almosteverytime.
WOODS:Nowwhenwesaythird-party-free,mostpeoplearethinkingintermsof
insurancecompanies.Youregettingoutfromunderthatwholesystem.Butanotherthird
partywouldbethegovernment.Soforexample,whenyouhaveMedicare,Medicaid,the
thirdpartyinthatcaseisthegovernmentitself.Now,youretalkingaboutbeingcommitted
toincreasingthequalityofcare,theavailabilityofcare,theaffordabilityofcare,andyetit
wouldseemcounterintuitivetomanypeoplethatyoucoulddothatbyignoringthelargest
welfarestateprogramsofthemall,namelyinmedicalcare.Howcanthisseemingparadox
beresolved?
SAUER:IfIamclimbingamountainandIcantreachthetopuntilItakethatlaststepon
thetop,butifIstartupthemountain,youcansay,well,hesprobablygoingtotrytoclimb
themountain.SoIthinkthatthoseprogramsareoffinthedistance.Itsgoingtotakethe
mostargumentstotakeoffMedicare,totakedownMedicaid.MywifeisactuallyonSocial
Securitydisability.ShehadaMedicareplan,anditgivesheralmostnoaccesstoanydoctor.

36
WehavestillaMedicareAdvantageplanforher,andthatdoesnthavemuchaccessto
anybody,andthatssupposedtobebetterthananormalMedicareplan.Soonceyougeta
robustfreemarketinunder65andabovewhateverpovertylevelthatObamacaresetatthis
point,thenwecantakeonthegovernmentplans.
Dr.Smith,whomIkeepcomingbacktohesactuallyaco-founderoftheFreeMarket
MedicalAssociationhasthefirstsurgerycentertopostitspricesonline.Hedoesalotof
charitywork,though.Oneofmyfavoriteofthosecharitiesiscochlearimplants.Ithinkthe
priceforacochlearimplantatahospitalis$20,000.Itmightactuallybe$100,000.Eitherway,
hedoesitforabout20%ofwhattheso-callednon-profithospitaldoesitfor.Thisisa
non-profithospitalthatissupposedtobegiventhistaxincentivefromthegovernmentto
providebetter,cheapercaretopeople,andyettheydont,andKeithdoes.
Hebuysthecochlearimplantanddoesthatatnocost,andthentheydothesurgeryata
severediscount,andtheyareavailabletodoIbelieveitsfivetooneathiscenter.Soonce
webuildafreemarket,IthinkMedicareandMedicaidwillfallquickly.Thisgovernment
top-downtheyforceEMRsonthedoctors.Now,electronicmedicalrecords,EMR,canbea
goodthing.Theycanhelpdoctorsout.Butifyoureforcedwithaone-size-fits-all,witha
certainchecklistthatdoesntfitapatient,ordoesn'tfityourpractice,andyetyouhaveto
checkboxeseverysinglepatient,weseealotoferrors.Sowhereweseeadoctor,andtheir
firstpriorityistheclient,whichifyoureabusinessowner,youunderstandthat.Theclients
yourgoal.TheydontjustgooutandbuyarandomEMR.Theybuyanelectronicmedical
recordthatwillhelpthemtreattheirpatientsbetterandmoreeffectively.Wehavetogetout
fromunderthegovernmentscontroltohaveanyofthosemarketactionstakeplace.

Ifyouenjoyedthischapter,you'lllovetheTomWoodsShow,whereIreleasecontentlikethisevery
weekday.Checkoutthefulllistofepisodes,alongwithlinkstosubscribetotheshowforfree,at
tomwoods.com/episodes.

37


Chapter6

TheSelf-PayPatient
(withSeanParnell)

SeanParnellistheauthorofTheSelf-PayPatient:AffordableHealthCareChoicesinthe
AgeofObamacare.Thiswasepisode193oftheTomWoodsShow.

