Why Doctors Aren't Allowed To Own Hospitals In America

When Obamacare passed, there was a section nobody read out loud. A single provision that quietly banned the most highly trained people in healthcare from owning hospitals — the same hospitals that, across the board, were delivering better care at lower prices with happier patients. That's not a coincidence. It was on purpose.

In this conversation, I sit down with one of the sharpest minds in healthcare to pull back the curtain on what's really running American medicine. We talk about the cover story Congress was sold to ban physician ownership, why nonprofit hospitals are sitting on billions of dollars in cash while bankrupting the families next door, why the people in the suites have far less power than they want you to believe, and the single move physicians could make right now that would change the entire industry.

If you've ever wondered why care keeps getting worse and bills keep getting higher — this is the episode.

In this episode, you'll learn:

• The real reason your local "nonprofit" hospital is sitting on a fortune while sending your neighbor to collections
• The hidden contract trick that quietly rewards doctors for ordering more, not for healing more
• The one source of power every physician already has but almost none of them are using

Connect with Heath Veuleman On X: @HeathVeuleman

Chapters:

00:00 – Cold Open 00:39 – The Section Of Obamacare Nobody Read 02:36 – The Cover Story Sold To Congress 03:53 – Why Nobody Has Heard About This 05:57 – Nonprofit Hospitals And The Tax Trick 07:59 – Why Banning Physician Ownership Makes Zero Sense 10:05 – How Physicians Are Wired To Reduce Risk 12:48 – The Numbers Behind Physician-Owned Hospitals 14:11 – The Stark Law Double Standard 17:33 – The RVU Contract Trap 19:41 – How Self-Referral Got Worse, Not Better 21:58 – The Population Of Pittsburgh Quietly Owned 26:55 – The Tens Of Millions Wasted On Autopilot 29:51 – Where The Next Physician-Owned Hospitals Are Coming 32:01 – The OB Deserts Of The Frontier West 36:47 – We Don't Need More Money. We Need Different Money. 38:39 – Why Hospitals Want To Become Insurance Companies 45:14 – Advice For Medical Students And Residents 50:13 – What All Doctors Should Unite Around 53:11 – The Empty Suits Behind The Curtain 58:13 – What CMS Could Fix With One Memo 01:08:04 – Why The Medical Staff Is The Real Power 01:11:35 – When Doctors Thrive, Patients Thrive

Transcript

SPEAKER_01 0:00

Nancy Pelosi famously said, we have to pass it till we know it's in it. And that was about Obamacare. And I always wondered what's in Obamacare that's so repugnant that we can't show it to the public. And that is section 6001. And that section is a prohibition of existent ownership of hospitals. Now this is unheard of in America because really what we're saying is the heck with the free market system. We're going to end that. We're going to take a million people out of this. And it wasn't just a million random people. These are the most highly trained people in healthcare, the exact ones that you want to have own the hospitals. And you have to ask yourself, well, what did physician-owned hospitals do that were such a problem? And here's where the sins of the physician-owned hospitals were. They delivered better care at a lower price with better patient satisfaction. So what did their competitors do? Their competitors went to Congress with a big bag of money and they said, if we give you this along with some favors, can you help us out? And that's what happened. And shaman everybody who voted for that, because that's hurt all Americans since then. But today I'm very excited. We have an expert on physicianal hospitals and hospitals in general. We have Keith Voileman here. He's going to explain all this to us. And as always, this is for non-medical advice and this is educational purposes only. And if you have a problem, you should always seek the advice of a physician. Keith, thank you so much for being here this morning. Thanks for having me. Good to see you. Good to see you. I'm so excited. Now, when one of the things I want to ask you is when the lobbyists, the hospital lobbyists, went to Congress, they had to provide Congress a cover story because there's no way that Congress was going to say, listen, we are just screwing over the physicians. We don't care. We've taken these favors. So they had to get a cover story. Could you tell us what that cover story was?

SPEAKER_02 1:56

It's jobs. The cover story is jobs. So the American Hospital Association, if you always notice, and so does the Federation, they do the same thing. They lead with what they provide to communities. They don't lead with what they extract from communities. They say, hey, we've got your community employed. We're the number one employer in your community, which in some cases is true. Healthcare is the number one employer in all 50 states today, in some form of healthcare. So they lead with it, it's a jobs program. They can't lead with patient safety. They're the deadliest place in the world, the tertiary care hospital, community hospital. We don't want you to go in there. We uh people who really do healthcare, uh, especially physicians, uh, they are trained to be conservative in nature. That's why their outcomes are better, it's why their costs are less. Uh, and that's why the FHA and uh or the FAH and the AHA can't uh lead with outcomes or patient safety or cost. They have to lead with jobs. And that's what a legislator hears. They hear jobs and votes, jobs and votes. And that's how you get a legislator to act. Um and of course, money doesn't hurt.

SPEAKER_01 3:13

No, yeah, absolutely right. Well, the funny thing about this is I didn't know about this for years. And I was following the press coverage of Obamacare, I was reading about this every day. I never heard about this. And when I talk to the public, nobody even knows this is a thing. This is like the best kept secret in healthcare.

SPEAKER_02 3:32

Right. Yeah, it really is. I mean, and this is 100% controlled by a lobby uh and special interest. And I think today, as people are starting to look at their checks, and you know, I started writing about this last year because you can see the kind of the financial writing on the roll on the wall. What happens when a when uh we go into recessions and some may argue a silent depression that we're in right now today? And I look at this completely apolitical, by the way. This is just just just what the facts are and what the consumers are seeing. The consumers are gonna look at their W-2 paycheck. Or if they don't have a W-2, they're gonna look at how much they're bringing in. And they're gonna see that the first thing that leaves is all these taxes. Where are these taxes going? How am I being taxed, local, state, and federal? And then the next thing they're gonna look at is what's the biggest chunk out of their paycheck? Health care. What am I paying for and what am I getting? And you could see this coming years ago that we were gonna be in this place today. And sure enough, after the debacle affordable care act and the premiums going up, uh we we started hearing it in about November of last year, and then it started getting real in January. And it's a real problem. I mean, it's a real problem, and so that's kind of where we are today. Consumers are saying, Well, what am I paying for? I'm not getting anything. And the Catholic hospital down the road, this is not against Catholics or anything like this, but it could be a Baptist hospital, it could be a Jewish hospital, it doesn't really matter. This non-for-profit is not only taking my tax dollars, but they're putting my neighbor into bankruptcy. That's insane. That's insane. And I think this level of insanity has started waking people up and saying, where are we at? And we look back and it's very ugly.

SPEAKER_01 5:17

Well, it is interesting with the nonprofits because people don't really think about it. A lot of these nonprofits are sprawling, they have huge campuses, a lot of real estate holdings, usually in the best part of town, and they're not paying any property taxes, which means they're not really paying for fire, for police, which means everybody else has this huge burden. And once people start realizing that, you're like, whoa, wait a minute. And usually like they're in a central Manhattan or Boston or Philadelphia or wherever, but you know, they have the most expensive real estate. And you just take it off the tax rolls and it really hurts communities. And like you said, and they still are able to send people to collections into bankruptcy. And one of the other things that really bothered me about the hospital lobbies is they say, well, you know, the a couple of things that physician on hospitals cherry pick. That that's always the big thing. They're gonna drive, you know, they're gonna destroy community hospitals and we won't have access. And then they're gonna increase costs because of self-referral. Those are their two lines that they always use. But the good thing now is the good and bad thing, we have a 16-year experience now with the prohibition physician hospitals. So now we can say, okay, do we have more access, especially in rural areas or less access? Do we have maternity units that have closed by the hundreds by nonprofits? And then the nonprofits have taken that money and brought it offshore to the Caymans and opened a private equity fund of a billion dollars, or they sponsor a sports team or run Super Bowl commercials. So, you know, you see that right away. And then the second part of it is have costs gone down or have they gone up? And of course, we both know that hospital costs have gone up more than any other service, medical service, and it's bankrupting the country. And everybody in healthcare knows we have to get those costs lower.

