G. Keith Smith, M.D.

Here is Representative James Lankford (R, OK) at 16:35 into the hearing mentioning our facility.  Representative Lankford has been fearless in his endorsement of our free market and transparent approach to medical care and pricing since first going to Washington in spite of intense pushback from the hospital lobby. 

G. Keith Smith, M.D.

Here is an update on some of what’s happening at The Surgery Center of Oklahoma.

We have recently decided to accept credit cards for payment of services. The price online will be adjusted at the time of payment to reflect the percentage the respective card company charges us.  We are very excited to see how this develops.

I am travelling and speaking all over the country about medical free markets and price transparency.  The greatest demand for speaking opportunities seems to be from self-funded employers and their benefits administrators who are interested in sending us referrals from out of state. 

Our new website and logo will be launched/unveiled in a few weeks now.  This new website will allow me to nimbly change prices as new competitors in the marketplace appear, will allow me to add new procedures with pricing and will also allow for video display….even some video blogs.  This has been a huge undertaking but will allow for us to showcase our facility and staff.  

Many of you already know that I have been on the John Stossel Show and CNBC.  There is much more national media exposure to come.  As I wrote recently, this message has been received as “good news in a bad news industry.”  It is hard to criticize cheaper and better, although the statists always seem to find a way.  Our local media are beginning to get in on the act, interestingly risking alienating some of their largest media buyers in doing so.

Patrick McGuigan, modern-day Joseph Sobran, has asked me to contribute a biweekly column to his publications, Capitol Beat OK, The City Sentinel and OklahomaWatchdog.org.  I look forward to contributing to his fine outlets.  Many of the writings will be blogs, but will reach a large audience otherwise not exposed to our message.

We are in the process of organizing a national symposium on free markets in medicine and price transparency, involving everyone in the medical industry that is participating, businesses who are increasingly demanding this, benefit administrators who “get it,” and think tanks and even policy makers.  I’ll keep you posted on this as it progresses.  

G. Keith Smith, M.D.

If this is the best the statists can do we are in good shape.  Dr. Peter Ubel, no Rothbardian, asserts that price transparency could actually increase the price of healthcare (Lasik?) and that while cardiologists and other super specialists make too much money, primary doctors don’t make enough.  

Dr. Peter Ubel, like all  central planners, suffers from the fatal conceit Hayek brilliantly described in “The Road to Serfdom.”  Once again, prices emerge from a free market…they are not imposed.  That Ubel thinks or feels some doctors make too much money is irrelevant and more than likely relates to an unresolved envy issue with which he is struggling, not unlike that Mises dissected in “The Anti-Capitalist Mentality.”  

I wasn’t going to respond to this silly article but there is something to learn, after all.  In response to a question about the free market and price transparency movement we are seeing in the U.S., Ubel says this:

The free market is a wonderful thing, when it enables consumers to make informed choices about which products to buy. But medical consumers, a.k.a. patients, often have a hard time making the kind of savvy choices that will bring discipline to the market. Moreover, they are often in positions of making high-stakes, emotional decisions, in short time spans, without fully understanding their choices. To make matters worse, many physicians I’ve spoken with say they feel it would be inappropriate to discuss the cost of care with patients, especially when they face life-or-death decisions. Hard to imagine how the market, on its own, will work effectively in such circumstances. We need to bring more market efficiency to healthcare, but it is unrealistic to think that a completely unregulated free-market is going to solve our problems. 

Now the first thing to say, is that while he is pontificating and thinking deeply about things, we are doing everything he says can’t be done.  Also, patients are well-informed in spite of his arrogant characterization of them.  

Second, he has contaminated his view with a time twist.  Here’s what I mean.  He is judging the applicability of free market principles in the future, using a current time context.  Here is why that is absurd.

In Oklahoma City, there are car dealerships that are interested in selling you not only your first car, but every car you ever buy.  These businesses have built reputations over time, reputations of fair dealing and thinking long term, not the hit-and-run “gotcha” mentality at some car lots.  Everyone knows who the reputable dealerships are.  The same goes for roofers and plumbers and tire stores and banks and….and now healthcare.  Everyone in Oklahoma City knows that if they need surgery, The Surgery Center of Oklahoma is the place they can go that will treat their pocketbook with respect while rendering the best care.  The same goes for those needing a total joint replacement.  They go to the McBride Clinic Orthopedic Hospital.  The same goes for a colonoscopy.  They go to Digestive Disease Specialists.  The same goes for cancer chemotherapy.  They go to my friend Dr. Aleda Toma and her partners at Cancer Specialists of Oklahoma.  The same goes for mammography.  They go to Breast Imaging of Oklahoma.  The same goes for cardiac disease or surgery.  They go to my friend Dr. John Harvey and his partners at the Oklahoma Heart Hospital.  The same now goes for major gynecological and urological and general surgery requiring an inpatient stay.  Patients will very soon know more about Deaconess Hospital, the latest to join us in this price transparency movement.

Here’s my point.  The reputations of these facilities have taken time to create.  To say that after flipping the switch to free market, people won’t instantaneously know where to go for care, is to disallow the necessary time for discovery of which facilities represent the best value and is logically a cheap trick.  

