Refreshing? Surgical center posts all prices, takes no insurance, charges 90% less.

[samclem]

An article (with video link) on a 40-doctor surgical center in OK City. All prices are posted right up front (and online). They take no government money or insurance. Most services cost less that what the Medicaid rate would have allowed, and they are generally 10-16% of what a similar procedure would cost if billed to insurance.

Some snippets:

Twenty years ago, after decades of witnessing firsthand a dysfunctional health care system that “is bankrupting the country,” Dr. Keith Smith envisioned a self-sustaining, free market oriented health care facility that would operate completely outside the bounds of government control.
After selling the idea to a few physicians in the Oklahoma City area, Smith co-founded the Surgery Center of Oklahoma, a 32,535 square foot, state-of-the-art multi-specialty facility, owned and operated by approximately 40 of the top surgeons and anesthesiologists in the area.

Smith calculated the market prices for the center’s procedures by adding up the cost of labor and materials. His prices are actually less than what Medicaid, the government health care program for low-income Americans, pays.
“We are perfectly happy to charge less than the amount these hospitals claim is bankrupting them. And we are making money,” Smith told TheDCNF.
The surgery center does not accept insurance in any form. “Individuals pay us up front and in full. If it’s a beneficiary of a self-funded plan, we just charge the plan,” Smith said. “We work with all cost sharing ministries, also.”

“The largest part of the industry is dominated by the corporate hospitals, and they don’t want any part of free markets or transparent prices because the veil would be pulled back,” Smith told TheDCNF. Large corporate hospitals have a “hit and run mentality of billing,” that has become “very successful subscribing to the idea of what can I get away with,” Smith said. If consumers could shop around for the best price, as they can in virtually any other aspect of the economy, hospitals “would not be able to successfully price gouge anyone.”

Hmmm. High quality medical care at transparent rates lower than Medicaid's could be a gamechanger if combined with HSAs and true catastrophic insurance coverage.
​

 

[Bamaman]

There are many surgeon owned outpatient surgery centers. And they usually charge just like a hospital.

My hats off to these gentlemen in OK City.

 

[razztazz]

High quality medical care

How would anybody know? "High Quality" in america is a marketing term. I don't want to question their motives at this point but I would be suspicious (cynical) of what might be behind the green door.

To wit: Surgery especially but any medical care in general, even if "Medicaid cheap" is still going to be too expensive for most people. Especially if it's something you'll be needed several iterations of in a short period or if it's a single big honkus deal like a kidney transplant. Their system might settle nose jobs and appendectomies but not teh big stuff.

Also, few will be able to fund these things upfront. Like most people's houses. They can afford it for cash. But not right NOW! So you have to get the loan. Maybe you can afford their surgery for cash but few will have that kind of bread on the barrel head

I doubt that many people in OK have the kind of money to keep that many dr's in the green with high incomes.

And it was the free market nature of things that caused the need for insurance etc etc. if medicine was something that could have been procured by the poorest of the poor even people with no money who couldn't work there would have been no discussion of insurance or gov involvement. And insurance is a free market component that the marketplace caused into existence. Even the marketplace has its limitations. Shopping around for medical stuff has so many limitations it's been cussed and discussed right here a jillion times and in fact is one reason why it has such a hard time operating within a free market frame

Their "No money=die" is hardly Smith's idea of the marketplace's raison d'etre

I get real suspicious (cynical) of anybody who starts hawking "free market". It's often some rube goldberg apparatus designed for getting away with something

 

[samclem]

With our present "affordable" insurance, people need to pay high insurance premiums (to cover the inflated cost of "somebody else is paying" billing by providers) and they have to meet deductibles (frequently $8k-$10K per year or more.) A single surgical procedure at the inflated "regular-bill-it-to-insurance" rate might be $20K, so our patient is out his entire $10K deductible (and other people, through their insurance premiums, get to pay the remaining $10k). OTOH, this clinic is billing patients $3200 for the same thing. And they are making money. Patients are very happy to pay these prices (less than their deductible in many cases), and it provides the opportunity to relegate insurance to its proper role: covering catastrophes.

If somebody wants to defend our present way of doing business, they'll have a full time job (and end up as a laughingstock).

 

[pb4uski]

I wonder if you used their services and paid cash if you could then try to get reimbursed by your health insurer.