SPEAKER_00 7:07

That's right.

SPEAKER_01 7:08

So I would say it's been a failed experiment, and there's no reason for prohibition on physician and hospitals to stand. It's time for it to go, in my estimation.

SPEAKER_02 7:20

No, it it there that's exactly right. There's no reason for there to be a prohibition on hospitals. If we just take macroeconomics, first of all, and get out of healthcare, for example. What if uh I said that plumbers couldn't own plumbing businesses? Everybody can own a plumbing business but a plumber. Yeah. That's stupid. That's on its face. You would say it doesn't matter if you're Republican or Democrat or Party of the, you know, Whigs or independent, doesn't matter. Yeah. That's dumb. That's so dumb. And so uh why would you ever say that a physician can't own a hospital? Uh it makes zero sense. And it also speaks to uh just kind of this asinine theory that we have followed. People don't understand the nature and education of a physician. Physicians, one of the challenges in physician-owned hospitals is physician entrepreneurship that is not taught in medical school. And the nature, it's not necessarily business. I don't like this whole, you know, canard that physicians are bad at business. I don't think that they are. They certainly run practices well. Um, you know, there are challenges with physicians and businesses, but it's physician and risk. Physicians are trained to minimize and mitigate risk. They're not trained to come in and put you on what we call a referral loop. Lord knows I sold the referral loop that I created to hospitals and health systems all across this country, where we just put you on a conveyor belt and we get you for episodic care and encounter after encounter after encounter. That's not what physicians do. So the very nature of physician-owned hospitals are aligned with the physician and the consumer, the patient. It's they want the lowest risk, most conservative approach, and then they escalate from there. What that does is it creates more meaningful outcomes and it reduces costs. It's a natural alignment, but that's never discussed. People don't even acknowledge that it is the basis of physician education and how physicians work.

SPEAKER_01 9:25

You're right about the risk. And I'm one of the most risk-averse person people, and you're 100% right. You go through your whole life and you're trying to anticipate a problem, and how can you head that off and what can you do? I mean, that's what we do. And the interesting thing, when I was at the physician-led for America conference last year, and you hear people speak who are the owners of physician-led hospitals, physician-owned hospitals, and they start speaking. They'll initially start speaking about some financial metric, but about five minutes into it, they can't help themselves. They start speaking about new advances in patient care, because that's what excites them. You know, the other part is, yeah, they have to meet payroll, and you know, they have to be financially responsible. Sure. And they'll do that and they do a good job with it, but it's not really what drives them. The financial, and that's the difference to me is when you have a corporation own a hospital nowadays, especially these nonprofits and you know, these corporations that used to be, and I'm Catholic. There's a difference when I grew up in Chicago in the Catholic hospital then than the Catholic hospitals now. The Catholic hospitals then were run by nuns. They were there 24-7. And these hospitals were all about the patients, totally different. It was mission-driven, and you know, they weren't, they would never send money over to the Caymans. Now there's no difference between a Catholic hospital, these large Catholic hospitals are no different than HCA.

SPEAKER_02 10:55

That's exactly right. It's the same thing. I won't say the name of the hospital. They were a great client, but they have a $4 billion cash position on their balance sheet. Blue Cross Blue Show to Louisiana only has eight billion. You're telling me that one particular health system is sitting on four billion dollars in cash and and bankrupting Louisianans? That's insane. That's insane. It's nuts. And uh, you know, I think people are starting to wake up to it. You know, I think people are starting to see it. You know, why is this health system getting on a private jet flying to Kentucky Derby? I know three of them that did it last weekend. I mean, it's not and I'm not I'm not saying they're bad people. These are I don't think they're evil people, I don't think they're malicious. I don't know that they're the smartest people in the world. I certainly would not be posting that on my social media or texting friends and saying, hey, we got this G550, you want to go to the Kentucky Derby. I don't think that's a don't know that that's a good idea. Um, but uh I think people are starting to wake up to it, you know.

SPEAKER_01 12:08

No, I agree with that. Now, how many physician-owned hospitals are there today? And could you give us a breakdown of kind of focused specialty ones versus general ones and urban versus rural?

SPEAKER_02 12:18

Yeah, I think there's about 243-ish physician-owned hospitals in America today. Uh, and that's out of 6,000 uh, you know, 6,100 uh about. So I mean it's a very, very small number. And of those physicians, less than a thousand are actually owners. And that kind of vacillates. You we get that from the CMS data files. The CMS 855A is where they list who the owners are. And so uh for certain, less than 1,100 physicians have a uh equity interest in a hospital in the United States. Uh, and there's 1.1 million physicians. So we're we're talking about a fraction of a fraction of the number of physicians. Um, and I think that you should, if you are producing, and this is what we're really talking about, is just recapturing your production. We're not talking about going, you're not going in anybody who owns a physician in hospital, this doesn't buy you a yacht. I think there's a big disconnect. We we don't get to participate in subsidy and arbitrage. So that less than 1,100 people, all they're doing is recapturing the production that's being harvested and extracted from them by health systems. That's really all.

SPEAKER_01 13:31

Yeah. Well, you know, one of the things that they talk about, the I'll call them the Ajas, the American Hospital Association. Sure. They're kind of the opposite of the Maha, but I'll call them the Ajas. But one of the things that they talk about, there was a letter that they sent in response to HR 4002, which is trying to overturn uh Section 6001. So that kind of set them into a panic, which is kind of interesting because there's less than 4% of the hospitals are physician-owned hospitals, but they get in a panic over this, which I think is kind of ironic. I mean, it's amazing how afraid they are to compete with 4%. So they know they're better. I mean, they're admitting that they're better. If I was in Congress, I'd be like, wow, they really are afraid of these people. Maybe we should give them a chance to do that. But they talk about the Stark violations because they talk about Stark laws are self-referral from physicians. If I or my family own any ownership in a lab, in imaging, whatever, durable medical equipment, I can't send referrals to there. Otherwise, I can be sent to prison and fined and kicked out of all federal healthcare programs. However, this is a big however. And the the hospitals are able to do it because of an employment exemption. Could you walk us through how that works with the work RVUs and in your past employment? Did you ever set those arrangements up? Okay, yeah.

