Systems inflate their prices for many reasons. Some insurance companies pay
more than others for hospital systems’ services. Hospital systems do not know
what the consumer’s insurance would pay when consumers come into the hospital
so they register the highest prices on the consumer’s bill.
systems try to charge as much as they can to collect as much as possible. The
pricing is not based on reality.
Surgery Center of Oklahoma started posting their prices online
about four years ago.
The prices for procedures are
all-inclusive quotes and are guaranteed.
The result was to start a local price war.
The Surgery Center of Oklahoma is disruptive to the hospital pricing in its
community. This disruptive pricing is spreading across the nation. Consumers from
all over have come to the Surgery Center of Oklahoma because the price is
transparent and reasonable compared to hospital systems in their local area. One
specific example is.
“Matthew Gang, 22, tore his patella tendon, dislocating his
knee-cap playing basketball earlier this year.”
Mr. Gang is uninsured. He lives in California.
Surgery in his California community was going to cost him about $30,000.
The Surgery Center of Oklahoma Internet
price was $5,700.
Matthew and his father Tom Gang flew from
California to Oklahoma for surgery.
“It was well worth it,” Tom Gang said. “I need a rotator cuff
surgery right now. I’m thinking about flying out there and having my surgery
because it was such a positive experience for us.”
Other Oklahoma medical and surgical
facilities have started joining Surgery Center of Oklahoma in posting prices
and becoming price transparent. Hospital systems are realizing they will have
to compete with low price transparent prices to attract patients.
Surgery Center of Oklahoma does accept
private insurance, but the Center does not accept Medicaid or Medicare.
“They have avoided government regulation and control in that area
by choosing not to accept Medicaid or Medicare payments”.
The difference in billed prices are
staggering between Mercy Hospital in OKC, Intergris Baptist Medical Center and
OU Medical Center vs. Surgery Center of Oklahoma. The prices are,
Mercy Hospital charged $16, 244 for a breast biopsy; the procedure
will cost $3,500 at Surgery Center of Oklahoma.
OU Medical Center billed $20,456 for the open repair of a
fracture; the procedure will cost $4,855 at Surgery Center of Oklahoma.
OU Medical Center billed $21,556 for a gall bladder removal
surgery; the procedure will cost $5,865 at Surgery Center of Oklahoma.
OU Medical Center billed $23,934 for an ankle arthroscopy; the
procedure will cost $3,740 at Surgery Center of Oklahoma.
Integris Baptist billed $37,174 for a hysterectomy; the surgery
costs $8,000 at Surgery Center of Oklahoma.
However, prices may be dropping elsewhere because of the
transparency at Surgery Center of Oklahoma.”
than crying about the issue of the lack of price transparency as Dr. Uwe
Reinhardt did in my last post, someone is actually doing something about it. It
is causing hospital systems and large clinics to lower prices and make them
As patients are starting to demand price
matching, some hospitals are giving in.
“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,” Dr. Smith
said. “So we’re actually causing a deflationary effect on pricing all over the
Physicians are waking up and realizing
they are not the main cause of escalating costs. The Surgery Center of Oklahoma
is a wonderful example of a price transparent organization that is doing
something to force price competition.
It is clear. The government is not going
to create price transparency.
Physicians and patients must drive the adoption of a free market
Consumers must drive price transparency.
The opinions expressed in the blog “Repairing The Healthcare System” are, mine and mine alone