Hospital’s five-year fight to move shows health care isn’t free market

By David McElroy · May 22, 2013

We’ve been told over and over that problems with health care in this country prove that the free market has failed. But what if the medical industry is already so regulated that its problems have nothing to do with the free market?

There hasn’t been a free market in health care for a long time, certainly not in my lifetime. Probably not since sometime in the 19th century. An item in the local news this week is a stark reminder of that to me.

In 2008, Trinity Medical Center in Birmingham proposed relocating from an older part of town to a fast-growing area along U.S. 280, very close to affluent southern suburbs. A major hospital company (HealthSouth) had built a state-of-the-art building already, but the company was hit hard in an accounting scandal involving the company’s founder and former CEO. The company unloaded various properties around the country just to survive, including this hospital which was about 90 percent complete. (That’s the new building above, framed by a nice sunset I shot last year.)

Trinity is currently in an older part of Birmingham near downtown that’s declining. The hospital was founded as Baptist Medical Center-Montclair many decades ago, but the Baptist system sold that hospital to a private company a decade or more ago. Before too long, the new management was looking to relocate to a newer facility closer to a suburban population that didn’t have a hospital close by.

In the current location, the hospital competes with various huge hospitals downtown. Although most people don’t realize it, Birmingham is a major center for medical research and health care. The medical industry — clinical and research combined — is the biggest in the area by far.

After an aborted plan to move to the suburb of Irondale, Trinity decided that moving to the unused HealthSouth building was more economical and would provide access to a better market. There was only one problem.

In Alabama — as in every other state, as far as I know — a hospital needs what is called a “certificate of need” in order to operate. Whereas a restaurant or dry cleaner can just pack up and move to a new location (or expand) with nobody’s approval, a hospital or nursing home needs the approval of a state board to operate.

The State Health Planning and Development Agency has a Certificate of Need Review Board. These people have the power to decide who gets to operate a hospital or nursing home (and what types of services they can offer) in order to “protect” the interests of the public. The board is composed of three “consumers,” three representatives of the medical industry and three representatives of the governor, but the governor appoints all of them.

The Certificate of Need Board ended up approving Trinity’s application to move, but then we see how dedicated the other health providers in the area are to the free market. Brookwood Medical Center and St. Vincent’s Hospital both sued to stop the move. Here’s what the CEO of Brookwood said when the suit was announced:

“We’ve been the primary provider of services down the 280 corridor. We have been adding services and expanding our campus to address the needs of that population. This is not the right time, for many reasons, for a market share grab like this one to be permitted and for an unnecessary duplication of services to be added in that same corridor.”

In other words, “Those are our customers. How dare someone try to compete with us?”

This is the environment in which the medical industry has operated for many decades. Doctors were regulated starting more than a hundred years ago — for the public’s health and safety, of course — and then hospitals and other health facilities were tightly regulated. Who could possibly think it had anything to do with protecting market incumbents from competition?

Nobody was allowed to operate without state permission. Nobody was allowed to offer services without state permission. Nobody was allowed to build a bigger facility without state permission.

This is how things work in a socialist system. This is not a free market.

After five years of wrangling, Trinity has finally won permission this week — from the State Supreme Court — to make the move that it wanted to make five years ago. How can we expect a medical system that can quickly respond to market forces and serve its market if it’s forced to operate at the will of a slow-moving state, while its competitors work hard to prevent it from competing.

I’m certainly no fan of Trinity or of the details of this particular move. The city of Birmingham is kicking in $55 million in tax rebates over the next 20 years to subsidize the move. Since the hospital was already in the city limits and it still will be after the move, why are city taxpayers subsidizing the move? (Why would they even if it were a net gain to the city, anyway?) Who knows? Nobody seems to ask such questions.

There aren’t any good guys in the fight. Trinity comes the closest, but I figure if the tables were turned, they’d be fighting tooth and nail to prevent competition, too. This is simply the culture of the sick health care industry today. They’re creatures of the state. They expect protection from government and they generally get protection — in the name of “the public good,” of course. Why would they have any incentive to operate more efficiently or compete more effectively?

When you hear people tell you that our mess of a health care system means that the free market has failed, remember this tiny story of one hospital in a mid-sized market. And multiply it a million times to account for all the horror stories that prevent effective and free competition.

We don’t have a free market in health care. Government has created this mess — in many different ways — and it’s about to get even worse as ObamaCare kicks in. If you want a real solution, we need to dump the socialist “certificates of need” and attempts to avoid competition and vague mumblings about “the public good.”

Let the market do its job. And quit blaming government failures on a free market that doesn’t even exist.

