Free Market at Work: Okla. City Hospital Causes Bidding War by Posting Surgery Prices Online

For most Americans, the cost of undergoing surgery can cost anywhere between $1 and $1,000+ dollars. The prices vary as all sorts of factors affect the final price.

That is, the price of surgery is a total mystery unless you go to the Surgery Center of Oklahoma in Oklahoma City. They post their prices online.

Founded nearly 15 years ago by Dr. Keith Smith and Dr. Steven Lantier, the clinic has thrived on its promise of “price transparency,” KFOR-TV reports.

“What we’ve discovered is health care really doesn’t cost that much,” said Smith. “What people are being charged for is another matter altogether.”

The company started posting its all-inclusive surgery prices online four years ago:

“When we first started we thought we were about half the price of the hospitals,” Dr. Lantier said. “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.”

By being upfront about their prices, the KFOR-TV report explains, the clinic hoped to win over customers by defeating its competition in a price war.

The Oklahoma doctors were successful on both accounts.

“Their first out-of-town patients came from Canada; soon everyday Americans caught on,” the report reads. “A handful of other Oklahoma medical facilities have started joining Surgery Center of Oklahoma in price transparency.”

“Surgery Center of Oklahoma does accept private insurance, but the center does not accept Medicaid or Medicare,” the report continues. “Dr. Smith said federal Medicare regulation would not allow for their online price menu.”

They have been able to avoid government regulations in that area by simply not accepting Medicaid or Medicare payments.

Patients like what they see and they are demanding price-matching -- much to the chagrin of  some hospitals.

“Hospitals are having to match our prices because patients are printing their prices and holding that in one hand and holding a ticket to Oklahoma City in the other hand and asking that hospital to step up,” Dr. Smith said. “So we’re actually causing a deflationary effect on pricing all over the United States.”

In other words, the Surgery Center of Oklahoma has forced its competition to, well, compete.

Click here to read KFOR-TV full report.

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