Price Transparency and Free Market Healthcare, with Dr. Keith Smith and Sean Kelley

June 30, 2021
Lindsey Logan

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For episode 15 of our podcast, we have a special episode hosted in collaboration with the Race to Value podcast of the Accountable Care Learning Collaborative. Our host, Steven Cutbirth, was joined by ACLC’s Eric Weaver to lead a discussion with guests Dr. Keith Smith and Sean Kelley. In addition to this special episode, Point Health also partnered with ACLC to release their latest brief: "Revealing Value? Hospital Price Transparency."

Dr. Keith Smith is the co-founder and medical director of Surgery Center of Oklahoma, a physician-owned, independent, free-market surgery center that treats thousands of patients each year at a fraction of the cost of traditional hospitals. Since 2009, they have published all of their pricing publicly on their website and Keith has been an outspoken advocate for broader price transparency in healthcare. Sean Kelley is the founder and managing partner of Texas Medical Management, a Free Market Medicine solution for surgical procedures that offers competitive, transparent prices on surgical procedures across a broad range of specialties. He has more than a decade of experience in healthcare, including holding executive-level roles in hospitals and health systems.

Steven and Eric discuss several topics with Keith and Sean, including the importance of price transparency and the effects it will have on the healthcare industry, and their viewpoints on value-based care models.  

You can listen to the whole episode here or on Spotify, Apple Podcasts, or wherever else you listen to podcasts. If you’re short on time, we’ve included a few highlights from our conversation below:

Eric: “Dr. Smith, you're a true free market champion in healthcare, and I've been following your work for quite a few years. Now I learned a lot about your surgery center when I read Dr. Marty Makary’s book, which is called ‘The Price We Pay’, I definitely recommend it for all of our listeners out there. And just thinking about the work that you're doing, I wanted to know what inspired you to take that radical step of becoming a free market surgery center with fully transparent procedure pricing, bundling all the fees together, upfront. What was the motivation there?”

Keith: “In 1997, when we launched, basically walked away from our practices and launched the facility, it was a combination of things. We knew something was terribly wrong. We knew that we were involved in exchanges with patients that were not mutually beneficial. We knew the hospitals were making a lot of money, maybe more money than ever in the early to mid-nineties and our fees from the various people that paid us were dropping like a rock. And so patients were paying more, but the people doing the work were actually making less, including nurses. So that just seems stupid to us to have a rising administrator class, like something out of Terminator. That you have the people who are actually doing the work and not being paid what anybody by any stretch of the imagination would call a fair price. Just to give you an example, the last Medicare total knee that I provided an anesthetic for involved a claim...I was paid $78. That's crazy by any stretch of the imagination. So I just stopped filing Medicare claims and treated Medicare patients free. After that, I wouldn't legitimize what was obviously a corrupt and ridiculous system.”

Steven: “Sean, do you really feel that the work you've been able to put into price transparency has made a difference in shedding light on the collusion and corruption you referred to? Are you proud of that? And then what's next in terms of this movement that we've all been discussing?”

Sean: “It's the patient stories. That's more than anything. A patient’s mother coming in from Atlanta had a total joint failed procedure done in Africa, where she's from. And her daughter is a nurse at Emory in Atlanta. They tried to get her there to get it fixed. Couldn't get it fixed, needed an amputation. It was going to cost $50,000. We brought them here. We're even having it done at a big system hospital and we got the price down to $16,000 with one of the top trauma surgeon orthopedists in the state. And so it's those kinds of stories where they come here and they're crying because it was, ‘We don't know what we're going to do. We don't know how this is going to turn out. My mom's got an infection in her leg and we can't get rid of it. And everybody's saying we got to do something, but we don't have the money.’ It's those stories really. They energize not just me, they energize everybody. It's just inspiring. It makes you feel wonderful that you're helping people out. And I'm super excited about the future, where I think this is going as I think about what Dr. Smith started. And we're moving along here in Texas, and there are others around the country that are not on this call that are equally out there pushing the limits and fighting the good fight. Little by little, I know Dr.Smith sees this, we're seeing more and more TPAs start to move in this direction. More and more brokers who are starting to talk and pull their clients in this direction. More and more self-funded employers are waking up. And so I have a lot of hope. I don't know when it's going to be 1% of the healthcare dollars or it's going to be 10% or 50%. I can't predict that kind of stuff. I just know that we're keeping our head down, delivering quality care and great service at a really affordable price and a knowable price. As long as we can do that, we seem to be doing all right.”

To hear the whole conversation, click here for the full podcast episode. You can also hear more from Eric, Keith, and Sean by following them and their organizations on Twitter at @Eric_S_Weaver, @The_ACLC, @SurgeryCenterOK, @seanmkelley66, @TXFreeMktSurg.

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