Let free market save health care

Government always seems to think it best knows how to run the lives of its citizens, but the marketplace consistently comes up with more efficient, less expensive responses to our needs than our elected and appointed officials. So it’s no surprise that in the realm of health care, against the backdrop of the junkyard blaze that is ObamaCare, some free-market thinking has proved extremely successful.

For anyone who has ever had a surgical procedure, the fear of the unknown can be great — not just with the outcome, but with the final bill. That figure is often a whopper, even for those who have good insurance plans, thanks to layers of billable areas — the surgeon, the anesthesiologist, the facility itself and more. Patients have been looking for other options for quite some time, before even considering what the Patient Protection and Affordable Care Act might do to such costs or the availability of many procedures.

In Oklahoma City, one forward-thinking medical operation got itself well ahead of the curve with an approach that begs to be copied in Southern Nevada and elsewhere. The Surgery Center of Oklahoma posts online the all-inclusive final cost for most of its procedures (www.surgerycenterok.com/pricing), which can be up to 90 percent less than the charges of typical hospitals.

This center doesn’t offer just a few minor surgeries; there are specialists in 23 types of surgery, and 158 procedures are priced online. Dr. Keith Smith, the center’s founder, said about 150 additional procedures are available for a flat fee.

The catch: To get that price, the entire amount must be paid in advance by the patient.

That might sound unappealing, but business at the 15-year-old center has boomed since the creation of this program four years ago. By not dealing with insurance, the center’s cost savings are so significant — it doesn’t need staff to handle all the reimbursement issues — that patients are flocking to the Surgery Center of Oklahoma. Dr. Smith noted that 20 percent of his patients are what he terms “medical tourists,” coming from all 50 states and Canada, and he’s even seen patients from Great Britain, Turkey, Nigeria and Ethiopia.

The typical client is one who either has no insurance and needs a cost guarantee or one who has a high deductible on insurance, to the point that it’s less expensive — often far less expensive — to pay out of pocket and skip insurance altogether. But the savings can be significant, even for a patient on a typical insurance plan — say a $500 deductible and a 20 percent out-of-pocket requirement. A procedure that totals $40,000 at a hospital would result in patient expenses of about $8,000. Dr. Smith said it’s not unusual for his total fee to range from $4,000 to $5,000 for the same procedure. Because of that, he said many businesses with self-funded insurance pay for an employee’s airfare to Oklahoma City, lodging and surgery, and even allow a relative to accompany the patient on the trip — meaning zero cost to the employee. All those expenses combined are far cheaper than having insurance process a claim and cough up the balance after the deductible and out-of-pocket expenses are met.

Better still, the center is creating competition nationwide, with patients waving that pricing “under the noses of hospital administrators in their cities and saying, ‘Match it, or we’re out of here,’” Dr. Smith said. “People are leveraging better deals in their town using our pricing. That still boggles my mind.”

The business model lays bare just how expensive and time-consuming it is for physicians and medical centers to deal with insurance companies. “It’s such a crazy game. We don’t want any part of it,” Dr. Smith said, noting that patients are free to seek insurance reimbursement on their own. “We just say, ‘Here’s what we do and what we charge for it.’ Hospitals and big insurance carriers make a lot of money the way the system is now. What we’re doing is very disruptive to the big players.”

In Southern Nevada, Dr. Kevin Petersen has found great success with a similar model at his No Insurance Surgery Center, which deals primarily with hernia and gall bladder procedures. As the business name says, Dr. Petersen doesn’t deal with insurance at all, including Medicare or Medicaid.

“To do this properly, you have to give up (taking) insurance. Insurance takes over your practice, because it’s so inefficient,” Dr. Petersen said. Although he doesn’t post his prices online, Dr. Petersen offers a guaranteed flat rate via phone consultation that is all-inclusive and far cheaper than fee-laden hospital pricing. Dr. Petersen, in business for 27 years, said he has used this model for eight years and that business is better than ever in all aspects — finances, patient satisfaction, and his own well-being. He no longer jams in appointments with dozens of patients a day to make a living.

This is the kind of health care reform America needs: a free-market policy, with pricing transparency that creates competition, drives down costs and boosts quality. If health care is really about the patient, the federal government certainly could learn a thing or two from these innovative doctors.