WOODS:Giveustheone-minuteoverviewofwhattheself-paypatientis.
PARNELL:Aself-paypatientissimplyanyonewhoispayingdirectlyforsomeorallofhis
healthcare.Mybook,TheSelf-PayPatient:AffordableHealthcareChoicesintheAgeof
Obamacare,aswellasmyblog,theselfpaypatient.com,arebothintendedtoberesourcesfor
theseself-paypatients,explaininghowtheycanfindaffordablehealthcareoptionsbygoing
toprovidersandfacilitiesthatcatertoself-paypatients.Alotoffacilitiesandprovidersin
healthcarearesoentangledinthehealthinsurancesystemthatitsdifficultforthemto
actuallyjustgiveaprice,certainlyafairprice,toaself-paypatient.Buttherearepeopleand
organizationsouttherethatcatertoself-paypatients,andmybookdiscussesallofthe
placeswherepeoplecangotogetthisinformationandtogetthehealthcaretheyneed.
WOODS:ButwhywouldIwanttobeaself-paypatientifIcangothroughtheinsurance
system?Nomatterhowconvolutedandbureaucraticitis,Icanstillgetdiscountedcare.
WhatinterestwouldIhaveindivorcingmyselffromthat,oristhisastrategysimplyfor
peoplewhodonthaveinsurance?
PARNELL:Itsastrategyforanybodywhowantstobeincontroloftheirhealthcare.Youre
right:peoplecan,iftheywantto,beapartofthebureaucratichealth-caresystem,butIdont
thinkthattheyaregoingtoactuallygetmuchinthewayofadiscount.Infact,beinga
self-paypatientisusuallygoingtobealotlessexpensivethangoingthroughtheinsurance
systemonceyoustarttofactorinyourpremiums,yourco-pays,yourdeductibles,andallof
thosesortsofthings.
OneofthethingsIdiscoveredovertheyearsthisisoneofthethingsthatspurredmeto
writethebookwasthatonceyoustepoutofthebureaucratichealth-caresystemof
third-partypayment,costsactuallydrop.Becauseforeverydoctorapracticehasinthe
office,theyhaveonepersonwhosejobitissimplytosubmitthebillingrequeststothe
insurancecompanies,tohagglewiththeinsurancecompanies,toarguewiththeinsurance
companies.Itcostsalotofmoneytosendpaperworkbackandforthfromadoctorsoffice
totheinsurancecompanyforwhatultimatelyisa$60ora$70oran$80medicalbill,and
thatjustaddscoststoit.Soifyoucanstepoutsideofthatsystemandjustpaydirectly,
eliminatetheoverhead,thenitsactuallymuchlessexpensiveinmostcasestobeaself-pay
patient.

38
Plusyougettohavecontroloveryourhealthcare.Youdonthavetoworryaboutan
insurancebureaucratorevenagovernmentbureaucratsaying,no,thisisnotanapproved
treatment,orwedontcoverthis.Youstepoutsideofthatentirely,andtherelationshipsthat
self-paypatientshavearedirectlywiththeirdoctors.Thereisnothird-partyinterferingwith
that.
WOODS:IhadaguynamedDaleBellisontheshowtalkingaboutLibertyHealthShareas
anexampleofawaythatyoucouldbemoreorlessaself-paypatient.Heisnotreally
offeringtraditionalinsurance.Hesjustofferingasysteminwhichpeoplesharemedical
expensestogether.TheresanexemptionforthatinObamacare.Butapartfromanapproach
likethat,asObamacarecomesintoeffectandpeoplearepenalizedfornothavinginsurance,
doesnttheroleoftheself-paypatientinmedicalcarediminishorevendisappear?
PARNELL:Idontthinkso.Tobeaself-paypatientmeansyouarepayingforsomeorallof
yourmedicalbills,andmostofthepoliciesthatarebeingsoldthroughObamacareandalso
thedirectionthatmostemployer-providedinsuranceisgoinghaveveryhighdeductibles,
$2,000,$3,000,$6,000.Andwhatthatmeansisthateventhoughyouhaveinsurance,
conventionalhealthinsuranceforthecatastrophicevent(e.g.,canceroraseriouscar
accident)youarestillaself-paypatientwhenitcomestogoingtotheemergencyroomwith
a$500billbecauseyousprainedyourankle,orgoingtothedoctorbecauseyouhaveacold
orjusttheeveryday,run-of-the-mill,relativelylow-costhealth-careeventsthatpeoplehave.
Somybookisdesignednotjustforpeoplewhoareuninsuredbutalsoforpeoplewhohave
high-deductibleplanswhoaregoingtobetoldbytheirinsurancecompanies,hey,youwant
tohaveanMRIonyourkneebecauseitskindofsore,well,thatsonyou.Thatsunderthe
deductible.Ifpatientsinthattypeofsituationsimplyweretogoto,say,thelocalhospital
forthatMRI,theyareprobablygoingtowinduppayinganywherefromthreetofivetimes
andthisisforsomebodywhoisinsuredforthatMRIwhattheymighthavetopayifthey
simplywenttoastand-aloneMRIclinicoroneoftheotherfacilitiesthatItalkaboutinmy
book.
WOODS:IamsureyouwouldbefamiliarwiththeSurgeryCenterofOklahoma.
PARNELL:IamveryfamiliarwiththeSurgeryCenterofOklahoma.Iprobablymention
thematleastonceortwiceamonthonmyblog.
WOODS:Explainthesignificanceofwhattheyaredoing.Doyouthinktheresgoingtobe
moreorlessofthisinthefuture?