SPEAKER_02 14:54

If you could just tell us, yeah, did physician contracts all the time. Yeah. Stark again from Peter Stark, that was created by the American Hospital Association. Um, that was created to limit uh the physician ability really to practice and to drive them into hospital-owned groups. That was the entire theory behind Stark. Today, if we look at national health expenditure, physicians get about six cents on every dollar. And where that six cents is, let me clarify this because sometimes I get some kickback on that, that is after attribution. So if you look at NHE, it doesn't have attribution by health system-owned entities. Well, if the health systems own that big category called physician services, physician and clinical services that include nurse practitioners, PAs, non-physician practitioners, that's all in that one little category. Well, hospitals own about 80% of that, that entire category. Now, even if we use the most conservative amount, 78% of that category, uh, physicians are only about eight cents on the dollar. When we give full attribution, physicians only get about six cents of every dollar. It is not true that physicians even get the high estimate, which the high estimate is 21 cents. Three trillion dollars, they're about a year to go to hospitals and health systems. That's number one. Then health systems do this little trick where uh they work within Stark and within CMS guidelines using something called work relative value units. So the Office Inspector General says, I cannot pay you per tick, I cannot pay you per encounter, per CPT code, per production, whatever that looks like per episode of care. But I can pay you um a wholly contrived number that hospitals and CMS controls per code build. So it it is again, it's stupid on its face. Uh most Americans don't even know that this is how physicians are paid. And I'll just give you uh a friend who is with ENT and he's kind of winding down his career. He's in Idaho, in southern Idaho. And uh he's decided to go work for a small rural hospital close to him in Idaho. They offered him a contract. RVU only. No bags, RVU only. $68 per RVU generated. So what is his incentive, do you think? He's an ENT surgeon. Do you think his incentive is to reduce costs, to not see patients, to not do surgeries? No, his only incentive is to generate RVUs. That's how he gets paid. So Stark says, I can't pay someone per tick, I cannot pay someone by referral, but the hospital can now load this surgeon up, and they're going to make the difference between $68 and the allowable. That is that's called arbitrage. That difference right there. And so now they have total arbitrage on physician production. That how that's not illegal, I have no clue. And that came from one of these white shoe healthcare law firms. Insanity. So now we're doing RVU only contracts. Uh, how that is compliant, I you know, only a healthcare lawyer can tell you, you know, that it's kind of like the old preacher joke, you know, if if you ask two healthcare lawyers, you get three opinions. That that is, you know, these people have cost us so much money, have no understanding of practical healthcare. It's it's crazy. Um, but I just looked at that last week. That that is not that's that's not in theory, that's happening right now today. So, you know, it's it's STARK has never served the purpose. It's only cost us more as a country, and by the way, reduced access.

SPEAKER_01 19:01

Well, the interesting thing is it's moved self-referral from the private physician to the hospital, but now the referrals in a hospital are a lot more expensive than anywhere else because now you get the facility fee. I mean, it's the worst of all worlds, you get the facility fee. And I have never heard of anybody charging more for a CT scan or an MRI or basic labs than a nonprofit hospital. Now, I'm sure somebody has somewhere, but I've never heard of it.

SPEAKER_02 19:29

Well, and and part of that is also asinine. So I'll I'll just tell people how hospitals are charged, how how they do their charge master, and you're going to, you're gonna be shocked. Um, but what they do is they take a charge master, which is all their codes and all their prices, and they pay consultants six figures, not small, not small, it all just depends on what the size of the hospital, how big the fee is for the consultant. But they come in and they just say, Oh, we're just gonna add six percent to the top. We're gonna put, we're gonna, or we're gonna do CPI plus six. And they do that year after year after year. There is no science behind it. There's none. That's how the charge master's done. And that's not an opinion. I've I've paid the consultant to do it, and that's that's not far, far away. That's why these these CEOs they don't even think about it. No, just form that out to this XYZ consultant at a revenue cycle company that you know, I'm not gonna name names that most of them use. You get it back, it's just a six percent increase on your on your file. You upload the XL file, boom, you're done. You do that once a year. They have no idea what the cost. If you weren't, if you were to go to a a tertiary care hospital and ask a CEO how much does a sponge cost? How much does a pack of four by fours cost? How much does a case of four by fours cost? They couldn't tell you. They couldn't tell you where the CT scanner came from, couldn't tell you the brand of it. They can't tell you how it's financed. Is it lease? Do I own it? All they can tell you from uh for sure is that it came from the GPO that they're signed up with. That's all they can tell you. And so um, you know, it's it, these are husks of human beings. That's why costs have ballooned out so much. There is no proximity to capital.

SPEAKER_01 21:18

The other thing that's interesting from the letter from AHA is that they were bragging that they have over 270,000 affiliated physicians. Right. So this is 27, 30% of all physicians, probably more if you're talking about primary care and physicians that are working. That's a huge number. That's the population of Pittsburgh. So they own the population of Pittsburgh, who is generating all these inflated costs. And then at the same time, they want to turn around and look at the boogeyman. And I was thinking about it this morning. It would have been like if the other booksellers went to Congress and said, there's this new upstart Amazon. They have 5% of the market. Which is where positional hospitals were in 2010. We need to ban them from the business. Let's get them out of there. That's the equivalent of what's been done to physicians. So not only has it been un-American, this is the most un-American thing to do, but it's also harmed the country. I mean it's bankrupting the country and you get worse care. The other thing I was I was thinking about is there's a lot of criticisms because there's specialty hospitals, a lot of the physicianal hospitals, orthopedics, fine, whatever. But when you look at muscle skeletal, about 40% of the care is wasted. It's either the wrong care, the people that need surgery. And if you're an employer, the most expensive muscle skeletal price that you pay is the wrong price for the wrong care. There's no more expensive care than that. In my mind, if you're going to have surgery, you want to go to a specialized orthopedic place. You want the guy who sits there and does shoulder replacements all day or whatever you're going to need. That to me makes all the sense to all and provides great value.

SPEAKER_02 23:02

Yeah. And it's just, it's also just some very common sense science that's reflected in the data. So the consumer wants to go to centers for excellence. If I need orthopedic care, I want to go to an orthopedic hospital. And I want to, I want to have somebody who does this all day long. If I am a female and I need maternal child services, I want to go to an OBGYN hospital. I want to go to a woman's hospital. I want to see people who do it all day long. If I need neurosurgical care or whatever, I want to go to a center of excellence. I want to go to where this is done. That's what the consumer says. We know it. It's in the evidence. We also know the outcomes are better. And not just a little bit, they're demonstratively better. And that's just on a little bit of data that we've got. We don't collect a whole lot of data on that. Infections are way less, way less in uh physician-owned enterprises compared to these big not-for-profit entities. Um and part of it is how just the just the very basic care that's done. Uh, and again, that aligns with how physicians were trained. It's how they work. Physicians work to minimize risk. And they are, whenever you're that proximate to capital, you know who the nursing team is on this segment that's going to do these things. You talk to them. You know, you don't have to document these stand-up meetings. You're doing them. That's what you do every single day. It's not in theory. Uh, and I'm I'm there, I can see it. You know, I can see these things happening.

SPEAKER_01 24:43

And you get the best nurses too. I mean, that's a large. Every time I went to physician-owned AST, I loved operating there. All the OR staff were phenomenal because they knew it was good at the hospital and they knew the difference between good and bad staff, which a hospital has no idea of. And the hospital can't get rid of bad nurses, they just move them around different places. And but the AST has got the best nurses and same, you know, same thing for any physician-owned hospital because they understand the importance of that. They know the nurse, and the nurses love it. And the other difference is when you go into physician-only AST, the amount of bureaucracy gets whittled away. You just really get down to what do you absolutely need to do to do the job right? It's much quicker, you get much faster turnover. Everybody's focused on getting the job done. And I was working at a hospital where they said, okay, we're going to do all these timeouts. I'm like, okay, that's fine. Great idea. And I said, okay, since I'm an OBGYN, I wanted my timeout. Do we have a recent pregnancy test? You know, I mean within 24 hours. They said, Oh, we can't do that. I'm like, why? Because they were modeling after orthopedic surgery and they didn't want to change it, where they were saying, okay, is it right or left? I said, okay, that's important when you're doing a hip or knee and you can't tell. That's really, really important. You should absolutely do that. But every specialty is different. They could not see that. They absolutely argue with me, and it was crazy. Just little things like that, where a physician only'd be like, oh, yeah, it makes sense. Yeah, make sure you you have a negative pregnancy test before you get started.

