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Oklahoma Surgery Center: affordability and transparency

I write a lot about the direct primary care model (see here, here, and here) – one that accepts no insurance, charges a monthly fee, and where physciains can spend all of their time caring for patients. Typically these practices focus on primary care. However, the Surgery Center of Oklahoma has taken this model one step further and provides a vast array of procedures and accepts no insurance. A recent Yahoo Finance article looks at the two doctors who broke away from the traditional models of medicine to provide patients much more affordable surgeries with upfront, transparent prices:

In a country where citizens resort to crowdfunding to pay for their medical bills and politicians can’t agree on the right kind of health care system, a pair of doctors decided that enough was enough.

“We both started despising what was going on financially with the patients, cause when you look at the bankruptcy statistics — medical bankruptcies for patients now — it’s egregious,” Dr. Steven Lantier told Yahoo Finance (video above). “The average American cannot afford health care today, so we believe the system is broken.”

Lantier and Dr. Keith Smith, both anesthesiologists, partnered up in 1997 to establish the Surgery Center of Oklahoma. Their organization does not accept insurance and instead promotes price transparency, which involves listing prices of various operations on its website.

Smith and Lantier were inspired to reduce those costs.

“It’s the strangest thing — patients prefer to receive high quality care and not be bankrupted,” Smith said sarcastically. “It sounds radical to say, ‘Here’s what we do and here’s how much it is.’ The mainstream in health care is completely unplugged from the actual cost of the care.”

“Different hospitals and providers charge different amounts for the same service,” Ron E. Peck, senior vice president and general counsel for the Phia Group, told Yahoo Finance. “And even the same provider charges different amounts for the same service, depending on who the payer is, the plan, the insurance, whatever. And that’s before the discount is applied.”

Unlike when a patient uses traditional insurance and finds out about the price of surgery following the procedure, the Surgery Center of Oklahoma offers transparent upfront prices for every one of their services which includes the price of the surgeon, facility, and any other costs. You can see the prices for the services they offer here.

Later in the article, the surgeons who started the Oklahoma Surgery Center offer their theory on why health care in America has become so dysfunctional:

Smith blamed the federal government for the nation’s healthcare woes.

“The reason the system is broken is that anything the government gets their hands on doesn’t work,” Smith said. “The disaster of the U.S. health care system is the handiwork of Uncle Sam.”

In order to alleviate the issues over health care costs, some politicians have proposed their own solutions. One proposal is “Medicare for all,” notably supported by presidential candidate Sen. Bernie Sanders (I-VT).

Through Sanders’ Medicare for All, Americans would receive universal health coverage — although it would require at least $3 trillion a year in new government revenue.

Even then, Smith doesn’t see a government response as the right answer.

“Medical service delivery is such an important part of our lives that it shouldn’t be trusted to systems that we know are failed,” Smith said. “It certainly shouldn’t be entrusted to the most corrupt invention of mankind, and that’s government. The only way, really, to ethically and rationally render medical services with high quality and a reasonable price is the free market system.”

At the end of the day, when it comes to this version of direct primary care, Smith argued that “it really is a lesson into how capitalism — for all the bruises that name and reputation has received — is truly the only ethical way to deliver services, particularly medical services.”

It’s encouraging to see the market offering more affordable ways for patients to receive health care. The dominance of third-party payers in health care often inflates the cost of providing care. When we discuss the problems in the health care system, there are those who look for ways to help people gain coverage to help pay for inflated health care prices that are the result of third-party payers. The question should be ‘how can we make coverage more affordable?’ The Surgery Center of Oklahoma shows how taking the middleman out of paying for care provides more affordable, high-quality options for patients.

 

CORRECTION: An earlier version of this blog post included a paragraph which indicated that the Oklahoma Surgery Center is part of a larger healthcare group named The Phia Group. This is not correct and has been removed from the post. 

Jordan Roberts / Health Policy Analyst

Jordan joined the Locke Foundation in the summer of 2018 as Health Care Policy Analyst. He analyzes state and national health policy issues with an eye toward removing governm...

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