 

[samclem]

I wonder if you used their services and paid cash if you could then try to get reimbursed by your health insurer.

I would think they wouldn't pay, but it would be in their long-term best interest if they allowed you to count it toward your deductible (after all--you got medical care that they didn't have to pay for). Once the deductible is met, they would be wise (long term) if they re-imbursed a considerable part of the cost provided it was less than they would have spent. But there needs to be a continued incentive for people to continue to shop for the best value (to keep downward pressure on prices), and if insurance will pay 100% of the bill, that goes away.

An insurance company that handled things this way, paying about 80% less than their competitor insurance companies for medical services, would be at a big advantage. And when several started doing it, maybe across state lines, we'd have the potential for some real competition and drastically lower rates for both insurance and medical services.

It ain't a golden bullet, but it can be an important part of the answer.

Medical services that are generally not covered by insurance (most cosmetic surgery, much LASIK surgery, etc ) has not seen the price escalation that is present throughout the rest of the "insurance mediated" healthcare system. Quality keeps going up, and prices have stayed fairly moderate (compared to medical care covered by insurance). There's a reason for that.

 

[Sunset]

I hope they are successful for a long time, after all, about 30% of the insurance cost is for expense and profit of the insurance company. The CEO has to make a living after all

 

[samclem]

I hope they are successful for a long time, after all, about 30% of the insurance cost is for expense and profit of the insurance company. The CEO has to make a living after all

It looks like insurance costs (CEO pay, profit, etc) in total was about 7% of what we spend on healthcare, at least as of 2013.

Health insurance does increase the cost of our healthcare, but it's not primarily because they take a big part of the pie. It's because insurance increases the cost of the healthcare services that they buy. The user of the service is effectively insulated from the cost of the service (which is why we buy insurance in the first place), and there's no effective mechanism in our present "system" to put downward pressure on the prices of medical services.
The cost of services is the root problem, and it makes medical insurance expensive.

 

[Starsky]

Necessity is the mother of invention.

Ironically the number of uninsured is down a whopping 26% in Oklahoma under the ACA.

 

[skipro33]

Necessity is the mother of invention.

Ironically the number of uninsured is down a whopping 26% in Oklahoma under the ACA.

But what was the total uninsured before ACA? Somewhere around 10% I believe. So a 26% drop of 10% is 2.6%. All ACA did was get 2.6% more people on medical insurance than without ACA. The huge rate increases blamed on ACA sure isn't worth that paltry gain in people covered.

 

[rrppve]

But what was the total uninsured before ACA? Somewhere around 10% I believe. So a 26% drop of 10% is 2.6%. All ACA did was get 2.6% more people on medical insurance than without ACA. The huge rate increases blamed on ACA sure isn't worth that paltry gain in people covered.

The rate increases were on policies bought through the marketplace. Employer based insurance has not seen the same rate increases. In fact, ACA has reduced the rate of health care inflation and non-marketplace health insurance inflation.

 

[DrRoy]

I wonder if you used their services and paid cash if you could then try to get reimbursed by your health insurer.

I think you would get coverage, but at out of network rates. Their lower cost is likely due directly to savings from not having to deal with the expense and delay of getting reimbursed by the insurance companies.

 

[bmcgonig]

I'm wondering how low their prices really are. I took a look and tried to find a procedure that I could compare. The last surgery I had was an appendectomy but they don't do those. So I had to settle for something easy to compare.. circumcision... Yikes. Anyway they charge $2000. Then I googled around to find it for $1400 in Houston. And €750 in Ireland (since I'm there now that's what Google presented me with . So not the cheapest but it is nice to be able to compare.

 

[pb4uski]

By statute a health insurer must pay at least 80% of premiums in claims and claim administration so that leaves at MOST 20% to cover overhead, taxes and profit, so Sunset's claim of 30℅ is incorrect.

 

[skipro33]

The rate increases were on policies bought through the marketplace. Employer based insurance has not seen the same rate increases. In fact, ACA has reduced the rate of health care inflation and non-marketplace health insurance inflation.

