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Archive September 2013 XIV, No. 9

Is Surgery Ready for Price Transparency?

The doctors who run the Surgery Center of Oklahoma — and winners of this year's financial management award — are out to expose much more than their own prices.

Jim Burger

Jim Burger, Senior Editor


ORX Award Winner
Keith Smith, MD MARKET-BASED Keith Smith, MD, co-founded the Surgery Center of Oklahoma in 1997, certain that free-market competition could improve quality and reduce prices.

Keith Smith, MD, isn't looking to shake up the American healthcare system. He's looking to blow it to bits and help rebuild it in a way that dramatically eases the burden for surgical facilities, physicians, patients, employers and taxpayers — just about everybody, in fact, who isn't profiting from maintaining the status quo (or who stands to profit as a result of impending legislation).

He might just pull it off.

price transparency

Dr. Smith and partner Steven Lantier, MD, both anesthesiologists, started the Surgery Center of Oklahoma in Oklahoma City in 1997. Nearly 5 years ago they made the radical decision to start posting surgery prices online.

It was "almost an act of self-defense," says Dr. Smith, "a shot across the bow" aimed at the deeply entrenched institutions that were making it hard, he says, for his center to compete, despite its emphasis on high quality at extraordinarily low — at least by comparison — and transparent prices. It's all right there on the website, $2,750 for a carpal tunnel release, $6,260 for an open rotator cuff repair, $2,255 for a lymph node excision with biopsy and $6,990 for an anterior cruciate ligament repair. The site lists well over 100 procedures, each with an all-inclusive price covering the facility fee, the surgeon's fee and anesthesia. Hardware and implants are extra, but are provided at cost.

That unprecedented transparency was a great way to get noticed, but it was also much more than just competitive jockeying. It was — and is — part of a mission, a crusade to pull back the curtain on what Dr. Smith sees as a corrupt, thoroughly inefficient and vastly overpriced system. "Health care doesn't cost that much," he insists. "That's the myth. It's just what people are being charged for it is another matter altogether."

His formula for change: Provide great service and great quality at fair and transparent prices, keep employees engaged and happy, strive constantly to improve efficiency, and — above all — let the free market determine the outcome. "It is so simple," he says. "The hard part is sweeping away all those obstacles that would make it sound something other than easy. The hard part is making it simple."

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