PARNELL:WhattheSurgeryCenterofOklahomadoesisverysimple.Theyofferwhatis
essentiallywhatIcallall-inclusivepricing,meaningthatifyouneedaherniarepair
operation,yougototheirwebsite,andtherearefourorfivedifferenttypesofherniarepair
operations,andyouseeasingle,all-inclusiveprice.Thatmeansitincludesthesurgeon,
facilityfee,theanesthesiologist,everything.

Thisisincontrasttoyourlocalhospital,orreallyanyotherhospitalinthecountry,wherea
herniarepairoperationmightliterallygeneratehundredsoflinesofcodesthatarepretty

39
muchindecipherableandprobablyfilledwithalotoferrors,anditsprobablyinflatedwell
beyondwhatyouwouldpayforattheSurgeryCenterofOklahoma.Sowhattheyvedone
atSurgeryCenterofOklahomaisjustofferaflatprice.Youcomein,yougetthetreatment,
youpayforit,andyouredone.Theresnohavingtofigureoutfivemonthsdowntheroad,
didthenursereallycomeinanddeliverthismedicinethreetimesthatdayorfourtimesthat
day,becauseIamgettingchargedforfourtimesthatday.Youdonthavetoworryabout
anyofthat.Furthermore,becausethesearefairlysimplecashpricesthattheyareoffering
forpeoplewhoareself-paywhodonthaveinsurance,whodonthaveaccesstothe
pre-negotiatedratesthatalotofinsurancecompaniesdo,unfortunatelywhathappensat
mosthospitalsistheychargewildlyinflatedpricestotheuninsured.
Soaherniarepairsurgerythatmightcost$3,5000atSurgeryCenterofOklahomaifyougo
toamajorhospitalinBrooklyn,orLosAngeles,orTopeka,Kansas,theyareprobablygoing
tochargeyou$15,000,maybe$20,000forthatbecauseoftheirfranklybizarrepricing
strategies.SowhatSurgeryCenterofOklahomahasdoneistosay,okay,werejustgoingto
chargepeopleafairprice,asimpleprice.Andtheyaredoingverywellbyit.
Idothinkthatitisgoingtogrow.Again,whenyougetbacktotheissueofObamacareand
thehighdeductiblesandIamafanofhighdeductibles,buttheycanbekindofstartlingto
peopleatfirstIthinkthatasmoreandmorepeoplewindupinthesehigh-deductible
plans,theyaregoingtobelookingforplacestheycangolikeSurgeryCenterofOklahoma
wheretheycansimplygetafairprice,andknowthattheyarenotgoingtobehagglingover
13outof28lineitemsontheirbillfivemonthsafterthesurgerywasdone.
WOODS:YouhaveasectionherecalledOptionsforEmployers.Whatoptionsdo
employersinfacthave?Certainlytheiroptionshavebeendiminished.
PARNELL:Illprefacethisbysayingthatanybodywhoisanemployerandwhoislooking
forwaystosortofopt-outoratleastlimittheroleofbureaucraticmedicineandthe
health-carebenefitstheyprovidetheiremployeesreallyneedstotalkwithaprofessional
benefitsadministratororahealthinsurancebroker.Thatsaid,IthinkIcanofferafew
thoughtsonwhatIhaveseenbeingdonethatpeoplecanfollowupwith.Oneofthe
misunderstoodaspectsoftheAffordableCareActisthatemployersarerequiredbylawto
offeraveryrichbenefitspackage.Andwhilegenerallythereissomebenefittodoingthat,
therearesomewaystogetarounditthatbasicallyallowemployerstostilldesignbenefit
plansthatmeettheneedsoftheiremployeesbutthatdontconformwiththeveryhigh(and
expensive)standardsthatObamacarewouldliketoimpose.
Basically,itsamatteroffindingabenefitpackagethatworksandthenacceptingthat
maybeafewofyouremployeeswillthenwindupgoingtotheAffordableCareAct
exchangesandgettingthecoverage,andthatthatmightresultinasmallpenalty.Butthats
probablygoingtobemuchlessthan(1)thedecisionforalargeemployernottoofferhealth
insuranceatall,or(2)thedecisiontoofferaplanthatdoescomplywithallofthe
AffordableCareActsrequirements.Soitskindofconvoluted,andasIsaid,youdoneed
totalktoabenefitsprofessional.IusuallyrecommendthatpeopletalkwithRalphWeberof
RouteThreeBenefitsinTennessee.Hespioneeredalotoftheworkthatpeoplearedoingto

