Enter two medical entrepreneurs, Dr. Keith Smith and Dr. Steven Lantier, who founded the Surgery Center of Oklahoma (SCO) because they were fed up by the pricing and quality of the nation's healthcare system. The problem? Pricing did not result from free market, competitive forces, but the result of deals made involving hospitals and insurance companies. Based on the belief that transparent, up-front, and all-inclusive pricing for its medical services would bend the cost curve down, the two anestheologists have demonstrated how those free market, competitive forces can drive the healthcare cost curve down.
In a recent New American profile of SCO, the medical entrepreneurs described their decision to post their prices online. For example:
- The national average cost of a mastectomy is between $9k and $50k. SCO offers one for $5,005, saving its customers between $3,995 and $44,995.
- A spinal fusion costs an average of $50k to $150k. At SCO, it costs $16.5k, a savings of between $34.5k and $134.5k.
- At most hospitals, a hip replacement costs $40k. SCO's price: $19.4k.
- SCO boasts a near-zero infection rate. The rate ranges from 4% to 10% at the nation's hospitals.
Free market, competitive forces = lower costs and increased quality!
And look at what happens in the free market with such outcomes:
- Patients needing medical care are flocking to SCO for a better deal.
- Some businesses pay their employees' hospitals bills when SCO provides the procedures.
- When Oklahoma County put SCO services on its public employee health plan, the County saved hundreds of thousands of dollars...in the first month alone.
Of SCO's pricing practice, Dr. Smith said:
What we're doing here should not be that remarkable. What we're
doing is what every other industry in the United States does that
operates fairly. We say, "Here's what we do and here's how much
it is." We identify our costs, build in a marginal profit, and then display
those prices. That's how every other industry works, and it promotes
healthy competition and keeps quality high and prices low.
The President of the United States promised that nationalizing healthcare would bend down the healthcare cost curve. What a trickster...he really didn't mean it!
But, CSO has done it. And has been doing it...for 17 years!
Let the discussion begin...
To read the New American profile of SCO, click on the following link:
"Healthcare's Free Market Alternative."