Revealing a health care secret: The price

From the Fixes blog at the New York Times:

The Surgery Center of Oklahoma is an ambulatory surgical center in Oklahoma City owned by its roughly 40 surgeons and anesthesiologists. What makes it different from every other such facility in America is this: If you need an anterior cruciate ligament reconstruction, you will know beforehand — because it’s on their Web site — that it costs $6,990 if you self-pay in advance. If you need a tonsillectomy, that’s $3,600. Repair of a simple closed nasal fracture: $1,900. These prices are all-inclusive.

Keith Smith, the co-founder of the center, said that it had been posting prices for the last 4 of its 16 years. He knew something was happening, he said, when people started coming from Canada. “They could pay $3,740 for arthroscopic surgery of the knee and not have to wait for three years,” he said. Then he began getting patients from elsewhere in the United States and began to find out — “I get 8 or 10 e-mails a week” — that he was having an effect on prices far away. “Patients are holding plane tickets to Oklahoma City and printing out our prices, and leveraging better deals in their local markets.”

The Oklahoma City TV station KFOR, which ran a story on the Surgery Center on July 8, said that several other medical facilities in Oklahoma are now posting their prices as well.

KFOR’s story has been picked up by news outlets around the United States. Clearly what the Surgery Center has done is resonating.

On NewChoiceHealth.com, which compares prices offered by different facilities in the same city, Smith’s prices are consistently the cheapest or near it in Oklahoma City. Several hospitals charge $17,200 for laparoscopic hernia repair — for which Smith charges $3,975. A gallbladder removal is $24,000 at some hospitals in the city; it’s $3,200 at the Surgery Center. His prices are better in part because ambulatory surgical centers are cheaper than hospitals (for many reasons), but also there’s a virtuous circle here. He can post his prices because they are good ones. And they are good because he’s chosen to compete on price.

What’s remarkable is that this is remarkable. Why should a business become the subject of news stories simply because it tells people the cost of its services?

Because it’s health care. Unlike everything else we buy, when we purchase a medical treatment, surgery or diagnostic test, we buy blind.

Read the complete post here.

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