Dr. Ubel thinks the price paid for healthcare is out of whack.  Here, he and I agree.  Dr. Ubel thinks there is some better way to allocate scarce resources than the free market.  This is where we disagree.  He has nothing to back up his stance other than his feelings.  I think the countless patients we have treated and simultaneously helped to avoid bankruptcy are sufficient to make my case.

G. Keith Smith, M.D.

Dr. Jeffrey Singer wrote this piece for Reason Magazine this week.  His article explains why the number of Canadians fleeing to the United States for surgery may have peaked and might indeed be falling.  As the Canadian system continues its death spiral, private health clinics and mini-hospitals operating on a cash basis are springing up all over the country, this new trend due to the heroic efforts of one physician, Dr. Jacques Chaouilli, profiled in Dr. Singer’s article.

Dr. Singer also clubs the U.S. system on the head and mentions the wave of private clinics and hospitals (The Surgery Center of Oklahoma amongst them) that are rising to meet demand and provide affordable and rationally priced care.  He very appropriately lays the blame for the mess in the U.S. at the feet of the federal government and their corporate health cronies.  Even the disastrous practice of hospitals employing physicians receives this article’s barbs.

It is very unusual for me to encounter an article like this where I agree with every single point the author makes.  I do agree with Dr. Singer on all but one point and I would look forward to discussing this with him at some point…and here it is.  

If the movement toward rational and transparent healthcare pricing continues, the resulting price war will bring prices down to a level where even those of modest means will be able to afford care, without government and even without insurance (catastrophic insurance will still have a place, I think).

Call me an optimist, but in the pricing trenches, I like what I am seeing so far.  If the “state” intervenes, however, the dismal future of medicine Dr. Singer predicts where only the wealthy and connected will have access is likely, however.  Let’s hope my optimism isn’t proven naive.

G. Keith Smith, M.D.

The poor and the sick folks who currently make too much money to qualify for Medicaid in Oklahoma have pooled their meager resources to lobby hard for Medicaid expansion, buying expensive media ads under the name, “Oklahomans for a Healthy Economy.” O.K. Enough sarcasm.  These ads are funded by those who would benefit from more taxpayer Medicaid loot—the big hospitals.  If the poor had organized this push, for instance, they would not have minded mentioning the word “Medicaid,” which, of course, the ads never do.

I wish these hospitals would make up their mind.  On the one hand, they claim that Medicaid payments (more than what we have listed online) are killing their profits, set way below their costs forcing them to shift the losses to other patients/payers.  On the other hand they want to expand this program.  This is kind of like, “..our emergency room is a loss leader, but we are going to build on to it.”  None of this adds up.

The hospital lobby is pushing hard in Oklahoma because the governor of the state has taken a stand, a hard stand, to reject the Obamacare exchanges and its expansion of Medicaid.  Even our local media, heavily funded by corporate medicine, has turned on the hospitals, one media outlet recently characterizing the Obamacare vehicle these hospitals want so badly, as a Ford Pinto.  The editorial in the Sunday Oklahoman asks essentially if Oklahomans want to ride as a passenger in such a vehicle.

Sometimes I think that these hospital folks have forgotten some of the lessons of childhood, where, for instance, the more a child begs at the grocery store for a candy bar at the check out counter, the less likely they are to get one as the parent’s frustration with them grows.  I hope that our governor’s disgust with the hospital whining helps her to grow even more resolute in her stance.  This is politics, though, and while the governor has remained strong, the Republican version of crony politics continues to raise its head, attempting in new devious and renamed ways to funnel money to their hospital pals.   

The hospitals aren’t the only ones who can’t make up their minds, though.  Remember the government promise that the uncompensated care scam would end with Obamacare?  Remember the hospitals begging for Medicaid expansion because of the end of this revenue stream?  Well, it turns out that the hospitals are going to get to keep their uncompensated care scam, after all!  You would think that this would dampen their media and political push for Medicaid expansion.  Nope. And that’s not all.

Remember the Medicare payment cuts that were going to hit the hospitals as part of Obamacare?  Remember the hospitals using this, as well, to bolster their arguments for the need for an expansion of Medicaid?  Well, it turns out that they are now getting a raise from Medicare!

Why can’t any of these hospital or government folks make up their minds?  I’m thinking that the question most commonly asked at the Obamacare drawing board was perhaps,”..how much do you think we can get away with?” All of this wishy-washiness then makes sense.

G. Keith Smith, M.D.

P.S.  Here’s a great article on this issue by Michael Carnuccio, President of the Oklahoma Council of Public Affairs.

Here is a link to my CNBC Asia interview with Bernard Lo recently.  He was very well-informed, had done his homework about our facility and was a gracious host.

G. Keith Smith, M.D.

Let’s say that i have advertised the price of an anterior cruciate ligament reconstruction (all-inclusive) at $6990.  Let’s say that the implants (screws, fixation devices, etc) are included in that price (I don’t mark up implant costs).  Let’s say that 1 of the 10 surgeons at my facility that does this operation insists on using an extremely expensive implant, one coming from a manufacturer with which he has a “relationship”….no such partner exists here…this is just for illustration.  I can either send him  patients (business) which means we lose money at the surgery center, or I can charge a whole lot more if he does the surgery, which prices him out of range, or at least begs the question of why is he so much more?

