In a free market economy, the government has rightly made it illegal for businesses to ban together to "fix" prices. A group of gas stations, dentists, stores cannot have a meeting and decide to set a certain price for their goods or services to consumers.
Price fixing kills a business's incentive to keep their prices low, produce a better quality product, and give better service. It holds the consumer hostage to whatever price the merchant feels like charging and encourages price gouging.
Private non-profit hospitals and healthcare systems have over the past twenty years gradually positioned themselves so they can price-fix and do it legally. Instead of having their physicians work in independent offices, they have gone to hiring them as employees. They then set or "fix" the fees that each of these doctors charge.
Gives Ability to Set Prices Without Market Controls
In the case with Sarah Bush Lincoln Healthcare Systems, the 145 or so doctors on their payroll represent a vast majority of physicians in the area. Few independent offices remain. This gives them the ability to set prices at whatever level they please without any free market controls.
Since SBLHS has such almost absolute control over the fees charged and other variables, the consumer cannot shop around for a lower fee, higher quality, or better service provider. This organization has gained near absolute control over our area's healthcare.
Practice is Legal But Anti-Consumer and Anti-Free Market
While this arrangement at Sarah Bush is perfectly legal, it is still anti-consumer and anti-free market. It has the very same bad effect and worse as the illegal price fixing.
Since SBLHS as a private non-profit is able to operate in secrecy, it was able to do this over the years without the public knowing exactly what they were doing. Had the public known the full implications of these actions, it surely would have been stopped. Now it is well established practice and would be difficult to change.
A Lesson Should Be Learned
A lesson should be learned here. The public must insist that SBLHS open its board meetings, publish the minutes, and have current financial disclosure. If we don't, we will pay dearly in the future in higher costs, decreased quality and choice, and in consumer service.
Dr. Don Selvidge
Action for Affordable Healthcare (aah)
