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  1. #1
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    Oklahoma Doctors vs. Obamacare

    An article well worth reading.

    Is a top-down approach to healthcare really the way to go?

    Three years ago, Dr. Keith Smith, co-founder and managing partner of the Surgery Center of Oklahoma, took an initiative that would only be considered radical in the health care industry: He posted online a list of prices for 112 common surgical procedures. The 51-year-old Smith, a self-described libertarian, and his business partner, Dr. Steve Lantier, founded the Surgery Center 15 years ago, after they became disillusioned with the way patients were treated at St. Anthony Hospital in Oklahoma City, where the two men worked as anesthesiologists. In 1997, Smith and Lantier bought the shell of a former surgical center with the aim of creating a for-profit facility that could deliver first-rate care at a fraction of what traditional hospitals charge.

    The major cause of exploding U.S. heath care costs is the third-party payer system, a text-book concept in which A buys goods or services from B that are paid for by C. Because private insurance companies or the government generally pick up most of the tab for medical services, patients don’t have the normal incentive to seek out value.

    The Surgery Center’s consumer-driven model could become increasingly common as Americans look for alternatives to the traditional health care market—an unintended consequence of Obamacare. Patients may have no choice but to look outside the traditional health care industry in the face of higher costs and reduced access to doctors and hospitals.

    The Surgery Center demonstrates that it’s possible to offer high quality care at low prices. "It's always been interesting to me,” says Dr. Jason Sigmon, “that in any other industry, tons of attention is devoted to making systems more efficient, but in health care that's just completely lost." Sigmon, an ear, nose, and throat surgeon, regularly performs procedures at both the Surgery Center and at Oklahoma City's Integris Baptist Medical Center, which is the epitome of a traditional hospital. It's run by a not-for-profit called Integris Health, which is the largest health care provider in Oklahoma serving over 700,000 patients a year.

    Sigmon says he can perform twice as many surgeries in a single day at the Surgery Center than at Integris. At the latter institution, he spends half his time waiting around while the staff struggles with the basic logistics of moving patients from preoperative care into the operating room. When the patient arrives, Sigmon will sometimes wait even longer for the equipment he needs.

    Except for the clerical staff, every employee at the Surgery Center is directly involved in patient care. For example, both human resources and building maintenance are the responsibility of the head nurse. "One reason our prices are so low," says Smith, "is that we don't have administrators running around in their four or five thousand dollar suits."

    In 2010, the top 18 administrative employees at Integris Health received an average of $413,000 in compensation, according to the not-for-profits' 990 tax form. There are no administrative employees at the Surgery Center.
    Because bills charged by Integris are paid primarily by insurance companies or the government, the hospital gets away with gouging for its services. Reason obtained a bill for a procedure that Dr. Sigmon performed at Integris in October 2010 called a “complex bilateral sinus procedure,” which helps patients with chronic nasal infections. The bill, which is strictly for the hospital itself and doesn't include Sigmon's or the anesthesiologist's fees, totaled $33,505. When Sigmon performs the same procedure at the Surgery Center, the all-inclusive price is $5,885.

    The Integris bill for the same nasal procedure went to Blue Cross of Oklahoma, so the patient had no compelling reason to question its outrageous markups. They included a $360 charge for a steroid called dexamethasone, which can be purchased wholesale for just 75 cents. Or the three charges totaling $630 for a painkiller called fentanyl citrate, which all together cost the hospital about $1.50.

    While patients and their insurance companies rarely pay the full price on a hospital bill, the bigger the bill, the more the hospital gets. Uninsured patients at Integris generally get a 50 percent discount, while private insurance companies pay closer to 60 percent of the full bill, which is still greater by orders of magnitude than what the Surgery Center collects.

    Integris Health declined to make a spokesperson available to be interviewed for this story. But in a statement, the company defended its outrageous bills on the grounds that it needs a way to cover losses on services offered free. Whatever the merits of that argument, Integris must also cover overhead costs and bureaucratic inefficiencies that the Surgery Center has managed to abolish.

    The rising cost of health insurance has been driving companies to look for ways to cope with the third-party payer system. Health maintenance organizations, or HMOs, have been one approach. Today, a growing number of firms are dumping their health insurance providers and becoming “self-funded,” meaning they pay their employees' health care costs directly out of their revenues. This model was virtually nonexistent 30 years ago, and today an estimated 60 percent of Americans work for “self-funded” companies.

    Self-funded companies, like individual patients, can negotiate directly with hospitals for lower prices. Recently a handful of self-funded Fortune 500 companies struck deals directly with major hospitals to care for their patients for a negotiated fee.

    In Oklahoma City, there’s an alternative health care market taking shape in which hospitals offers competitive flat fee prices to self-funded companies. And it’s all modeled after the Surgery Center.

