Free market resources are emerging to help patients find health care at a fair price

Jed Stuber  ·  Jan 01, 2015

The problem of cash-paying patients—including Samaritan members—being billed too much for health care is a longstanding one. It has gradually gotten worse for more than a century, but especially since Medicare was enacted in 1966, as regulations and cartels have distorted the health care market. (For an excellent presentation of a Biblical perspective on this history, watch member Colin Gunn’s new documentary, Wait Till It’s Free.)

Thankfully, with a little determination, cash-paying patients have always been able to get what they need in health care for a reasonable price, while retaining their liberty. What could be more American than getting a deal? And recent developments indicate that some of the barriers to paying cash are being overcome.

The inaugural conference of the Free Market Medical Association recently brought together a new wave of health care entrepreneurs. They want to provide medical services directly to cash-paying patients and also provide information services that will help cash-paying patients find real prices.

The FMMA would like to see more people exercising their liberty to produce real health care reform. Ultimately FMMA would like to see a return to treating patients as they ought to be treated: as the customer.

The center of attention at the FMMA conference was Dr. Keith Smith from The Surgery Center of Oklahoma (SCO), who is featured in Wait Till It’s Free. (We’ve reported about SCO before:)

Dr. Smith has been making waves in health care since he posted all SCO’s surgery prices online. What SCO has done is often referred to as “price transparency.” It is virtually unheard of in health care, but Dr. Smith says it is the key to improving our ailing health care system.

Refreshingly, Dr. Smith says we actually need to be talking about “price honesty.” He recognizes that the problems in health care have moral and spiritual roots. Deception and corruption are widespread. Powerful forces are at work to hide and obscure prices and profits, which makes it possible to exploit people at the time they are suffering through a medical crisis.

Dr. Smith talks about how all the layers of bureaucracy in health care make it so inefficient and expensive. Third parties come between doctors and patients, turning them into adversaries. By eliminating the layers, SCO is able to do surgeries at about a tenth of the price hospitals often charge. Not only that, patient satisfaction ratings are excellent, as are outcome measurements, such as unexpected hospitalizations and infections. SCO posts their outcomes for all to see, unlike hospitals that aren’t so forthcoming. On top of all this, high quality surgeons are attracted to SCO, because they are paid well.

It is no wonder that SCO has garnered national and international media attention. Often the first objection Dr. Smith has to deal with is that it all sounds too good to be true. But it has a proven track record.

As an ambulatory surgery center, SCO focuses on minor surgeries that are basically outpatient. The patient must be ambulatory and released within 24 hours. Even though the surgeries might be considered minor, savings at ambulatory surgery centers (ASCs), even the ones that don’t post their prices, can be major. Patients often save tens of thousands of dollars in comparison to having the same procedure done in a hospital.

Some of the common procedures are scope surgeries on shoulders, elbows, wrists, hips, knees, and ankles; eye, ear, nose, and throat surgeries; hernias; gynecological surgeries; and urological surgeries.

People are coming to the Surgery Center of Oklahoma for a variety of reasons. Employers that self-fund health care benefits are reaping major savings by offering their employees incentives to go there. Canadians who have “universal” health care, but outrageous wait times, are showing up. Patients with high-deductible insurance come for the surgeries that are often less than their $5,000 or $10,000 deductibles, saving them money “out of pocket.” Several Samaritan Members have chosen SCO for the quality and savings.

SCO’s price honesty is beginning to have wider effects. Hospitals around SCO aren’t posting prices yet, but they are being more forthcoming in revealing their cash prices when asked. And other ambulatory surgery centers are starting to follow SCO’s example.

There are now at least three other ASCs that have posted their prices online: Ocean Surgery Center in Torrance, California (californiasurgeryprices.com), Monticello Community Surgery Center in Charlottesville, Virginia (monticellosurgery.com) chaired by Samaritan member Dr. William Grant, and Orthopaedic Surgery Center of Clearwater, Florida (oscc.org).

Surgeries done at ambulatory surgery centers seem to be a natural fit for price honesty and traveling to reap savings. The conditions these kinds of surgeries treat aren’t the kind of thing that prohibit people from traveling. Patients have the time to evaluate options that they might not have with general or major surgeries. There are usually not major, unforeseen complications. The prices given online are all-inclusive: surgeon, anesthesiologist, implants, facility. There are no surprise bills.

