As hospital consolidations sweep the nation, the monopolies being created are having a profound impact on life in small town America. Lee County, in Southern Georgia, is a little place with big dreams; they are resolutely determined to build a 60-bed community hospital and provide local residents with real choices. For years, two competing hospitals served the population of 200,000 spread over six counties: Phoebe-Putney and Palmyra Park. Phoebe-Putney Memorial Hospital put an end to that by securing a 939-bed hospital monopoly and an ample market share.
Their efforts began in 2003, when Phoebe-Putney Memorial Hospital in Albany, Georgia successfully opposed a bid for a Certificate of Need (CON) to open an outpatient surgery center. Frustrated from a free-market perspective, accountant Charles Rehberg and a local surgeon, John Bagnato, began sending anonymous faxes to local business and political leaders, criticizing the financial activities of the local hospital. These faxes quickly gained notoriety, becoming known as “Phoebe Factoids.” Concerned about negative publicity, Phoebe Putney executives hired former FBI agents to intimidate these men.
In biology, it is clear that access to more genes leads to greater overall health. This is true because it allows for a greater likelihood that a genetic defect can be compensated by a gene from a different pool. This is the reason that inbreeding leads to more genetic diseases. This same phenomenon exists in social science. Complex social networks are healthier than more narrow (constrained) ones. Dr. Amar Dhand of the Brigham and Women’s Hospital’s Department of Neurology has, for example, shown that people are more likely to get to the emergency room in time to receive a clot busting therapy for stroke if they are part of a more complex, rather than constrained, social network.
A study published recently in JAMA Internal Medicine showed financial rewards and connected pill bottles don’t work. One explanation suggests that “other patient concerns about potential adverse effects of these medications, such as impotence or fatigue, were not targeted by this engagement strategy.”
Eventually, the share of the American economy absorbed by healthcare will stop rising. The question is when, and how much more collective damage will be inflicted in the process. As it turns out, there is a solution under our noses that is nearly ubiquitous in business, personal finance, and government programs worldwide. It can be used to bring manageable, relatively predictable transformation, rather than sudden wrenching change. It is a called a “budget.” It is well past time to embrace the discipline of budgets in healthcare financing.
There is an old Vulcan proverb saying that only Nixon could go to China. Only a man who used to work for Joseph McCarthy could set America on a path to better relations with a virulently Communist country. A few years after Nixon went to China, Menachem Begin, the Israeli Prime Minister who represented people believing that the state of Israel should start at the Nile and end at the Euphrates, gave Egypt back all the lands conquered in a recent war and made a lasting peace with Israel’s largest enemy. They said back then that only Begin could make peace with the Arabs.