SPEAKER_02 26:15

Yeah, I'll give you a very good example of a community hospital and how Yestel can create millions and millions of dollars in expenses. So you go to a hospital and they had an adverse event in this tertiary care hospital uh 20 years back. And they had an they had an infection that spread uh throughout an ICU. Um and the way I found this was I was going on the floor of the hospital and around 35, maybe 40% of the patients were in reverse isolation. I was like, what's going on? Yeah, there's an isolation cart out in front of every door. What just and it I was just the volume. I mean, because isolation has a whole lot of regulatory particulars you've got to follow, infection preventionists come out, you got to wear all this PPE. There's a whole lot of stuff that goes on with with that. And um, and so it just I was just looking at the unit thinking, what's going on? So I talked to the chief nursing officer of this very large hospital and said, Oh, well, you know, we had a we had a CMS survey uh 20 years ago, and and this was our corrective action. And I was like, Well, this is horrible, this is wrong. You start digging into it, somebody had basically placed a little um tickler in the electronic health record. So whenever somebody comes in for registration, if they ever had a an ICD 10 diagnosis, at that time ICD 9 diagnosis related to um a you know, even a boil, they were automatically cued for reverse isolation. No one ever asked why, and no, you no one ever it never hit them to look around. And I'm doing all of these isolation precautions on all these patients. That's that's a whole nother set of of just documents that nurses have to do and buttons you gotta click and things. Yeah you got to consult for physicians. There, I'm talking on the order of tens of millions of dollars that have been wasted just because someone, and it's not again, no one's evil, no one's bad, but no one's thinking. And that's a real problem.

SPEAKER_01 28:37

I saw that with the sepsis bundles that were on the electronic health records because they would trigger all the time. And it was a problem in OB because a lot of things that triggered it were kind of normal physiologic changes in obstetrics. People's heart rate was normally up a little bit when you're pregnant. Things like that, your white count tends to be a little bit higher. And those are all normal changes. We're used to that. But all of a sudden, you know, these alarms would go off, and you know, the nurses would have to do all these extra steps. And it really like, you know, to your point, it's wasted money, but it also takes people's attention and focus away from critical things that they need to be doing. So that's the second part of it, too. What do you see as a future of physician-owned hospitals? And I I know you've opened up your, you opened up a hospital, I think, in Louisiana, and then there's going to be North Idaho's coming.

SPEAKER_02 29:26

Yeah, we did the the uh the, I think it was the first physician-owned hospital since 2010. Uh a group of 12 plastic surgeons opened. It's a breast cancer hospital, and it was mocked from the get-go. Five different attorneys told them they couldn't open a hospital. Well, that's not what Section 6001 says. It says you cannot participate in Medicare and Medicaid and open a hospital. Um, but this particular procedure that these hospit these physicians were doing weren't really Medicare and Medicaid. And they would love, by the way, to take Medicare and Medicaid, but they were prohibited to do it. Now, I that that particular hospital I think is going through some exemption uh process right now for that. Uh, and I think they're gonna do a demonstration waiver. But before I ever take physicians and do a physician on the hospital, we go to every single health system in town. We did that in Baton Rouge. Uh we're gonna do it at this new location in the Frontier West with a with a women's hospital. Um, I would do it with behavioral health hospitals. The reason physicians want to open a hospital almost always is not about money. 99.9% of the time, it's capacity. Capacity and patient control. They need they need to get patients in and they need to do certain things to keep the patients well and to get the outcomes that they have. That was that was the genesis of the Baton Rouge hospital. They needed more surgical time, they needed more OR time because there were more breast cancers uh showing up. And um we had the data back then in 2021 that that projected exactly what we're seeing today: explosion of breast cancers. And so um they they needed that capacity, didn't have it. Look in the frontier west. There is a women's health desert, there's an OBGYN desert from Spokane, Washington to Wyoming, Idaho, Montana, Wyoming. There are no OBGYNs, they've left because hospitals, CEOs, let's just be honest, wanted the butt, wanted the bonus. It's not that women's health is a loss leader. That's not true. It is true that their margin is less. That's true. You know, they don't make the same margin as orthopedics, they don't make the same margin as spine surgery or or neurosurgery. But it's a profitable service line. There's no doubt about that. Um, and so they these CEOs wanted a bigger bonus, and to do that, you off, you know, the low producing uh margin and uh elect for higher margin services. And that is what's happened to the Frontier West. It's it's a desperate situation for women uh from Spokane through Wyoming. Uh, there are no professionals, very, very few.

SPEAKER_01 32:18

That's a big area. And it's kind of interesting when I hear about rural healthcare, because I practice in Wisconsin and there were areas that they said, well, rural healthcare. Well, realistically, they were 20, 25 minutes away from world-class community hospitals. I'm like, that's different. I'd practiced out in North Dakota. People were hours away from hospitals. That's a whole when you get out west, it's a whole different game. That's exactly right.

SPEAKER_02 32:42

So I think in rural health, I love it. Um, but they they're a mafia. The the the biggest uh lobbyist in Louisiana is the Rural Hospital Coalition. That is the number one lobbyist in the entire state of Louisiana. Um, and there are what 84 rural hospitals in Louisiana for a state of 4 million people. They're about, you know, I haven't done that work in a long time. Um, but uh, you know, there are places that are truly rural and who who need the services and who need the care and who should be, by the way, getting some kind of subsidy to help. Uh, but but physician-owned hospitals will never get that. Um, and there are solutions, and I know you've pointed this out before. I've seen you write about this, but there are solutions where you can have creative ventures to um where physicians uh aren't preyed upon and could help rurals um all day long. There are models for that. And so um uh, but but that's not the goal.

SPEAKER_01 33:50

You know, that was interesting. And I wrote that, and and that was uh based on what was happening in North Carolina, other states, where they're bringing in international medical graduates, and they're saying, well, they don't have to do a residency here. And they're all of a sudden the rules are very, very light. And they're saying, well, we have to do that because we can't get people in rural areas. I'm like, you can get physicians in rural areas if you incentivize them. You set up the incentives, like Charlie Munger says, show me the incentives, I'll show you the outcome. And you know, build the medical schools in rural areas, take in-state people for the residency programs, because that's who's gonna stay. A lot of it's just so simple. And then if you're in an area that's truly rural and you need them there, make them nonprofit. Don't make Columbia Wheel nonprofit, make them nonprofit, because that's where I'd rather see that money go to and supplement them as needed to help them out if you really need them to be there. Because and I've worked, I moonlighted in rural areas in Minnesota and very small towns. And the one place I'd come in, I'd work Friday night to Monday morning. I'd worked the ER, and they had a little doorbell. So when people came to the ER, they'd ring the doorbell. And yeah, and I had one person there. So I was a resident male clinic. So I'd sit there and I'd order like five things. And the poor lady go, Well, what should I do first? I'm like, Oh, yeah, that's right. I have one person, I don't have a team. So she's like, Do you want the x-ray first? Do you want the lab first? You want the IV first? I'm like, oh my God, I got one lady here. But it was so different, you know. And I would hold a clinic Saturday morning, and you know, and you they these little hospitals just take you in. You know, they give you a nice room to live, you know, they give you all the food you wanted. They were so happy to see you there. And then it was a family doc in town if I really got stuck, if I needed help. And we were basically trying to give them a little break. But it's a whole different world. And these guys are phenomenal docks. Everybody looks down at these are like rural family docs, like these are country pumpkins. These guys have to do tremendous amounts of things with very, very little. And these are bright guys, they're hardworking. And in my mind, they're like the best physicians in the country and they get no respect. So I would 100%, and that's what I was kind of writing about. Let's let's support them and give them the right incentives. And all of a sudden, people be saying, Hey, I can get paid a lot and it's great work, it's rewarding. Then you can start attracting people there and get the local people interested in it because that's who's going to stay. That's exactly right.