The price honesty model Dr. Smith pioneered has led to other developments. Ineedasurgery.com is a new website seeking to serve cash-paying patients by allowing them to request an upfront price from a network of ASCs. The number of ASCs has quadrupled in the last 30 years, and they will soon outnumber hospitals. There are a lot less “layers” in an ASC than a hospital.

Outpatient surgery is the low hanging fruit for price honesty savings, but will price honesty expand into more areas of health care? There are good indications that it will.

Medibid.com, a service all Samaritan Members can access through the Member Web App, allows patients to put a procedure they are seeking out for bids by providers. This approach can result in thousands in savings—even for an area like diagnostics, where you might think there would be some competition and decent pricing. But providers often overcharge patients for these standard procedures, too. One Samaritan member, frustrated by the high prices of colonoscopies around him in Chicago, used Medibid to save money by flying to Oregon for a colonoscopy. Another couple had tests done while on vacation in Costa Rica.

Many other online “price comparison services” are emerging as well.

  • TheZeroCard.com allows patients to quickly find prices for procedures. A smart phone app allows patients to get pricing as quickly as shopping on Amazon. It could be used by patients in their doctor’s office as they are being told what kind of procedure they will need.
  • Pricinghealthcare.com offers free registration for its service that lists providers and the prices they are willing to disclose. And more are doing so every day.
  • Healthcarebluebook.com helps patients determine what a fair price should look like, by gathering data on the large difference between what providers accept from insurance and the list price often billed to cash-pay patients.

Price honesty is also emerging in primary care. The American Association of Physicians and Surgeons, an organization that has long defended medical liberty and the privacy of the doctor-patient relationship, maintains a list of cash-pay friendly doctors on their website.

An emerging trend is “Direct Primary Care” (DPC). These practices charge a reasonable monthly fee for unlimited access to a primary care doctor, usually based on age of the patient. Here is an example of a common pricing structure: adults 20-50 years old, $50/month; adults 51-65 years old, $75/month; adults 66+ years old, $100/month; children 0-19 years old $10/month with at least one parent membership.

DPCs keep the patient-to-doctor ratio much lower, more like 500-1, in contrast to the 3,000-1 ratio that is common. Same-day and next-day appointments are common, and there really is no limit on how many times you see the doctor or how long you spend with him. Patients also receive direct access to doctors via phone and email. Many in-office services, such as stitches or an EKG, are included in membership. Labs and prescriptions are often provided onsite for wholesale prices.

There are no complicated codes or billing because DPCs don’t take insurance, which saves overhead costs because the doctor doesn’t have to hire several employees to take care of billing headaches. DPCs also usually save credit card processing fees because they use direct transfer. The patients set up the recurring payments from a bank account and the doctor simply pushes a button once a month to process the batch of payments. No secretary needed. Administrative costs are kept low and the doctors are working for the patient, not a third party.

At the Free Market Medical Association conference, I had the pleasure of meeting doctors from three DPCs: Epiphany Health in North Port, Florida, Atlas MD in Wichita, and One Focus Medical in Oklahoma City (onefocusmedical.com). I’ve also recently learned that three Samaritan members are doctors involved in Direct Primary Care. Dr. Daniel Sneed, who also serves on the Board of the Morning Center, has a DPC in Dallas-Fort Worth. Dr. Bruce Jung has a DPC serving the Corbin, Kentucky, area, and Dr. Eric Potter is a doctor who will be starting a DPC in the Franklin, Tennessee, area this summer.

There are probably many others, but as best I can tell there is no master list of them, so you just have to do some searching in your area. You are more likely to find one in a large city. Perhaps the best website to start with is iwantdirectcare.com, where individuals register to show doctors that there is demand for direct primary care. Others to check are dpcare.org and directprimarycarejournal.com.

Direct primary care is a trend that is likely to grow, especially in light of recent reports that the exchange insurance plans under the Affordable Care Act pay doctors less than they typically receive from insurance or Medicare. A recent report found that as many as one-fourth of America’s doctor aren’t participating in ACA plans, and in California 70 percent are not participating.

These patients are finding out the hard way that coverage does not equal access to care. But cash-paying patients—including Samaritan members—are well positioned to take advantage of new emerging services and meet the challenges of the always changing health care landscape.