40
findcreativewaystogetoutoftheAffordableCareActssupposedrequirementson
employers.
WOODS:Sowecansee,then,reasonsthatpatientsthemselvesaswellasemployersmight
favorthekindofalternativestrategiesthatyouareadvocating,buthowaboutthe
physiciansthemselves?Whatarethebenefitstophysiciansofdealingwithself-paypatients,
andsecondly,ifsuchbenefitsdoexist,whyaresuchphysicianssofewandfarbetween?
PARNELL:Themainbenefits,andIguessitsfromtalkingtoanumberofphysicians,but
themainbenefitstothemindealingwithself-paypatientsreallyaretwofold.Oneisthat
theygetpaymentimmediately,andtheydonthavetheoverheadexpenseassociatedwith
havingtogothroughaninsurancecompany.Therearenorequirementsthattheydocument
theirpatientsincertainways.Theydonthavetobecomeexpertsinthebillingcodesthat
eachcompanyrequires.Theyareabletosimplyacceptpaymentfortheservicesthatthey
provide,andthatsit.
Theotherbenefittodoctors,andthisiswhatIhearprobablymoreeventhanthefinancial
benefit,istheygettopracticemedicine.Itsjustthemandtheirpatient.Theydonthavean
insurancecompanysaying,no,wedontcoverthat.Oryouneedtogetpre-authorization
beforewellallowyoutodothis.Itsrestoredthedoctor-patientrelationshipandeliminated
thethird-partyinterferencethatdoctorshavebeencomplainingaboutforalongtime.
IusedtoworkforthecongressmanwhowastheauthorofthePatientsBillofRightsbackin
thelate'90sandearly2000s,andwhilethatbillhaditsissues,oneofthethingsthatwas
very,veryclearisthatdoctorswereextremelyunhappywiththedegreetowhichinsurance
companieswereinterferinginthatdoctor-patientrelationship.Thatssortofanecessary
thingifyouregoingtohaveathird-partypayersystem,andit'swhyItellpeople:ifyou
dontwantthird-partyinterferenceinyourhealthcare,thenmoveawayfromathird-party
payersystem.
WOODS:Anypartingwordsofadvice?
PARNELL:Mybiggestadviceisthatifyouwanttosavemoneyonhealthcare,andifyou
dontwanttobepartofthebureaucratichealthcaresystem,Ithinkpeopleshouldreally
considerbecomingaself-paypatient.Itsnotforeverybody,butIthinkmostpeoplewould
benefitfromthissortofsystem.Iwouldreally,stronglyencouragepeopletoconsidertheir
optionsand,mostofall,justunderstandthattheydohaveoptions.Thatsoneofthebiggest
mythsoutthere,whichisanotheroneofthethingsthatspurredmetowritethisbook.
PeoplethinkthatsincetheAffordableCareActpassed,theyrestuckwithit.Theyhavetobe
partofthatsystem.Theydont.Theycanoptout,andtheycanoptoutinsuchaway,asmy
bookdescribesandtheblogexpandson,thattheystillhaveprotectionagainstmajormedical
expenses,whicheverybodyshouldbeconcernedabout,andalsostillbeabletofind
affordablehealthcarefortherun-of-the-millstuffthattheyhavetopayforoutofpocket.

