This month marks the 15th anniversary of our facility. We opened May 28, 1997, having purchased the facility on a hunting trip of all things. Dr. Lantier and I opened the facility under unimaginable odds. The usual suspects aligned to seal our doom, only to watch the facility grow beyond even our dreams. By 2003, we required more space and moved our operation to a new 40,000 square foot facility designed by Dr. Lantier. Between 1997 and 2003, many political obstacles were encountered as members of the big health cartel (as I now call them), always ready to distribute loot to key legislators, tried time and again to hamstring our operation, indeed any operation owned and controlled by physicians. Certificate of need legislation as well as what we came to call the “30% law” reared their heads every year. The “30% law” is worth reviewing. This proposal essentially required all medical facilities to derive 30% of their revenue from the following sources: Medicare, Medicaid and Uncompensated Care. As we had decided to take no government money, this was a problem for us. I remember being confused the first time this came up. If care was uncompensated, how could it represent a source of revenue? This was a milestone for me, the beginning of my understanding of the cartel and the schemes and scams present at every turn. It is clear to me only now that if 10% of a “not for profit” hospital’s revenue is “Uncompensated Care,” this number is gigantic. The hammer for non-compliance with the “30% law” was that to the extent that 30% of any facility’s revenue didn’t come from these three sources, the facility would pay a “tax” to make up the difference, essentially a penalty for what was derisively called “cherry picking.”
Having successfully lobbied (bribed) at the federal level for huge compensation from Medicare and Medicaid for themselves and pathetic reimbursement for physician-owned facilities, the hospitals proceeded to berate physician-owned facilities for Medicare and Medicaid avoidance! All the while they moaned and cried that we were “cherry picking.” Later, much later, I realized that the giant hospitals claimed the difference between what they billed and collected as uncompensated care, and received a significant part of this number as revenue, like a car-dealer’s end of year rebate from the taxpayers. It was hard, even for me, to come to the conclusion that the hospitals provided no charity care, whatsoever. They had mastered the “poor mouthing” technique that is now all too recognizable.
These early battles, the certificate of need threat (whereby the health department and the legislature’s approval was required for any new medical facility to open), the “30% law” and the derisive charge of “cherry picking” angered me, but also made me curious. We fought the cartel at every turn and won every legislative battle, making the libertarian case to legislators on both sides of the aisle. I don’t know how many times I said, “Just leave us alone. We don’t want anything. Leave us alone and quality will improve and prices will fall.” Our political influence and success were verified when I was discretely offered a bribe to stop fighting the cartel in 2003.
I think we realized early on that our fight was bigger than the survival of The Surgery Center of Oklahoma. We began to see our fight as a fight for traditional medicine and the fight for liberty. More physician-owned facilities appeared, some recently joining us in offering packaged and transparent pricing. Our facility represents everything that the cartel despises, an eyesore for those in government and corporate medicine, those who think nothing of putting patients last in the interest of profits. Our latest move, posting prices online, has created a national stir, seen as a tremendous threat to the status quo. Businessmen previously cozy with the cartel are now our biggest fans, able to compare side by side our prices to those of their previous pals who have been fleecing their companies and their employees for all of these years.
We have dealt with other types of obstacles. Early on, we endured a lawsuit within the partnership regarding our unyielding adherence to free market principles. Even though this was long ago, this experience continues to serve as a reminder of the importance of the concept of property rights within our organization. We also sustained significant damage to our physical plant one year ago during an Oklahoma hail storm. I’ll never forget the employees and their families working tirelessly on that Sunday night and for the next two weeks to deliver us from that nightmare.
We have not been alone on this journey. The Association of American Physicians and Surgeons (AAPS) has been with us all of the way providing the intellectual support and framework necessary for our success. AAPS, Dr. Jane Orient (I refer to her as the “Killer of Clintoncare”) in particular, has created opportunities for our story to reach large and influential groups. The Ludwig von Mises Institute, founded and led by the brilliant and uncompromising Lew Rockwell, has represented a source of material and inspiration without which we would have been lost. My friend and lawyer, Dave Kennedy (whose ability to reduce ideas and concepts to their essence is unsurpassed in my opinion), has provided insight and guidance without which we would either never have opened or would not have stayed open. Our staff and surgeons, having trusted us to lead, even when our positions and policies have seemed risky and inflexible, are a truly unique group of individuals with whom Dr. Lantier and I are especially proud to be associated. I would like to thank each and every one of you for your support and trust.
Other than our first days, 15 years ago, these are, I believe the most exciting days for our facility. Our adherence to the principles of the free market have benefitted many in the Oklahoma City community and beyond, even out of this country (Canadians, in particular). I am increasingly contacted by facility directors with detailed questions concerning how to copy what we have done, inspired by the vindication of the ideas of liberty, what it means for them as physicians and above all what it means for their patients. All of this indicates to me that we are well along the road at the end of which rests the carcass of the bloated health cartel and the rebirth of traditional patient-focused medicine.
G. Keith Smith, M.D.