    This was the brainchild of Jay Kempton, who is the president of The Kempton Group, which administers health care plans for self-funded companies. When Kempton met Keith Smith, he had been looking for a way to help his clients deal with their exploding health care costs. "Cutting edge procedures are justifiably expensive," Kempton concedes. "But what we also see are soaring increases in relatively garden-variety procedures, like a knee resurfacing or a carpal tunnel release. Those things should not be experiencing 10 or 15 percent inflation every year."

    So Kempton and Smith came up with a cost-saving arrangement: If their employees agreed to be treated at the Surgery Center instead of a traditional hospital, they would be spared the cost of all co-pays and deductibles.

    Almost immediately, Kempton was approached by other surgical centers and hospitals. There are now four health care facilities participating in his flat-fee consortium, and more are on the verge of coming onboard.

    June Wietzikoski is a typical patient benefiting from this alternative health care market. She works as a loan officer for a community bank in Groesbeck, Texas, which is a client of the Kempton Group. She had carpal tunnel release procedure done at the Surgery Center for the all-inclusive price of $2,775, which was covered by her employer. Had she gone to a traditional hospital run by Integris the discounted bill would have come to about $7,452 and she would have been personally responsible for the first $5,299, since she hadn’t met her deductible.
    "It makes me mad that people are bankrupted by our current health care system when many times the costs are completely unjustified," says Smith.


    Is Kempton's model replicable in other places? There are obstacles. Oklahoma has an unusually entrepreneurial health care sector, which stems from a 1989 decision to roll back the state's Certificate of Need (CON) laws. CON laws, which are still on the books in 35 states, require all medical facilities to get permission from a planning board before opening, which in practice provides a way for traditional hospitals to use political influence to keep new entrants out of the market.

    A new provision buried in Obamacare effectively prohibits doctors from starting their own hospitals or expanding the hospitals they already own, which has been widely interpreted as a give-away to the American Hospital Association.

    The Surgery Center is exempt from this statue, since it's technically not a hospital and it doesn't accept Medicaid or Medicare. So Smith and Lantier are considering expanding to accommodate their growing clientele.

    Smith believes that despite the obstacles, market-driven facilities like his will thrive and proliferate as consumers catch on to costly collusion between big government and big health care.

    Says Smith: "Everyone can see what the prices are at the Surgery Center, and that affordable health care is possible. So the jig is up.”
    http://reason.com/archives/2012/11/1...oma-doctors-fi

  2. #2

    Re: Oklahoma Doctors vs. Obamacare

    like everything else, it's going to **** so some guy in a suit can get more zeros on his paycheck today rather than tomorrow

  3. #3
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    Re: Oklahoma Doctors vs. Obamacare

    Nice article. I may actually know Keith Smith from way back in the day, though it's a fairly common name. I hope deals like that can survive Obamacare and the "Health Care Cabal" of insurance companies and hospitals. Wish that idea had gotten rolling sooner.
    You tell me it's the institution. Well, you know, you'd better free your mind instead.
    (Shoo-bee doo-wah)

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    Re: Oklahoma Doctors vs. Obamacare

    The price list... http://surgerycenterok.com/pricing.php

    A sample

    Arthroscopy
    Knee $ 3,740.00

    Knee with lateral release or microfracture $ 4,510.00

    Shoulder $ 5,720.00

    Elbow $ 3,740.00

    Wrist $ 4,300.00

    Hip $ 5,575.00

    Ankle $ 3,740.00

  5. #5
    SoonerFans.com Elite Member picasso's Avatar
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    Re: Oklahoma Doctors vs. Obamacare

    Costs are crazy but when you start dumbing down the price, just like anything, you get ****tier service.
    Anyone who has dealt with Indian Health knows whats coming. People will not be happy but hey, sometimes you get what you ask for.

  6. #6
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    Re: Oklahoma Doctors vs. Obamacare

    Tonsillectomy $ 3,050.00
    Adenoidectomy $ 2,695.00
    Tonsillectomy and Adenoidectomy $ 3,695.00

    Bundle and save!

  7. #7
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    Re: Oklahoma Doctors vs. Obamacare

    Quote Originally Posted by sappstuf View Post
    Tonsillectomy $ 3,050.00
    Adenoidectomy $ 2,695.00
    Tonsillectomy and Adenoidectomy $ 3,695.00

    Bundle and save!
    Treat you body like you do your car...

    If you change your water pump you change your hoses and belts at the same time...

  8. #8
    SoonerFans.com Elite Member cleller's Avatar
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    Re: Oklahoma Doctors vs. Obamacare

    Please let this be the trend of the future.

    Maybe it could be translated to the public school system.

