What is an Open Market?

An open market is where a customer has the freedom to select his vendors, and the vendor has the freedom to set his prices. The prices are set based on the quality of products & services, driven up and down by the supply & demand in the market, and the customer is the final decision maker. It is the supply and demand equation that controls an open market, and keeps it in a dynamic equilibrium. Unfortunately, the healthcare (HC) industry in the U.S. is neither an open market, nor a government owned and operated organization. The independent medical practices, mostly owned by 1 to 20 physicians, are small business entities, but they don’t have the freedom to set their own prices for the services they provide to the patients. Their prices are primarily controlled by the government agencies (Medicare and Medicaid) and other large commercial insurance companies… not by the supply & demand in the healthcare market. The two basic flaws in the U.S. healthcare system are: a) Every physician gets paid the same amount irrespective of his skills & experience levels. b) Year after year, all physicians get paid less and less. In other words, physicians are the only group of professionals who get a negative pay raise every year. This trend is set by Medicare, and subsequently followed by commercial insurance companies. Similarly, the patients in the U.S. neither have the freedom, nor availability of information about the physicians’ skills & experience levels to make a sound selection decision. The insurance companies simply provide the name, address and phone number of the participating physicians in their network. Reading the list of physicians, all appear the same to the patient. Patient does not know which physician is more qualified, or which one has more experience. And if the patient goes to a physician outside the insurance company network, he has to pay a heavy penalty.

Without an Open Market U.S. Healthcare System will collapse!

If the current unbalanced economic model of the U.S. healthcare industry continues, the system will collapse within 10 to 15 years. With the exception of few specialties (which are not fully controlled by the insurance companies), the net income (after paying malpractice insurance premiums and overhead expenses) of most physicians has already dropped to a level where physicians have stopped recommending their own children to choose medical profession as a career. Most students in colleges are unable to justify becoming a physician when they compute the ROI (Return on Investment) in terms of cost, education & training time spent in college & residency, and a life-style full of legal threats and night-calls. As the Medicare and commercial insurance payment-cuts (to physicians for their services) continue, the enrollment in medical colleges will continue to drop. This would cause a continuous shortage of physicians in the U.S. The rural areas in some states (where there is no cap on malpractice lawsuits) are already experiencing the shortage. Currently, some of the practicing physicians have reached such a high level of frustration with present HC system that they are closing their practices, and taking up more stable professions. Since the HC industry is not an open market, and prices are controlled by Medicare and commercial insurance companies, the high demand of physicians would not translate into a price increase for their services. This cycle will continue to spiral… increasing the shortage of physicians every year. And within 10 to 15 years the U.S. healthcare system will collapse. One of the primary goals of the P2P network is to transform the U.S. healthcare system into an open market and prevent its collapse. This can be accomplished only when the physicians and patients join forces and liberate the healthcare industry.