Tonight, a local news station, KFOR, will run a segment on price transparency in healthcare, featuring our facility. Here is what I anticipate the hospitals will say in response to the channel four (KFOR) story by investigative reporter, Ali Meyer:
1) We set our prices to account for the fact that we treat all patients regardless of their ability to pay
2)We offer services that are money-losers that must be subsidized by higher charges in other areas.
3) We must shift our costs and losses for those who do not pay us to those who do.
4) Surgery centers and other niche facilities offer only profitable services while full-service hospitals must offer all services and deal with truly indigent care.
5) We are open 24 hours a day, 7 days a week. Our overhead is therefore much higher and this must be passed on to the healthcare consumer.
And here is what the hospitals will not say and what they hope no one knows:
1) Many of the uninsured patients the hospitals turn away (because of their inability to pay) end up in physician-owned facilities like ours, receiving the operation or care they were denied at these so-called “not for profit” facilities. They charge gigantic and uncollectable amounts to maximize their take from the uncompensated care scam and also to create red ink and bad debt that allows them to carry “reserves” that are many times in the billions of dollars, all the while claiming to not make a profit.
2)Hospitals get paid even when they don’t get paid….even when they “show” a loss. Federal kickbacks from the uncompensated care system are calculated based on the extent to which hospitals claim they were not paid. The more they say they weren’t paid, the more they are paid! Hard to lose money on this deal.
3)Cost shifting means that your bill and someone else’s bill are put into your pocket as you leave the hospital, you paying for both. Using this logic, it is hard to maintain that the hospitals are providing any charity care at all, isn’t it? All of the massive new building projects, hospital purchases and physician practice purchases are financed with this cost-shifting. It simply is overcharging.
4)Hospitals make money on everything they do. Remember, they make money when they claim they lose money, making more money, the more losses they claim. They have claimed for years that their emergency rooms lose money, yet there is a crane in front of almost every ER, building on. Wouldn’t you build on to your loss leader? They have even commissioned studies to show that their ER’s lost money, but the money generated from the surgeries and diagnostic studies generated from the emergency room patients has always been mysteriously eliminated from these revenue calculations. Reason magazine journalist, Jim Epstein discovered that our online prices were actually less than what Medicaid pays the area hospitals for the same services.
5) Hospitals have been using their “cost structure” or overhead to justify their charges for years. Health care consumers are beginning to flee these horribly inefficient institutions, particularly now that they know that affordable and upfront pricing is available in Oklahoma City for almost anything healthcare-related you can think of. It is about time the budget of the consumer ruled the day, rather than the empire-building desire and inefficiencies of the hospitals.
Many thanks to KFOR and Ali Meyer in particular for increasing the awareness of healthcare consumers in this area, fanning the flames of a price war in healthcare that has already begun, a price war that will raise the quality bar and lower the cost just as competition has in every other industry.
G. Keith Smith, M.D.