  9. #9
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    Re: Oklahoma Doctors vs. Obamacare

    Quote Originally Posted by pphilfran View Post
    The price list... http://surgerycenterok.com/pricing.php

    A sample

    Arthroscopy
    Knee $ 3,740.00

    Knee with lateral release or microfracture $ 4,510.00

    Shoulder $ 5,720.00

    Elbow $ 3,740.00

    Wrist $ 4,300.00

    Hip $ 5,575.00

    Ankle $ 3,740.00
    Is that shoulder price for shoulder replacement? I had my worn out right
    should replaced and the itemized bill was a little over $41000. Insurance
    paid nearly all of it, I had a small deductible to be met, then there was four
    months of rehab/therapy. But, holy cow...

  10. #10
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    Re: Oklahoma Doctors vs. Obamacare

    Quote Originally Posted by rock on sooner View Post
    Is that shoulder price for shoulder replacement? I had my worn out right
    should replaced and the itemized bill was a little over $41000. Insurance
    paid nearly all of it, I had a small deductible to be met, then there was four
    months of rehab/therapy. But, holy cow...
    Those prices are for an arthroscopy

  11. #11
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    Re: Oklahoma Doctors vs. Obamacare

    Quote Originally Posted by pphilfran View Post
    Those prices are for an arthroscopy
    'K, thanks.

  12. #12
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    Re: Oklahoma Doctors vs. Obamacare

    Quote Originally Posted by rock on sooner View Post
    'K, thanks.
    But you can get a penile prosthesis for $15k!

  13. #13
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    Re: Oklahoma Doctors vs. Obamacare

    Quote Originally Posted by sappstuf View Post
    But you can get a penile prosthesis for $15k!
    I am in need of a penile reduction...cost?

  14. #14
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    Re: Oklahoma Doctors vs. Obamacare

    Quote Originally Posted by pphilfran View Post
    I am in need of a penile reduction...cost?
    I don't see "delusion" as a covered procedure...

  15. #15
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    Re: Oklahoma Doctors vs. Obamacare

    Quote Originally Posted by sappstuf View Post
    I don't see "delusion" as a covered procedure...
    lol

  16. #16
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    Re: Oklahoma Doctors vs. Obamacare

    Our family doctor has mentioned several times about something like this. He would like to go to a cash only type system and forego insurance altogether. He once told me that between medicare (he doesn't accept new Medicare Patients) and all the various insuranace filings and staff required to do the paperwork, he could reduce costs to patients by at least 50% and probably more.

  17. #17
    SoonerFans.com Elite Member KantoSooner's Avatar
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    Re: Oklahoma Doctors vs. Obamacare

    Quote Originally Posted by picasso View Post
    Costs are crazy but when you start dumbing down the price, just like anything, you get ****tier service.
    Anyone who has dealt with Indian Health knows whats coming. People will not be happy but hey, sometimes you get what you ask for.
    I've dealt with Indian Health, Cherokee version. I was pretty happy with it.

    In any event, it's nice to see someone, albeit on a local scale only, trying to attack costs rather than just finding a bigger shovel with which to hurl money at the beast.
    I've often cursed my father for raising me as a Poke fan - Poke Fan 12/7/13

  18. #18
    SoonerFans.com Elite Member TUSooner's Avatar
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    Re: Oklahoma Doctors vs. Obamacare

    Quote Originally Posted by sappstuf View Post
    I don't see "delusion" as a covered procedure...
    That made me laugh.
    You tell me it's the institution. Well, you know, you'd better free your mind instead.
    (Shoo-bee doo-wah)

  19. #19
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    Re: Oklahoma Doctors vs. Obamacare

    Quote Originally Posted by TUSooner View Post
    Nice article. I may actually know Keith Smith from way back in the day, though it's a fairly common name. I hope deals like that can survive Obamacare and the "Health Care Cabal" of insurance companies and hospitals. Wish that idea had gotten rolling sooner.
    Lots of Doctors were trying this and many other ideas to try and cope with all of the issues they were bombarded with. We lost lots of Doctors when many of them moved to practices like that. I know how we were having to deal with section 8 Patients back in the 80's. It's when I decided to find something else like Accounting and Business Management rather than end up as an employee of some Super Practice driven by nothing but profit. It sounds good but it misses the basic reason that Doctors should concentrate on and that's never turning away a patient that needs care and especially specialty care that they couldn't ever pay back even if you gave them an 80% discount.

  20. #20
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    Re: Oklahoma Doctors vs. Obamacare

    Quote Originally Posted by KantoSooner View Post
    I've dealt with Indian Health, Cherokee version. I was pretty happy with it.

    In any event, it's nice to see someone, albeit on a local scale only, trying to attack costs rather than just finding a bigger shovel with which to hurl money at the beast.
    I deal with local tribal health and it is amazing..but i did work statewide for IHS that showed that for the most part, it is a miserable experience with horrible service for the most part across the state.
    Bazinga

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