Not content to wait for directions from above, Dr. Kevin Smith and Dr. Steve Lantier started a surgery center based on the simple idea of price honesty.
The Surgery Center of Oklahoma posts their prices online, and they are much lower than typical hospitals.
According to Dr. Smith, “What we’ve discovered is health care really doesn’t cost that much. What people are being charged, is another matter altogether.”
When they first started advertising their prices online, Dr. Smith thought they were about half the price of hospitals.
Dr. Lantier said, “I can’t believe the average person can afford health care at these prices.”
The truth is, the average person can’t.
But why not?
The healthcare industry has been woefully uncompetitive for decades, that plus the addition of insurance, overregulation, and government subsidies have served to disguise the actual price of healthcare – and people don’t care about things they can’t see.
The Surgery Center of Oklahoma set out to change this. Their goal was to start a price war and they did.
It didn’t take long for people to catch on.
Matt Gang from California tore his patella tendon playing basketball. Surgery in California was about $30,000 – and Gang was uninsured.
But surgery in Oklahoma was less than one-fifth the price. After making the trip for a successful surgery Gang said, “It was well worth it.”
At a savings of $24,000, indeed it was.
Similar savings can be found across a plethora of procedures.
According to the Hospital Association, about half of Oklahoma’s hospitals are losing money. But not the Surgery Center of Oklahoma.
For one, they do not accept Medicaid or Medicare. Dr. Smith said Medicare regulation would not allow for their online price menu.
By rigorously avoiding regulators and bureaucracy, they shield their efforts from paperwork and the staff needed to ensure compliance, and maintain a singular focus on what they do best: surgery.
But it isn’t only patients at the Surgery Center that are saving. In an effort to keep up, prices are dropping at some other medical facilities—even outside Oklahoma.
According to Dr. Smith, “Hospitals are having to match our prices because patients are printing their prices and holding that in one hand and holding a ticket to Oklahoma City in the other hand and asking that hospital to step up.
So we’re actually causing a deflationary effect on pricing all over the United States.”
As patients demand price-matching, some hospitals relent.
But not everyone is enamored of this success story. In regards to transparent pricing, Integris Baptist Hospital responded:
“Instead of offering a generic price list for medical procedures we work individually with patients to determine their financial responsibility. Through our Consumer Price Line patients can obtain charge information in advance on a variety of procedures and services offered at any INTEGRIS Health facility throughout the state of Oklahoma. This is done on a case-by-case basis taking into account insurance payments and self-pay discounts. Financial counselors are also available to help patients who may need to make payment arrangements or obtain other financial assistance to meet their obligations.”
Or in other words, “First we figure out how much we can get out of you, then we set the price.”
It shouldn’t be surprising that Oklahoma is leading the way in this regard – it is the Sooner State after all.
And now it’s cheaper and better too.
Related Story: Adventures in Healthcare
