ORX Proceedings
Page 20
result of a cartel that includes the federal government, large hospitals and big insurance companies, all of whom profit from the status quo at the expense of surgery centers and consumers.
In fact, he was surprised to learn that insurers wanted nothing to do with his center's approach. "We were cheaper and better," he says. "I thought they'd love that." Instead, he was startled to learn that payors are incentivized to seek out the largest bills they can find because of the way the system works. "They take a $100,000 hospital bill," he says, "and tell their grateful customer that because they fought hard and have so much power, they were able to get it down to $25,000. But then they charge a 're-pricing' fee that's typically between 25% and 35% of that $75,000 they claim to have 'saved' the customer. That's how they make their money."
Dr. Smith asked the audience who should determine their value. Nearly all agreed that the right answer is either "the patient" or "the market." Both answers are correct, says Dr. Smith. And that's the motivating force that's driving the Surgery Center of Oklahoma to cut the middleman out of the transaction.
— J.B.