I would argue that employer based insurance has seen at least the same rate increases. Most employees don't see it until the employer passes it along, usually in a contract negotiation. Also, most employers negotiate a multi year medical coverage with in insurer for their employees. When that expires, any increases will catch up at that time.
Think about it; if what you suggested was true and remained true for the future, the gap between group rates and individual rates would continue to expand and it doesn't. There's a discount for being with a group rate plan, but it's not going to continue to widen.

I also would argue that ACA has not reduced the rate of health care inflation. Rates have sky rocketed in some areas. It's all over the news. Some states not as bad as others, but it's been remarkable or there wouldn't be any argument to replace it.

 

[razztazz]

I also would argue that ACA has not reduced the rate of health care inflation. Rates have sky rocketed in some areas.

That's a free market decision not a government effect. They chose to raise prices because they have something to hide behind. Have cake/eat same. Anybody who doesn't know business operates that way is..... well...unknowlegeable . Yes. Like it's always only just ONE thing. That's the ticket.

 

[Texas Proud]

How would anybody know? "High Quality" in america is a marketing term. I don't want to question their motives at this point but I would be suspicious (cynical) of what might be behind the green door.

To wit: Surgery especially but any medical care in general, even if "Medicaid cheap" is still going to be too expensive for most people. Especially if it's something you'll be needed several iterations of in a short period or if it's a single big honkus deal like a kidney transplant. Their system might settle nose jobs and appendectomies but not teh big stuff.

Also, few will be able to fund these things upfront. Like most people's houses. They can afford it for cash. But not right NOW! So you have to get the loan. Maybe you can afford their surgery for cash but few will have that kind of bread on the barrel head

I doubt that many people in OK have the kind of money to keep that many dr's in the green with high incomes.

And it was the free market nature of things that caused the need for insurance etc etc. if medicine was something that could have been procured by the poorest of the poor even people with no money who couldn't work there would have been no discussion of insurance or gov involvement. And insurance is a free market component that the marketplace caused into existence. Even the marketplace has its limitations. Shopping around for medical stuff has so many limitations it's been cussed and discussed right here a jillion times and in fact is one reason why it has such a hard time operating within a free market frame

Their "No money=die" is hardly Smith's idea of the marketplace's raison d'etre

I get real suspicious (cynical) of anybody who starts hawking "free market". It's often some rube goldberg apparatus designed for getting away with something

I will vote that you are cynical.....

These people seem to be doing something that others should be doing and you seem to be dissing them... I applaud them.... I wish every medical facility would publish their rates so I can compare... and then get some stats on outcomes... that way we can compare cost/benefits... which we CANNOT do right now...

Heck, it is almost impossible to get good info on a doc to see if they are good or not...

 

[Starsky]

But what was the total uninsured before ACA? Somewhere around 10% I believe. So a 26% drop of 10% is 2.6%. All ACA did was get 2.6% more people on medical insurance than without ACA. The huge rate increases blamed on ACA sure isn't worth that paltry gain in people covered.

The uninsured rate in OK was actually 15% including 27% of hispanics and 25% of African Americans. I'd bet it was a big deal for those people. I know it was for me. And my rates didn't change a penny this year.

 

[Starsky]

I will vote that you are cynical.....

These people seem to be doing something that others should be doing and you seem to be dissing them... I applaud them.... I wish every medical facility would publish their rates so I can compare... and then get some stats on outcomes... that way we can compare cost/benefits... which we CANNOT do right now...

Heck, it is almost impossible to get good info on a doc to see if they are good or not...

I agree with Razz. This is a marketing ploy and not a genuine solution to the problem of health care costs. Most people can't and don't shop around for medical care - unless it's elective surgery and not covered by insurance anyway. It's a clever way to get people's attention, but it would be hard to plan my ER visits around their schedule and location.

It's also a political statement:

Dr. Keith Smith envisioned a self-sustaining, free market oriented health care facility that would operate completely outside the bounds of government control.

 

[Just_Steve]

I wonder if you used their services and paid cash if you could then try to get reimbursed by your health insurer.

I would think they would pay just like out of network. Whats the difference?

 

[razztazz]

I would think they would pay just like out of network. Whats the difference?

The diff is if the insurance company isn't in on it on the front end they can deny anything and everything so as not to have to pay. "Hey, you tell us you were going to the doctor?" Especially if something goes wrong. $20,000 surgery for $10,000. OK. But due to some complication, bad drug reaction, infection etc, now it's way up there. They're not going to pay.