41
Ifyouenjoyedthischapter,you'lllovetheTomWoodsShow,whereIreleasecontentlikethisevery
weekday.Checkoutthefulllistofepisodes,alongwithlinkstosubscribetotheshowforfree,at
tomwoods.com/episodes.

42
 Notes

1.SallyC.Pipes,TheTruthAboutObamacare(Washington,D.C.:Regnery,2010),16-17.
2.Ibid.,17-18.
3.GeorgeReisman,TheRealRighttoMedicalCareVersusSocializedMedicine,Mises
Daily,August6,2009,availableathttp://mises.org/daily/3613
4.ThomasE.Woods,Jr.,33QuestionsAboutAmericanHistoryYoureNotSupposedtoAsk(New
York:CrownForum,2007),ch.30.
5.VijayBoyapati,WhatsReallyWrongwiththeHealthcareIndustry,MisesDaily,May26,
2010,availableathttp://mises.org/daily/4434.
6.Ibid.
7.Ibid.
8.SteveForbesandElizabethAmes,HowCapitalismWillSaveUs:WhyFreePeopleandFree
MarketsAretheBestAnswerinTodaysEconomy(NewYork:CrownBusiness,2009),243.
9.Pipes,TheTruthAboutObamacare,103,102.
10.Ibid.,160,162-63.
11.Ibid.,92-97.
12.HansBader,ObamacareResultsin47PercentPremiumHike,OpenMarket.org,October
17,2010,availableat
http://www.openmarket.org/2010/10/17/obamacare-results-in-47-percent-premium-hike/;
Pipes,TheTruthAboutObamacare,186-87.
13.Pipes,TheTruthAboutObamacare,183-84.
14.GeneEpstein,ObamacareandSmallFirms,Barrons,March29,2010,availableat
http://online.barrons.com/article/SB126964431272068337.html
15.Pipes,TheTruthAboutObamacare,ch.20;DouglasHoltz-Eakin,TheRealArithmeticof
HealthCareReform,NewYorkTimes,March21,2010.
16.ForbesandAmes,HowCapitalismWillSaveUs,251.
17.PeterG.Peterson,RunningonEmpty(NewYork:Farrar,Straus,andGiroux,2004),126.As
anaside,wemightnotethequestionthatiscompletelyoverlookedinthehealth-caredebate:
mightAmericanseniorsandindeedAmericansingeneralbeovermedicated?Thisisthe
elephantinthelivingroom.Isitnormalandgoodfor40percentofseniorstobeconsuming
atleastfiveprescriptiondrugseveryweek,with12percenttakingatleastten?Astudyinthe
JournaloftheAmericanMedicalAssociationin2003estimated200,000caseseveryyearofseniors
whosufferlife-threateningorevenfatalproblemsrelatedtoprescriptiondrugs.Ibid.,126-27.
18.Peterson,RunningonEmpty,128.
19.DavidT.Beito,FromMutualAidtotheWelfareState:FraternalSocietiesandSocialServices,
1890-1967(ChapelHill:UniversityofNorthCarolinaPress,2000).
20.AllenJ.Matusow,TheUnravelingofAmerica:AHistoryofLiberalisminthe1960s(Athens,
GA:UniversityofGeorgiaPress,2009[1984]),230,231-32.
21.ThissectionreliesonJacobHornberger,Free-MarketHealthCareandthePoor,May31,
2010,availableathttp://www.campaignforliberty.com/article.php?view=899
22.Reisman,RealRighttoMedicalCare.
23.Ibid.
24.Ibid.
25.HowardWolinskyandTomBrune,TheSerpentontheStaff:TheUnhealthyPoliticsofthe
AmericanMedicalAssociation(NewYork:TarcherPutnam,1994),142.

43
 AboutTomWoods

TomWoodsisaseniorfellowoftheMisesInstituteandhostofTheTomWoodsShow,which
releasesanewepisodeeveryweekday.HeholdsabachelorsdegreeinhistoryfromHarvard
andhismasters,M.Phil.,andPh.D.fromColumbiaUniversity.Woodshasappearedon
CNBC,MSNBC,FOXNewsChannel,FOXBusinessNetwork,C-SPAN,andBloomberg
Television,amongotheroutlets,andhasbeenaguestonhundredsofradioprograms,
includingNationalPublicRadio,theDennisMillerShow,theMichaelReaganShow,the
DennisPragerShow,andtheMichaelMedvedShow.