SPEAKER_02 36:10

We we don't need any more money. We spend 12 and a half billion dollars per day, per day in healthcare in the United States per day. Half of that, 49% of that, goes to hospitals and health systems every single day, seven days a week, 365 days a year. We don't need any more money. What we need is the money to rotate, we need it properly allocated to where the production's at. And I cannot believe we're talking about that in the United States in 2026. If it was allocated properly, because right now we have a dislocation of capital, um, it would actually cost less. So, what physicians can do with like a physician-owned hospital that has some clinic space, um, they can go directly to employers and say, without asking the employer anything, we don't need to see your loss runs, we don't need to know anything, we can save you 10% right now, today, on your health care. 10% right off the top. We don't need to know anything. Direct contract with us, we will provide the care to all of your employees. Um, if it's a women's health, carve that part out. If it's a certain uh, you know, if you do a certain service line, go directly to the employer and say, I can do these services for you at this cost. It will cost you less. It will cost you less. Employers don't know this exists. Um, they don't, they don't even know it's out there, they don't even know it's a possibility to do. Um, but all of these things can be done and it drives costs down. Hospitals and insurers have a perverse relationship. Insurance companies need hospitals to go up on their fees. That's how they make margin. And so um, and hospitals, much to the surprise of insurance companies, started shanking them in the back last year, knowing that this issue was going to come up. So hospitals started attacking big insurance. It really kind of started in earnest in 2023, uh, a little more bloom in 2024, and then there were some knives in 2025. What you're seeing today with the hospital big prices is the pushback from AIP. You're seeing the lobbyists now from the insurance companies say, uh, we're not gonna play that game again. Uh, because what hospitals want is to be the payer provider. They're already the provider. It's very difficult for the insurance company to become like optimum. It took years for optimum to become optimum. But for a hospital, they can become optimum overnight. All they have to do is have, you know, just a little bit of knowledge about how to run an insurance company. They've already got the cash. All they've got to do is just roll that out. And this is what you're seeing now, especially, especially in major metropolitan areas, are hospitals typically they'll start in the Medicare Advantage space. Then they want to get, notice they don't ever go commercial. You know, there's only a handful that want to do TPA. They want to be on the government tit. So they want to go Medicare Advantage, they want to go Medicaid, you know, manage Medicaid, they want to get a little subset of population, and they're going to target very healthy people because they want to make the margin. So they're gonna, they're not gonna do Medicaid behavioral health where the margin is very low. They're gonna do um like child and adolescent, they're gonna do a, you know, where you get EPSDT screening money and you get a higher PMPM. So um that's what hospitals are are focused on right now, is becoming the payer provider, it's a race to it. Um, and whenever you see them uh buying hospitals like UPMC was just announced that they announced that they were buying uh what common spirit in Ohio, so now they're moved from Pittsburgh to Ohio. What they're doing is buying lives. They're not they're buying the lives associated with those hospitals because the hospitals own the providers, and the providers are where uh the lives are attached. That's what I've been trying to tell physicians all this time. If I'm still a hospital CEO, I go back and I want to like steal a service line from another hospital. The reason I'm stealing the service line, number one, so I can have that service line, but I want all the lives attached to that physician. The patients are physician loyal, they're not brand loyal. They don't care what's on your white coat, they just care that you're the physician. Hospital CEOs found that out 30 years ago, and that's the move. So this is all the consolidation, if you look at it, is all about lives. And then and then once you get that, then you can have a PMP payment, which is the ultimate in healthcare, you know, that per member per month payment. Um, and I try to convince physicians on a daily basis that that you can do the same thing. That you you want to be in the PMPM business. And guess what? The consumers align with you, they want to pay you PMPM uh per member per month, uh, however that looks for you. And and you can do it on a uh on a smaller scale, but it's the same principle at work.

SPEAKER_01 41:10

So are you talking mainly direct primary care?

SPEAKER_02 41:15

You know, for direct primary care, you could do some kind of membership model, you can do you know um direct surgical care, you though those kind of models. Um, that's basically what you're offering to um uh to to uh employers as well. Uh you know, you can do it on an encounter basis, but if they were to do a PMPM model, it would be much cheaper overall. That you kind of have to work into with employers over time.

SPEAKER_01 41:42

Sure. And for me, that would work great with muscle skeletal. I mean, if you had the full service, if you had, you know, physical therapists, you had physiotry, you had orthopedic surgeons, neurosurgeons all together, because I know that's expensive for a lot of big employers, and you just said, we'll take that on.

SPEAKER_02 41:58

That's exactly right. That's exactly right. I had an employer, uh, an animal protein producer. I won't say the name since beef is in the news right now, but one of the big four, not based in the United States. They had a plant. That particular plant was um uh comprised of migrant labor, uh, people from Mexico, Burma. There's a large immigration facility fairly close to this uh plant and uh uh uh a large group of Africans and nobody could speak to each other. They would bust them in from a metro area to this animal producing uh uh plant, and they were spending somewhere around $13.5 million a year. This is in 2012 uh on healthcare. And the reason is because they would pick those people up, uh, bus them to this metro area. The bus would even stop at apartment complexes, they would go immediately to a tertiary care hospital emergency department, drop off 50, 60 people for ear infections and blood pressure medicine, and and uh it was a very simple fix. It was, hey, we're going to bring uh physicians and nurse practitioners to your site and use telehealth, and we're gonna do some basic primary care. We're not gonna do urgent care, we're not gonna do OtMed, we're just gonna do some very basic primary care. And do you know who was against me? It wasn't the it wasn't the uh the local health system, it it it wasn't uh uh the corporation love me, it was Blue Cross and Blue Shield. It was their TPA.

SPEAKER_01 43:35

Oh, they're getting cut off. Yeah, they get to have 15%.

SPEAKER_02 43:43

They want you to drop all those patients off at this particular emergency department and spend it. You know, we we make a little bit of money on that. We what we don't want to do is lower your health care costs.

SPEAKER_00 43:54

Yeah.

SPEAKER_02 43:54

And I was almost 30 at the time, and I just remember being, oh, Oh my gosh, this is I I couldn't see it at the time. I was like, why in the world with Blue Cross with Shield? Why would they why would they be the ones who try to stop this? And it made no sense. And then that's when it clicked with me. No one is interested in reducing the cost of care. Everyone, except for physicians and other providers, are uh interested in um reducing costs. They're the only ones. It it only benefits health systems and payers to increase the cost. That's how they make money.