Share on Social Networks

When I first heard about this, I thought it must be satire. When I discovered it was real, I was appalled, but I still thought it must be a one-time thing from some nutty activist. But it turns out it’s the latest bit of pandering to a bunch of far-left activists who believe that a man can become a woman if he decides to claim he’s a woman. As everybody knows, men have prostate glands. Women do not. Period. End of story. Men can get prostate cancer. Women cannot. But political activists are so eager to pretend that a man claiming to be a “trans woman” is really a woman that they are insisting that “women” be included in public health messages about the issue. This is nothing but political virtue-signaling. If you’re a man, you know which parts you have. You know that you ought to be screened. Nobody is made any safer by dragging far-left gender ideology into simple medical reality.

Every time someone tries to tighten requirements around the use of absentee ballots, I hear screams from Democrats and others on the political left that such efforts are nothing but “suppression of black voters.” These protests have never made sense to me, especially because it’s never been a secret that absentee ballot fraud goes on all the time in certain areas. (Everybody knew it when I worked in politics.) The people who engage in such fraud are rarely caught — often because the local political establishment approves of the crime — but a Democrat who won a primary election in Clay County, Alabama, last year has pleaded guilty to this sort of cheating. Terry Andrew Heflin was running for a place on the Clay County Commission. He was caught ordering seven absentee ballots in the names of various voters and sending them to his post office box — after which he used the ballots to vote absentee for himself seven time. Did he have other people cast additional fraudulent ballots? We’ll never know. But in a primary in which he was able to win with only 141 votes, it wouldn’t take many fraudulent votes to change the election. The next time you hear “civil rights activists” claim that it’s just “voter suppression” to hurt blacks which is at the root of efforts to stop this fraud, remember Terry Heflin. If you care about fair and honest elections, ballot security and voter identity should matter to you.

A state legislator in Maine has been stripped of the ability to speak in the state Legislature — and her votes are not being counted on legislative issues — all because she made a truthful social media post. Rep. Laurel Libby (R-Auburn, Maine) opposes allowing boys to compete against girls’ teams in school athletics and she’s become known for making an issue of it. On Feb. 17, she posted on Facebook about a recent example that she found outrageous. She posted side-by-side photos of a boy named John who competed last year in a state track event and won fifth place against other boys two years ago — and a photo of the same boy (now called Katie) who won first place in the same event this year against girls. Whether you find this outrageous or not, Libby is clearly being honest and truthful about the objective facts of an issue of public importance. But the state Legislature censured her. Democrats decreed that she could not speak in the House and that her votes would not count on legislation — until she apologized for the outrage of telling the truth. She refused and her constituents have been unrepresented in the state House since then. The people who promote this ideology are out of touch with reality and won’t rest until they force the rest of us to join them in this delusion. But even if you agree with “trans” ideology, you should be appalled at this heavy-handed attack on political speech.

The late Steve Jobs was at the center of our culture’s transition from analog to digital. He co-founded Apple Computer. He led the team that revolutionized personal computing with the first Macintosh. As CEO of Apple, he led the development of the iPhone and later the iPad. You would think the children of such a man would be surrounded by technology. But Jobs and his wife Laureen didn’t let their children use iPads. Their home had few screens of any kind. Even though Jobs spent most of his time developing and selling Macs and iPhones and iPads, he was home with his wife and children for dinner when he was in town. The family ate together at a simple wooden table in their kitchen — and there were no digital devices or focus on popular culture. Instead, he’s said to have guided his family toward deep discussions of art, philosophy and education — with no iPads to be found. If the man who guided the development of such products chose a different path for his own children, does that suggest that his digital experience taught him that children need human connection, not screens? And does it suggest the possibility that we might be better off if we made the same choice for our families?

For four years, Donald Trump’s supporters screamed that everything that went wrong was the fault of Joe Biden. They were sometimes right and they were sometimes delusional. (Anybody who knows me understands that I can’t stand Biden any more than I can stand Trump, just for different reasons.) But for two months, Trump has rampaged through U.S. political life — vandalizing pretty much everything in sight — and the vast majority of his supporters are silent at best. Many watch as he blows up the world economy and they make excuses for him. They’re in absolute denial, even about things that Trump is doing very intentionally. Anybody who understands economics and history knows that tariffs are a terrible idea from a pragmatic point of view. Anybody who values individual freedom knows that tariffs are massive taxes on individuals — and they’re a tool of political control over the ability of people to trade freely. Trump is the antithesis of everything which political conservatives stood for just a few years ago. It’s far past time for people who claim to be conservatives to reclaim the principles and values which they used to claim — and stop this mad man before he can accelerate the day when we experience economic and social collapse. Open your eyes to reality and reject this lying narcissist.

Related Posts