 

[samclem]

These people seem to be doing something that others should be doing and you seem to be dissing them... I applaud them.... I wish every medical facility would publish their rates so I can compare... and then get some stats on outcomes... that way we can compare cost/benefits... which we CANNOT do right now...

Heck, it is almost impossible to get good info on a doc to see if they are good or not...

Agree. If this model becomes popular (basic GP exams, chronic situations like dialysis, etc) it will put some significant downward pressure on health costs, and possibly insurance rates. If the mandate to buy insurance goes away, and people have a good choice of healthcare services priced at 15% of the present (wildly inflated) rate, and they get a tax break for funding their HSAs, many people would definitely choose to self-fund their first $5K of care and then buy a policy to cover a health cost disaster (cancer diagnosis, kidney transplant, etc). That policy would need to count the money they spent buying services independently (on the free market) toward their deductible, and the insurers would need to have fraud control measures in place. If that "disaster" care is provided at similarly competitive costs, the catastrophic health insurance policy also won't be terribly expensive.

People with a common Marketplace Silver plan are already "self-funding" the first $8K-$10K of care, but they are paying high costs for the medical care received. How great would it be to get 5 times as much health care for those dollars? Is anybody willing to argue that our present healthcare providers, in general, give good value for the money charged? Anybody had an $80 Tylenol while in the hospital?

 

[rrppve]

I would argue that employer based insurance has seen at least the same rate increases. Most employees don't see it until the employer passes it along, usually in a contract negotiation. Also, most employers negotiate a multi year medical coverage with in insurer for their employees. When that expires, any increases will catch up at that time.
Think about it; if what you suggested was true and remained true for the future, the gap between group rates and individual rates would continue to expand and it doesn't. There's a discount for being with a group rate plan, but it's not going to continue to widen.

I also would argue that ACA has not reduced the rate of health care inflation. Rates have sky rocketed in some areas. It's all over the news. Some states not as bad as others, but it's been remarkable or there wouldn't be any argument to replace it.

You're free to argue this, but the facts don't support it. Different risk pools for exchange insurance and employer group insurance leads to the different trajectory of rates. Well documented that the health care inflation rate has decreased since ACA was implemented, albeit it is still higher than overall inflation.

 

[DEC-1982]

I think it's refreshing to have any medical center post these costs clearly, regardless of whether it's cheap or costly. Transparency - how refreshing.

We are having to pay for some surgery out of pocket. I called the doctor's office and asked for an estimate of the total cost. It took 2 weeks for them to research everything and provide the cost estimate. It included the surgeon's cost, surgery center cost, anaesthesia cost and pathology cost. What I didn't get in that first estimate was the initial consultation cost, pre-op visit cost, post-op visit cost. I don't know what else we didn't get till we go through this. It's almost like peeling an onion, so many hidden layers that they don't want to share with you up front.

The interesting thing is even the doctor's office could not get the pathology cost easily.

 

[athena53]

I think it's refreshing to have any medical center post these costs clearly, regardless of whether it's cheap or costly. Transparency - how refreshing.

We are having to pay for some surgery out of pocket. I called the doctor's office and asked for an estimate of the total cost. It took 2 weeks for them to research everything and provide the cost estimate. It included the surgeon's cost, surgery center cost, anaesthesia cost and pathology cost. What I didn't get in that first estimate was the initial consultation cost, pre-op visit cost, post-op visit cost. I don't know what else we didn't get till we go through this. It's almost like peeling an onion, so many hidden layers that they don't want to share with you up front.

The interesting thing is even the doctor's office could not get the pathology cost easily.

I agree- and there are some people with high-deductible plans who need non-emergency surgery (but still of a nature covered by insurance) and will shop around. Last time I had a colonoscopy I didn't go to the one who did the last two because they couldn't tell me what the hospital would charge and I figured the hospital would be a bureaucratic brick wall. So, I went to a doc in a freestanding facility who was recommended by my primary doc and was able to get an "all-in" cost. Real pain, though- you need to ASK about extras for anaesthetic, lab fees, etc. (We'd thought mine wouldn't be covered as preventative due to previous findings, and then the insurance company paid it all. Go figure.)

Any transparency is good.