SPEAKER_01 44:34

Now, what would be your advice for a medical student or a resident? So in first primary care field and then second in a surgical field.

SPEAKER_02 44:43

I would say um forget everything you know about insurance. Just tune that out. Okay. If you were to go, there are 400 million Americans. There are 1.1 million physicians. Of that 1.1 million physicians, only about 200,000 are independent physicians. So physicians are very scared of how do I make money and I gotta take insurance. No, you don't. That's insane. The numbers are your just do math. Let's just stop, stop, and do math. The the reason it's very hard for physicians is they get institutionalized very quickly. They work in that world, they overhear things, they see it all day long. And so what I try to tell medical students residents when they call is don't listen to any of that. Just just retain some common sense, put on blinders, get educated, but don't adapt to the system. The system is asinine. Open your own shingle, charge what is, and that's why healthcare should be local to begin with. This concept of this Kaiser model is so dumb, it does, it makes no sense. You cannot scale healthcare like that. It was never supposed to be scaled like that. It's supposed to be built in this kind of like buyer-seller model. And and it doesn't just, this isn't this is very basic economics. Look at what's happening with Zillow. Look at what's happening, uh, look at what's happening with Amazon. I mean, number one, there are all there everything is in a business cycle, but you can a system can only grow to a certain amount and still be efficient and effective. And then it begins to implode. Ever heard of Sears? Yeah, you know, Pan Am, Pen Ray Road, uh, G E. Yeah.

SPEAKER_00 46:29

Yeah.

SPEAKER_02 46:30

Uh I mean, there are stories, and healthcare is just follow that similar trajectory. And the the we're gonna have a Sears end for healthcare. So that's what I try to tell physicians and and um uh medical students who are there, residents, come out and think about this very differently. Um, you are a an extraordinarily rare individual. I mean, very, very rare. And you have this gigantic market that's it also, you know, the physicians struggle with this paranoia, this kind of Willy Wonka level paranoia about competition. You I and I think it's bred in residency. You know, medical school is very competitive to get into, then you've got residency where you're all jockeying for position, and you know, you then you hear these stories from administrators who don't know anything, uh, and they're trying to build fear into you to keep you subservient to the system. Um, you don't have a competitor. You're there's only 1.1 million of you. Think about what you could do if 1.1 million of you had the same mind. Uh, think about if I only had 10% of you, I could change the system. Um, because the margins are only 10 to 12 percent in most of these hospitals and and pay. So if you if you could control 100,000, 150,000 physicians who all had the same mind that we're gonna go direct to consumer, that we're gonna change the game, you can change it with 10%. But I can't get 10 physicians on the same page. I don't know if you know, you know what it's like working with a medical group.

SPEAKER_01 48:05

Absolutely. Absolutely. No, it's very difficult. It's very, very difficult. It's very difficult. And most docs, there's there's strange people because I love docs, but they have some very strange characteristics. On one hand, like you said, they are always arguing with each other. They don't get along and they think they're the smartest guy in the room, which I, you know, you got to leave that behind. You don't want to be in a room where you're the smartest guy. You're in the wrong room, as they say, first of all. But the second thing, they want to be subservient to these hospital administrators, and which I don't understand that. And I remember when the electronic health records first came out and we had a large group of independent physicians in this hospital. We're there and they're teaching us and they're treating us like employees. And I just stood up and I said, you know what? We don't have to do this. We don't work for them. We don't have to take on the work of the ward clerks. They just fired and they're not paying us to do this. We could all turn around and walk out and say, no, thank you. Everybody just looked at me and they couldn't believe I said it. And then, of course, the administration's just glaring at me, but nobody did a thing. And I was just like, we have the power. And I always think physicians are the pilots of healthcare. Nothing's gonna happen to that jet if we don't, if we're not in charge. We don't get in the cockpit. And and but I love that advice that you gave. I mean, that's that's wonderful. The other thing is kind of a corollary to that question, and I know this is a frustration of mine, yours, and Dutch's, is you have physicians siloed by specialty. And, you know, what would be the issues that we could say to a pediatrician, orthopedic surgeon, an OB, a neurosurgeon that we should all agree on and we should all advocate strongly for and unite on those issues. What would be the core ones?

SPEAKER_02 49:55

Well, if you if you all came together and were working as a cohesive group, then um you could actually reduce your own costs. And that is something the system doesn't want you to know either. So you could scale your costs without having to come together in a in a conglomerate where there's new ownership or management control. So you could lower your expenses. You all could go to a GPO together and say, we're all gonna sign up. And now this is our volume on X, Y, and Z. You could you could probably save 20 cents on the dollar right now today if you all would come together and do that. Um and you you can be a cross specialty, you know, pediatrician uses a four by four, uh, orthopedic surgeons uses band-aids. You may not use the same scopes or things like that, right? But the bulk of your your costs you can save on. Um, you can, I love what I love what Dutch does in uh help trying to help or trying to help physicians convert their expenses to assets. Your med mouth, um, your uh property and casualty insurance. A lot of those, what some people would call fixed costs that are inherent to your practice, however you practice, if you would all come together, you could reduce that cost by managing that risk. You could turn those into assets. Um, you also, if you had one voice, which is what I love about the physician, uh, physician-led healthcare for America, your advocacy would look very, very different. Today it's splintered out. And you have radiologists over here, and I'm not disparaging anybody, but I don't know of anybody who actually speaks like the PHA, who is inherently just for physicians. And I don't they don't pay me anything, I don't get any money from the PHA. Um, I just when I'm thinking about who is speaking for physicians in the United States, it's not the AMA.

SPEAKER_01 51:56

No, absolutely not.

SPEAKER_02 51:58

It's not medical societies. Nope. Um, and physicians need some advocacy. Uh, physicians need to speak because the the truth is you do all hold the power. I also think just in just some basic psychology, physicians need to come together to start discussing that. Oh, I I I am holding the reins. And and anytime a CEO of a health system has the reins, it's because you have given them the reins. They they they do not control, it's like Oz, you know, like the curtain, these are these are some empty suits. And so these are not very smart people, and that's been the thing that when I work with physicians and doing physician-owned hospitals, whatever that may be, uh, and I take them to to meet senior leadership of health systems. Suddenly, after two or three meetings, you realize, wait, this goober is who's been running healthcare in this community? Are you is this and pushing me around? Yeah, and they they're shocked. Yeah, absolutely. That is just not based in fact. It's all ethereal, that Fugazi, you know, they talk about Wolf of Wall Street. It's it's not real. It's you've it's perception, and and so physicians would come together and see you're not really competitors at all. You are all colleagues. Uh, I love the theory of Duchess Cupetition, you know, that that model, because it's true. Uh, and you all have the power. Um, uh, administrators don't. They just they they have uh they live in this myth that they have perpetuated and and everyone accedes to, but it's not real.

SPEAKER_01 53:44

Yeah, and there's many advocacy things we could take on, like site neutral care to me makes sense for all physicians, getting rid of Stark. I mean, there's so many issues like that, and then get rid of uh con laws, all those things that help every specialty, no matter what. And I really think every specialty should get behind physician-owned hospitals. It doesn't matter if you want to own a hospital or not. You know, I'm not gonna own a hospital, but I'm really supportive of physician-owned hospitals. And it doesn't matter that I'm gonna not gonna own one. I want physicians to have that opportunity for equity and control and better outcomes for patients.

