Outpatient Surgery Magazine - Subscribers

The Secret of Gritflowness - October 2020 - Outpatient Surgery Magazine

Outpatient Surgery Magazine, providing current information on Surgical Services, Surgical Facility Administration, Outpatient Surgery News and Trends, OR Excellence and more.

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Page 66 of 75

The Free Market Medical Association can also help you jumpstart your journey to posting trans- parent prices (www.fmma.org). FMMA is full of providers, companies who self-fund their employ- ees' medical expenses and third-party administra- tors. As a founding member, I teach my competitors how to copy what we've done. You can tweak procedure pricing moving for- ward as you perform cases under the model and have additional conversations with surgeons, anes- thesiologists and other members of your ownership group. Many physicians will be surprised to learn that they would get paid more from your advertised bundle than they do with any insurance carrier they currently work with. Remember, the idea isn't to make the facility a huge profit generator. The idea is to pay the people who are doing the work hand- somely. This model works best for physician-owned private surgery centers, as facilities with private investors have another mouth to feed. Their prices must be higher to give these investors the 10% to 20% returns on their capital they expect. Partner with a billing clearinghouse This is simply a company that collects the fees from your customers, whether they're self- funded companies, third-party administrators or self-paying patients. It's designed with customer convenience in mind, as patients don't want to pay the surgeon, anesthesia provider and the facility separately. They write one check or use their credit card once, and you divvy up the money. I'm the administrator of the clearinghouse for my center. This provides me some discretion that gives us tremendous negotiating power. For example, if the portion of the pricing bundle for an implant is $3,500 and the surgeon wants to use one that costs $3,900, I negotiate the price down to $3,500. I've found that many vendors suddenly reduce their implant costs once we started this process in order to stay in the game. Prepare for the 'purchasing giants' The motherload of clients interested in the price transparency model is the self-funded industry. These companies decide to pay for most of their employees' medical costs out of operating funds and buy a catastrophic stop-loss policy for major med- ical events. These companies make the decision to take on the risk of how much their employees' med- ical costs will be instead of paying a major commer- cial insurer to carry the risk for them. The demand for honest, transparent pricing from these purchasing giants is so huge that no number of current providers could ever fill the demand. Self-funded companies account for 80% of claims paid in the United States that are not covered by Medicare and Medicaid. If you present transparent costs of care in a bundled fashion, you might have enough self-funded clients to eventually jettison your contracts with commercial insurance carriers. Self-funded companies are prime clients because of the sticker shock they feel after finding out how much procedures cost in a hospital system. This prospect should make the proposition of posting your prices and changing your business model less intimidating than it seems. Act now President Trump's October 2019 executive order that requires hospitals to publish their negotiated rates with insurers and other cost figures is techni- cally set to take effect on Jan. 1. Medical price transparency won't start that soon, though, as the order is facing a tough legal challenge by the American Hospital Association. The price transparency movement might be weakened, not bolstered, by the newfound govern- ment involvement. With hospitals and insurance car- riers sitting at the table, the definition of price trans- parency could change to the disclosure of only the patient's portion of a medical bill, not the total cost of care. True price transparency should involve pulling the curtain back on how much surgeons, anesthesia providers and facilities earn for every procedure that's performed. Getting on board with the movement now will ensure you're not behind the curve when price transparency becomes the clear choice among healthcare providers and consumers. Dr. Smith (ksmith@surgerycenterok.com) is an anesthesiologist, founder of the Surgery Center of Oklahoma in Oklahoma City and a pioneer of the medical price transparency movement. 2 3 O C T O B E R 2 0 2 0 • O U T P A T I E N T S U R G E R Y . N E T • 6 7

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