I try not to be stupid.
And I know there are certain things one must avoid doing in order
to remain in the "unstupid" camp.
In the words of singer-songwriter Jim Croce, "You don't spit in
the wind, you don't tug on Superman's cape and you don't mess around
But recently, a great hue and cry has gone forth over the
emergence of some restrictive city regulations that limit the growth
of free-standing surgery centers or new hospitals in local markets.
As a health care executive -- as someone who must cope with the
onerous burden of federal bureaucracy and regulations each and every
day -- I don't often find myself agreeing with a batch of new laws
or new government rules.
In this case, however, I'm in favor of the idea.
Duncan was one of the first cities to suggest that any new health
services in their city would have to justify their need. Norman and
Edmond have followed suit. Some have suggested that any restrictions
on the free market have anti-competitive overtones. Others have
argued that city ordinances that limit hospital growth are
bureaucratic and would drive health care prices up.
That might seem like a logical argument, given that our free
enterprise system depends on free market competition -- not just the
competition of goods and services, but also the competition of
ideas. In most areas of our free market, more competition drives
down prices and improves quality.
That's true in almost every sector of our economy -- except
Let's examine the distinctiveness of our health care system that
exempts it from the normal economic forces shaped by competition.
First, customers in health care generally don't pay for the service,
nor do they select the service. A total separation exists between
those who receive a health care service, those who pay for it and
those who order it.
So most of the laws of supply and demand don't apply. There is no
evidence that competition in health care brings down prices. In
fact, the evidence suggests just the opposite. Once a community's
basic access needs are satisfied, competition beyond that point
actually increases prices.
Two reasons. First, the labor pool for health care happens to be
talented, well educated and thin. Excess facilities rapidly
accelerate labor costs (while these increases are clearly justified
given the important work that clinicians and other health care
workers perform, excess competition nevertheless drives up health
care costs). Second, health care providers can create their own
demand by how they care for patients and what they order.
We must be careful when we talk about competition. In the health
care arena, a rose by any other name is not necessarily a rose.
Competition is not always "competition" in the traditional free
market sense. Hospitals have always competed aggressively with each
other. But new players, mostly smaller and mostly private investor-
owned, compete on an entirely different level. …