SPEAKER_02 54:26

That's exactly right. And physicians have got to start speaking on their behalf.

SPEAKER_01 54:30

Yes.

SPEAKER_02 54:30

Uh, I tell patients all the time, uh, and I see it a lot on X too, but they believe the problem in healthcare are physicians. Yes. That could not be further from the truth. Yes. But the reason, again, basic human behavior is because that's who they're proximate to. They couldn't tell you who the CEO is sitting in the suite at, you know, high mark stadium. Um, they they they can't tell you who that is, but they can tell you who their doctor is. And so they associate all of this morass with physicians. And physicians have got to start saying, hey, we don't have anything to do with that. We want healthcare costs to be cheaper as well. The average pay for a physician in the United States is $353,000. That that is the average salary of a physician in the United States. The average salary for a hospital CEO is $1.1 million. Who has control? I mean, follow the dollar. That's it, but physicians have got to start speaking for themselves and hearing that and realizing the buyer and the seller of the product and the service are who are in control. You're in control right now. You've just um to take a healthcare part like assignment of benefits, you've assigned your power, and patients have assigned their power to some suit. And, you know, it just is what it is. You have to start incrementally start speaking and saying, well, it's just not the not the case. We're not in control, and uh, and start demonstrating that you do have the power to do this.

SPEAKER_01 56:07

Um it was interesting. I did a post on the payment for a cardiothoracic surgeon under Medicare for a cabbage, which was $1,700, and the hospital gets $50,000. And I just said, clearly, when you're the patient, you see a bill for $50,000, you assume it's going, most of it is going to that heart surgeon. That's what you see that guy, and you're like, he's the guy, he's getting $50,000. And I have this big copay or you know, co insurance or whatever. And people were like just floored that that's what it was. A lot of people told me I was making it up, and I just showed them the numbers. I'm like, here it is. I don't make this up. It's like when you say you can get a CAT scan for $350 in my zip code today. People are like, you're lying, you're making it up. And I'm like, here it is, boom. People, you know, people, it is important to start saying that. And then people are like, wow, that's not a lot of money for, you know, and that's the they have a global period. And obviously, people getting a cabbage are sick individuals. You know, the oftentimes a cardiothoracic surgeon is in the hospital that, you know, next night with them all night long in the ICU. And being an OB, I know who's working their ass off in healthcare because they're in the in the hospital with me at two in the two in the morning, two, three in the morning. So it's a general surgeon, it's a vascular surgeon, cardiothoracic, you know everybody who's working hard. And they're all underpaid for what they're doing. But the last thing I want to ask you, because I love this post that you did on X, was what could CMS and HHS reform right now without legislation? Because legislation is difficult to get passed, but what could RFK Jr., what could Dr. Oz do to help out healthcare right now?

SPEAKER_02 57:46

Yeah, so uh, and they they can do a lot just by the stroke of a pen, a memo could come out. Uh, the way I would do this is is uh through uh very similar to COVID. Uh we had an emergency declaration that allowed physician hospitals uh to come into existence really quickly if they were going to open up beds for for say like existing ASCs or something like that. You can do a lot whenever you declare an emergency. Uh they don't necessarily have to do that, but it would be the path of least resistance. They could just put a memo out today with bullet points, just like they did during COVID, March 4th and COVID, and and they suspended Stark. Most people don't remember that. Really? But they suspended during COVID. Um and and they they certainly limited the the provisions, but the majority of Stark was suspended during that time. And my argument has been look, a lot of things that we did during COVID, um, a lot of people haven't connected the dots, but they still exist, and we have not had this insane behavior that the AHA or AHA, as you talk about, um uh, you know, fear mongers doesn't exist. But the first thing I would do is site neutral payments, get rid of provider-based technical components, get rid of provider-based entities altogether. You don't need them, it makes no sense. All it does is drive costs. Um, and it especially if you understand that hospitals do not make their money based on episodic care. They don't make it fee for service, they make their money on subsidy and arbitrage. And so the kind of incentivize dysfunction is I need the cost to be high so I get more money from the government. So, and when I'm thinking about that, I take those kinds of things away. That would include FMAP matches, uh, which states are gonna have to work through. Right now, most states hit their FMAP cap because of rural hospitals and health systems. Um, but if you again, all you have to do is shift that money around, um, and you could make that dollar go so much further. Um uh, but I would I would start there. I would start with site neutral payments, getting rid of provider-based entities altogether, those technical components you don't, that's it's completely superfluous. I would eliminate the 340B arbitrage, um, which again makes no sense whatsoever. Uh, it doesn't benefit anyone but the health system.

SPEAKER_01 1:00:10

Yes.

SPEAKER_02 1:00:10

Uh, and then I would eliminate provider taxes. Then I would have another section where I started really working on physician independence, which is allow physicians to uh own hospitals, allow them to own IDTFs again, allow uh remove some of these stupid STAR provisions where physicians can't refer back and forth between colleagues or other entities because they may have uh maybe at risk for inducement. Um and uh, you know, these these really um the FTC tried this and then the American Hospital Association got right in the middle of it, and the Federation got right in the middle of it, which was redu uh uh releasing physicians from these non-competes that are dumb and these uh non-circumventions and non-disclosures and non-solicitations, where if I leave, I can't even hire a nurse. Uh I mean, physicians who leave health systems, they may have to leave the state if their contract was done correctly, where I place every single county, uh, depending on the the non-compete law for that particular state. Um, but but we have we've got to allow physicians the ability to just and it's it's nothing special to reclaim their production. You're already producing, but you have a parasite sitting on top of you, and that is the health system and the payer. So all we're asking is for a physician to be able to get paid for what they produce and not an artifice. Right now, we the physician pay is completely an artifice. It's based on MGMA and some Merritt Hawkins data and and and these complete buffoonery uh made-up numbers that we call WRBUs, work relative value units. Um, it makes no sense. Uh, and it's only there to keep you in place at a health system.

SPEAKER_01 1:02:03

So all those things would provide incentives for the first time for hospitals to actually be well managed and efficient. Because hospitals are not efficient. And I was just seeing that the cost of a hospital bed has doubled, you know, over the last so many years, which makes no sense. You know, and it and they're spending more money on administration than they are in healthcare, which to me means that these hospitals are terrible. The non-physicianal hospitals are the worst managed systems in the country. And why does the federal government keep shoveling money towards them? It makes no sense. It makes no sense.

SPEAKER_02 1:02:38

And I just think a real quick just example of that is you brought up the Baton Rouge hospital. Those surgeons, um, uh the uh a hospital there in town hired the top national healthcare construction group uh to get a budget. And the purpose of that was to discourage the physicians to show them that it was gonna be way too expensive. You can't afford this.

SPEAKER_00 1:03:00

Yeah.

SPEAKER_02 1:03:01

And they came back with for this particular hospital with about 101 million dollars to open this hospital. The physicians opened it for $37 million.

SPEAKER_01 1:03:10

Wow.

SPEAKER_02 1:03:10

That hospital would have paid $101 million.

unknown 1:03:13

Wow.

SPEAKER_02 1:03:14

You know, the the local Catholic hospital there, uh, they paid $91 million for a uh some kind of stupid advertising thing with LSU football.

SPEAKER_01 1:03:25

That's crazy.

SPEAKER_02 1:03:26

The physicians almost uh paid three times less to build an entire breast cancer hospital.

