Imagine if patients could look up the cost of a particular treatment or procedure as easy as they look up appetizers on a restaurant menu. Thanks to some progressive thinking in an Oklahoma surgery center, this approach may be closer than you think.
Recently, the Surgery Center of Oklahoma took the initial steps toward total healthcare price transparency by posting all-inclusive surgery rates online. The result? They uncovered a pricing advantage they had over area hospitals.
“When we first started, we thought we were about half the price of the hospitals,” said Dr. Lantier, co-founder of the center. “Then, we found out we’re less than half price. Then, we find out we’re a sixth to an eighth of what their prices are. I can’t believe the average person can afford health care at these prices.”
Healthcare Transparency
It’s common for hospitals to protect their pricelist closely. But Dr. Lantier and his colleague, Dr. Keith Smith, believe that private practices will attract more patients by increasing transparency and accountability.
“What we’ve discovered is that healthcare really doesn’t cost that much,” said Dr. Keith Smith, the other founder of the Surgery Center of Oklahoma. “What people are being charged for is another matter altogether.”
An online medical pricing menu may look something like this: patient physicals – $40; lab work – $80; diabetes screening – $200. All prices should be guaranteed, so patients aren’t wary of surprise fees.
It seems to be working. As news has spread of the center’s affordable pricing, out-of-town patients have quickly started flocking to the center – first from Canada, then from the rest of the U.S.
Tom Gang flew his son from California to Oklahoma for a basketball-related knee surgery that would have cost five times as much in his home state. Even with travel expenses taken into account, the price of the surgery was still significantly more affordable with the out-of-state provider.
“It was well worth it,” said Gang. “I need a rotator cuff surgery right now. I’m thinking about flying out there and having my surgery because it was such a positive experience for us.”
Price Matching
Now, other medical providers in the state may lower their prices in response to the free market competition the “menu model” is driving. As better-informed patients are becoming empowered, larger providers are adapting to their demands.
“Hospitals are having to match our prices because patients are printing their prices in one hand and holding a ticket to Oklahoma City in the other hand,” said Dr. Smith. “We’re actually causing a deflationary effect on pricing all over the United States.”
But not everyone is on board with the menu model. As patients demand price matching, some hospitals are resisting.
Craig Jones, Oklahoma Hospital Association President, supports transparency in patient education but admits the pricing issue is more complicated. He does not expect major metro hospitals to offer online price menus anytime soon.
“Where we can reveal information that’s meaningful to the patient, we very much support that; that’s what hospitals need to do,” said Jones. “The difficulty when you compare hospitals with surgery centers is that surgery centers mostly work on elective procedures that are a bit more predictable.”
There is a drawback to the menu model. Due to Medicare regulations, providers aren’t allowed to post pricing. As a result, the Surgery Center of Oklahoma can accept private insurance but does not operate on federally insured patients.
Yet, around the industry, this seems to be the future of health care pricing. This past May, in an effort to increase patient accessibility to affordable health care, Health and Human Services (HHS) released a massive data file, detailing what more than 3,000 hospitals charge for the 100 most frequently billed medical services under Medicare.
So if you’re a low-cost provider, the menu model may be an effective way of promoting your affordability to patients. Chances are your private practice is far less expensive than the larger providers in your area. Don’t be afraid to put your prices out there. It may help you expand your patient base.
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