Woodsistheauthoroftwelvebooks,mostrecentlyRealDissent:ALibertarianSetsFiretothe
IndexCardofAllowableOpinion,Rollback:RepealingBigGovernmentBeforetheComingFiscal
CollapseandNullification:HowtoResistFederalTyrannyinthe21stCentury.Hisotherbooks
includetheNewYorkTimesbestsellersMeltdown:AFree-MarketLookatWhytheStockMarket
Collapsed,theEconomyTanked,andGovernmentBailoutsWillMakeThingsWorse(witha
forewordbyRonPaul)andThePoliticallyIncorrectGuidetoAmericanHistory,aswellasWho
KilledtheConstitution?TheFateofAmericanLibertyFromWorldWarItoBarackObama(with
KevinR.C.Gutzman),33QuestionsAboutAmericanHistoryYoureNotSupposedtoAsk,Howthe
CatholicChurchBuiltWesternCivilization,SacredThenandSacredNow:TheReturnoftheOld
LatinMass,andTheChurchandtheMarket:ACatholicDefenseoftheFreeEconomy.Hiscritically
acclaimed2004bookTheChurchConfrontsModernitywasrecentlyreleasedinpaperbackby
ColumbiaUniversityPress.WoodsbookshavebeentranslatedintoItalian,Spanish,Polish,
Lithuanian,German,Czech,Portuguese,Croatian,Slovak,Russian,Korean,Japanese,and
Chinese.

Woodseditedandwrotetheintroductiontofiveadditionalbooks:BackontheRoadtoSerfdom:
TheResurgenceofStatism,WeWhoDaredtoSayNotoWar:AmericanAntiwarWritingfrom1812
toNow(withMurrayPolner),MurrayN.RothbardsTheBetrayaloftheAmericanRight,The
PoliticalWritingsofRufusChoate,andOrestesBrownsons1875classicTheAmericanRepublic.
HecontributedtheprefacetoChoosingtheRightCollegeandtheforewordbothtoLudwigvon
MisesLiberalismandtoAbelUpshursABriefEnquiryintotheTrueNatureandCharacterofOur
FederalGovernment.HeisalsotheauthorofBeyondDistributism,partoftheActonInstitutes
ChristianSocialThoughtSeries.

Woodswritinghasappearedindozensofpopularandscholarlyperiodicals,includingthe
AmericanHistoricalReview,theChristianScienceMonitor,InvestorsBusinessDaily,Catholic
HistoricalReview,ModernAge,AmericanStudies,IntercollegiateReview,CatholicSocialScience
Review,EconomicAffairs(U.K.),QuarterlyJournalofAustrianEconomics,InsidetheVatican,
HumanEvents,UniversityBookman,JournalofMarkets&Morality,NewOxfordReview,Catholic
WorldReport,IndependentReview,Religion&Liberty,JournalofLibertarianStudies,Journaldes
EconomistesetdesEtudesHumaines,AD2000(Australia),ChristianOrder(U.K.),andHuman
RightsReview.

Woodswonthe$50,000firstprizeintheprestigiousTempletonEnterpriseAwardsfor2006,
givenbytheIntercollegiateStudiesInstituteandtheTempletonFoundation,forhisbookThe
ChurchandtheMarket.Hewastherecipientofthe2004O.P.AlfordIIIPrizeforLibertarian
ScholarshipandofanOliveW.GarveyFellowshipfromtheIndependentInstitutein2003.He
44
hasalsobeenawardedtwoHumaneStudiesFellowshipsandaClaudeR.LambeFellowship
fromtheInstituteforHumaneStudiesatGeorgeMasonUniversityandaRichardM.Weaver
FellowshipfromtheIntercollegiateStudiesInstitute.

Acontributortosixencyclopedias,Woodsisco-editorofExploringAmericanHistory:From
ColonialTimesto1877,aneleven-volumeencyclopedia.HeisalsoacontributingeditorofThe
AmericanConservativemagazine.

HisprimarywebsiteisTomWoods.com.Healsooperatesasitededicatedtoonline
entrepreneurship:HappyEarner.com.

45