SPEAKER_01 1:03:32

Wow, 30 cents on the dollar. Isn't that crazy? That is just crazy. The other thing is happening today is closing arguments in the Peace Health case. And I don't know if you're familiar with that. A little bit. A little bit. So it basically what I understand is the Eugene emergency physicians were in town, it was in Bedon, Oregon for 35 years. They had the contract, and then all of a sudden, a request for proposal went out, and they were pushed out. They said, we don't want you anymore. And these are people that are in the community, been there forever. And then it was very interesting because the medical staff had a vote of no confidence, 99% of medical staff and the nursing staff, in the medical officer of the hospital. This CEO of the hospital is a physician. And what ends up happening is Oregon just passed a law, a non-corporate practice of medicine law. And the Eugene physician said, you know, we think you're violating this law because it was a Powell and D out of Atlanta. And they said, this is really a medical service organization. It's not really a medical group coming in there. And it's interesting, there's to start July 1st. Zero physicians have been credentialed with the new group. Zero. And I, you know, I've been in hospitals long enough that if you do credentialing the usual way, it's not fast. It's three months if it's a day. Oftentimes it's more than that. And so it's kind of an interesting thing. So I really am really happy for it and proud of the Eugene Emergency Group because they all stood together. They said we're not gonna go get employed by these guys. We're standing up. So I really, really, you know, wish them well. And I'm tired of the corporate practice of medicine. And I'm I'm really happy. So, you know, hopefully we get the right verdict. I think it's in a federal court of law. And I'm really surprised that MSO didn't back out. If I was MSO and there were, you know, you're gonna get dragged into a federal court of law. I would have been like, you know what? And there's many other issues with this, but I won't get into it because it's a long story, but I'm kind of shocked on that.

SPEAKER_02 1:05:36

I, you know, I think I think one of the reasons is because they're so used to winning. There's so, you know, you may hear doctors, you know, bitch and vetch and this and that a little bit, but uh ultimately they win. And I think that's the the the theory of the administration and the theory of this this ER company. Um one thing I will say about this, and I and I think they can invent. They can even um do a little bit more if they wanted to go this route. But just remember in a hospital, the physicians control the medical staff. It is created separate and distinct. It has a dotted line on the org chart for a reason that is that has state protections and state legal reasons that it's there. Those guys on the medical staff could say, you know what? We're never credentialing another ER physician at this hospital. Or we're not gonna credential any um any group that's associated with an outside. You can do that. You you can just do things. You control the medical staff, you could rescind any privilege that that MD CEO has. You can you can do it. There's there's no nothing that says you can't. You just have to follow your own rules. So if you've got notices and appeal rights and blah blah blah blah, but physicians can really gum things up if you want on the medical staff. You control that. So I trust try to remind physicians over and over and over again, you do control more than you think you can control. And it's not just a little CMO out there that's gonna get in your way, it's a little hired hitman on the on the medical staff. Uh, you can you can get around that with rump sessions and do what you need to do politically. I think we're gonna probably start seeing more of that. I just keep encouraging physicians, leverage the power that you got. And it does start in medical staff.

SPEAKER_01 1:07:24

Wait, I was smiling when you said that because the hospital I was at in Wisconsin, I was fairly high up in the medical staff, and they were always trying to circumvent the medical staff bylaws. Always. In fact, they brought a new CEO in and he started going around the medical staff bylaws. So I called the office and I said, he just violated the medical staff bylaws. I want a meeting with him. And, you know, they had the meeting they weren't supposed to. I said, you know, I need, you know, all the notes from this meeting. And they were freaking out. And I was like, nope, I want to meet. So he wouldn't meet with me. I met with his underling and I kind of fired up the underling, if you could imagine. And I said, Listen, I apologize. I know you're not the guy, and I'll meet with him anytime anywhere, and I will say the same exact thing. He goes, he goes, I've no doubt you would say the same exact thing. And he goes, and he'll never meet with you, ever. So I was like, okay. But you know, the point was made, and they did have to listen to it. And you're right that it did make a difference with that. And but you're right. But that it they openly tried to get us to say, you know, you're on the medical executive committee. They said, you're not really working for the physicians, you're working for the hospital. And I said, no, I'm a physician, I'm not a hospital employee. And I also sat on the uh affordable, the affordable care act, the ACO board of directors for the hospital, for the independent physicians. And I only got on there because one of my partners got sick. He was on there, he was a very quiet guy. And he said, Oh, do you want to take this for me? And they said, sure, I could go on there. So they were sorry about that. Because I had always asked, I was like, Well, timeout. And I would bring things up. And one of the things they said is, if anybody knows a way we can get cheaper and better care, let us know. And there was an independent orthopedic group in town and they had their own ASC. And I said, Well, you know what? I said, You're not very good at orthopedic service line. This group's much better. I would just say, sub out the orthopedics to them. You're gonna save lots of money. It's gonna be better care. Everybody in the community knows that, and they're gonna have more faith in your system by doing that. It's the right thing to do.

SPEAKER_02 1:09:29

Right.

SPEAKER_01 1:09:29

The room just went silent. Right. Nobody, they just looked like, oh my God. You know, but there's a community member there who was with a, you know, a big employer. And that's why he said that. I was looking right at him because I knew he was taking it in. And I knew they were like, oh my God, you know, but you're right. I mean, and so I'm really glad you said that. I think that's so helpful, Heath.

SPEAKER_02 1:09:50

Use the medical staff. You know, that's I would really like to see physicians use that more. You, you, you're responsible. CMS gives you all these responsibilities and conditions of participation. If you've not read it, just Google conditions of participation, you can get it uh and and see it. But yeah, use the medical staff. It's it's there for a reason. You have to approve every single service line, every single physician. Um, if they're trying to there, I had I love nurse practitioners. I'm not, you know, I love physician assistants. I often get accused of you know being some homer for physicians. I just talk about physicians a lot because everything is incident to a physician, right? Uh, including hospital care. But um, you know, you control that if they're trying to replace you with AI or which is coming, robots, which is coming, uh, you know, uh the H1B problem. Um control your medical staff. You you are the medical staff, and you you can you are the brakes in that organization. CMS designed it that way. Uh most physicians just don't even know the conditions of participation exist, they don't even know where to look at them. Um, so they're there. Use them to your benefit.

SPEAKER_01 1:10:55

You know what? I think that's a great place to close. I love that because you're 100% right on that. And you know, that that's something that I think everybody needs to hear. So that's great. And, you know, he thank you so much for your advocacy for physicians because there's not that many people in healthcare I found who aren't physicians who are super knowledgeable. There's a lot of people, like you said, goobers and grifters. They're by the score. You talk to these guys, you're like, okay, they have no knowledge, nothing interesting to say. You're so knowledgeable about so many things and you're on the right side. You know, you're really helping us out. Really appreciate everything you did. You do. And I really hope that physicians listen and start working together and take the power that they have. Because it's going to help patients, because ultimately, when physicians thrive, patients thrive. That's the system. That's exactly right. 100%. Well, thank you so much. And thanks to all the listeners. If you make it this far, I really appreciate it. And thank you to Heath Voilemann. He is the best, the most knowledgeable man in healthcare. He's the real deal. And please like and follow for more. If you have any questions, please let me know. Drop them, drop them in the show notes and you know, let me know. And we'll see you soon next week. Thank you so much.