One of the first organizations to stand up and risk supporting our transparent pricing initiative was the Oklahoma Council of Public Affairs, a state-based think tank here in Oklahoma City. I am sure that Brandon Dutcher (OCPA’s VP of Policy), author of the guest blog below, has taken considerable heat for his and his organization’s open support of our facility and free market health care in general. Brandon is one of the best writers I know and has been a great friend of both mine and Dr. Lantier’s and certainly of our facility. I was thrilled when Brandon agreed to contribute to our blog. Enjoy.
Medical Price Deflation Comes to Oklahoma
By Brandon Dutcher
The Jane Phillips Health Corporation is the local hospital in my hometown of Bartlesville, Oklahoma. My two eldest children were born there, so I have some wonderful memories associated with Jane Phillips and with Bartlesville, where my family has lived since before statehood. (When my mother was born in Bartlesville in 1942, Jane Phillips herself telegrammed from New York to offer congratulations.)
A not-for-profit Catholic corporation, Jane Phillips’ mission is “to provide healthcare and related ministries for the people served, especially the sick, the poor, and the powerless.” The hospital says it is dedicated to delivering “cost-effective compassionate care” and is “responsive to the needs of those we serve.”
Jerome Longacre has witnessed this responsiveness firsthand. A fitness trainer at Colaw Fitness in Bartlesville, Mr. Longacre recently tore his anterior cruciate ligament (ACL). He told me that an ACL repair at Jane Phillips was going to cost him roughly $25,000, though if he paid cash it would be closer to $15,000. This was better than $25,000, but it was still a daunting prospect.
That’s when a friend told him about the Surgery Center of Oklahoma, a multispecialty facility in Oklahoma City owned by some of the top surgeons and anesthesiologists in central Oklahoma. (Many physicians, including the current and past chairmen of the ear, nose, and throat department at one of the largest hospitals in Oklahoma City, prefer to operate at the Surgery Center.) The Surgery Center actually posts its prices online, so Mr. Longacre visited the website and discovered that an anterior cruciate ligament repair is $6,990. That price includes the initial consultation with the surgeon, the surgeon’s fee, the anesthesiologist’s fee, the facility fee, and uncomplicated-follow-up care.
Upon learning this, Mr. Longacre called Jane Phillips to inform them of the Surgery Center’s price and to ask if they would match it. “I talked to three different ladies,” he told me. “Finally, the last one said, ‘Let me call you back.’ She called back in about 10 or 15 minutes and said the CFO had approved that price.”
Mr. Longacre will have the surgery in Bartlesville.
So a procedure that once looked to be around $25,000 — or at least $15,000 — turns out to be closer to $7,000. Granted, it will be interesting to see if Jane Phillips bills Mr. Longacre for $25,000 but tells him he’s only responsible for $6,990 (so they can count the difference as “un-reimbursed care”). But Mr. Longacre doesn’t care — he’s just glad he can get the surgery at the lower price and doesn’t have to travel out of town for it.
One could say the good folks at Jane Phillips, ever responsive to the needs of those requiring cost-effective care, have provided compassionate ministry in keeping with their Christian mission. Or perhaps not. As Mr. Longacre told me, “The only reason they gave me a good price was because I found that place in Oklahoma City.” In any case, the result is the same.
Are the folks at the Surgery Center upset that they didn’t get the business? Not at all. One of the facility’s owners, Dr. Keith Smith, told me: “I am pleased to welcome Jane Phillips Hospital and their parent St. John Hospital to the new competitive medical marketplace. Reducing their charge of $15,000 to match our online price indicates that they realize that it is time to embrace price and quality competition and that they are willing to do so in order to keep Bartlesville patients from traveling to Oklahoma City.
“While we never had an opportunity to meet this patient,” Dr. Smith said, “we are gratified to have saved him and his family $8,000.”