Oklahoma City hospital posts surgery prices online; creates bidding war
OKLAHOMA CITY – An Oklahoma City surgery center is offering a new kind of price transparency, posting guaranteed all-inclusive surgery prices online. The move is revolutionizing medical billing in Oklahoma and around the world.
Dr. Keith Smith and Dr. Steven Lantier launched Surgery Center of Oklahoma 15 years ago, founded on the simple principle of price honesty.
“What we’ve discovered is health care really doesn’t cost that much,” Dr. Smith said. “What people are being charged for is another matter altogether.”
Surgery Center of Oklahoma started posting their prices online about four years ago.
The prices are all-inclusive quotes and they are guaranteed.
“When we first started we thought we were about half the price of the hospitals,” Dr. Lantier remembers. “Then we found out we’re less than half price. Then we find out we’re a sixth to an eighth of what their prices are. I can’t believe the average person can afford health care at these prices.”
Their goal was to start a price war and they did.
Their first out-of-town patients came from Canada; soon everyday Americans caught on.
Matthew Gang, 22, tore his patella tendon, dislocating his knee-cap playing basketball earlier this year.
Gang is from California and he is uninsured.
Surgery in his home-state was going to be about $30,000.
The posted price at Surgery Center of Oklahoma was $5,700, one-fifth the price.
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.”
A handful of other Oklahoma medical facilities have started joining Surgery Center of Oklahoma in price transparency:
- McBride Orthopedic Hospital
- Oklahoma Heart Hospital
- Cancer Specialists of Oklahoma
- Breast Imaging of Oklahoma
- Comprehensive Diagnostic Imaging
Surgery Center of Oklahoma does accept private insurance, but the center does not accept Medicaid or Medicare.
Dr. Smith said federal Medicare regulation would not allow for their online price menu.
They have avoided government regulation and control in that area by choosing not to accept Medicaid or Medicare payments.
Several medical facilities in Oklahoma are posting their prices online through The Kempton Group’s website, in order to circumvent that Medicare guideline.
The Kempton Group is a third-party administrator for self-funded health insurance plans in Oklahoma and Texas.
“The key to this is really about empowering employees.” Kempton Group President and CEO J. Wayne Kempton said.
Some Hospital administrators accuse the surgery center of cherry-picking the healthiest and wealthiest patients.
Oklahoma Hospital Association President, Craig Jones, supports transparency in theory.
Jones calls the issue “complicated” and does not expect major metro hospitals to offer online price menus in the future.
“Where we can reveal information that’s meaningful to the patient, we very much support that; that’s what hospitals need to do,” Jones said. “The difficulty when you compare hospitals with surgery centers is that surgery centers, most of the work they do are elective procedures which are a bit more predictable.”
The difference in price is staggering.
- 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.
“I think there’s a tendency to over-simplify the issue of price transparency but there’s no doubt that hospitals are and need to be more accountable to the public,” Jones said. “To try to make the services and the businesses that they carry out more understandable.”
According to the hospital association, about half of Oklahoma’s hospitals are losing money.
However, the metro’s largest hospitals, which are building free-standing emergency rooms and satellite facilities, are not on that list.
“The ‘haves’ seem to be doing a little bit better and the ‘have-nots’ seem to be doing a little bit worse,” Jones said.
However prices may be dropping because of the transparency at Surgery Center of Oklahoma.
As patients are demanding price-matching, some hospitals relent.
“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 United States.”
The economics are not simple.
But for patients who are finding ways to save on medical care, that seems to be all that matters.
Integris Baptist responded to this story with the following statement:
It is difficult to compare two bills, even for the same procedure, without taking into account a person’s general health, age, weight, medical history, lifestyle, blood type, religious preferences, pre-existing conditions both known and unknown and possible complications; all of which contribute to the final charge.
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.
The INTEGRIS Price Line phone number is available to consumers from 8 a.m. to 4:30 p.m., Monday through Friday at 405-713-4500 or toll Free 877-313-4500.