This is the market at work.  While central planners would work to institute price controls in the market place, the unfettered market would place the outlier physician’s price under the microscope.  Transparent pricing would quickly reveal that something didn’t smell right.  While legislators would outlaw physician owned distributorships, transparent pricing would empty the waiting rooms of physicians who play these games.  

Who benefits from non-transparent pricing?  All of the folks who would suffer if their shenanigans were discovered, that’s who.  The only way that unethical physicians, pharmacies, hospitals, physical therapy clinics, etc. can thrive is for pricing to be veiled to some degree.  Otherwise, comparison shopping would create value questions, none of which would have satisfactory answers in the case of the gougers.

The answer to “implant” profits is not a tax on implant makers any more than the answer to fraud in medicine is government goons.  The answer is price honesty and a movement away from third party payment, government payment for healthcare, in particular.  What is Obamacare?  If you guessed “just the opposite,” you go to the head of the class.  

G. Keith Smith, M.D.

One of my partners, an ear nose and throat surgeon resigned years ago from a particularly abusive HMO.  He said, “never again,” as did all of the reputable ear nose and throat surgeons in the area, physicians whose practices were already solid and busy without having to deal with this outfit.  Even though many of the HMO’s are long dead and gone from Oklahoma, this particular HMO has lingered on, only to crawl back to this partner of mine, telling him to make them an offer.  They had, very simply, lost every single ear nose and throat surgeon from their “panel,”even the not-so-good ones.

He made them an offer he knew they would refuse, a ridiculous amount, one that would make this pathetic organization his best source of payment.  They accepted.  

His presence on their “panel” allowed the HMO to advertise….well…to advertise his presence on their “panel.”  Having quality ear nose and throat coverage made their product easier to sell to reluctant employer groups, most of which know the HMO hunger games by now.  Things seemed to be going well for about three months when he noticed a sudden change.  The HMO had made it impossible to schedule a patient for surgery.  Phone call after phone call.  Extended phone consultations with remote nurse manager-gatekeepers to review the indications and justify the need for surgery.  Lost, needing-to-be-refiled paperwork.  Waiting on hold for 30 minutes while attempting to obtain pre-authorization for CT scans for patients needing sinus surgery.  And more.

It dawned on my partner that what the “beneficiaries” of this HMO had as a benefit, was not unlike what the beneficiaries of the Canadian system have and what people in this country under “Obamacare” will have:  a right to hope for care, or a right to a place in line.  A health care card in your wallet may mean nothing.  As Dr. Jane Orient has now famously said, “coverage doesn’t mean care.”  

The poor child with gigantic tonsils and adenoids with sleep apnea and chronic ear infections who could be spared all of this misery with a 20 minute operation is left holding the bag.  The parents, frustrated with this waiting game of insurance approval, are now very troubled to find out that my partner has resigned once again from this HMO.  What will they do now?

If they follow the example of many patients that have been down this road, they will wind up at our facility, paying a fair price for their child’s surgery, a price that is within their budget and having their child’s surgery done immediately, and done by the surgeon they have rightly come to trust and respect.  They will wonder afterwards why they have “insurance” at all.  They will wonder if some “insurances” are really a black mark, that actually prevent them from receiving care.  Finally and angrily they may conclude that this whole HMO idea must be good for someone, just not the patients covered by “the plan.”  

I think this illustrates that while the central planners of HMO’s or ACO’s or government health care may boast that the reimbursement levels they have arbitrarily concocted are sound and fair, they will always retain the powerful tool of rationing-access-by-bureaucracy, an incredibly cruel way to balance a budget or book a profit.

G. Keith Smith, M.D.

You can see our prices here.

The John Stossel Show on free market healthcare during which I was interviewed will re-air this Sunday at 9 pm CST.  The significance of this re-airing is that the show will be shown on the Fox News Channel, rather than Fox Business, to which fewer viewers have access.  Here is the promotional link from Mr. Stossel’s webpage about the show.

G. Keith Smith, M.D.

Thanks to Brandon Dutcher for passing this along, an article that contains an admission by the “president” that his own health care bill is a failure.  That’s right.  He has rescinded the cuts in the “uncompensated care” payments to the hospitals because….ready?….because the Unaffordable Care Act will do nothing to lessen the amount of uncompensated care!  

This is embarrassing.  This is also devastating for the hospitals attempting to continue to spew propaganda about how the states need to expand Medicaid in order to make up for their loss of uncompensated care payments.  I wrote in August of 2012 that the hospitals would perhaps support the Unaffordable Care Act and in return agree to let their uncompensated care payments go, only to get these payments anyway. 

It will be interesting to see if this mess continues to unravel or if Uncle Sam starts to play rough.  Kudos to the governors (ours, Mary Fallin, included) who have said no thanks to the exchanges and the expansion of Medicaid.  The political pressure by the hospital lobby here in Oklahoma has been intense, just as I am sure it has been in other “rebel” states.

G. Keith Smith, M.D.