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Why can't, or don't, hospitals post prices online?

The Surgery Center of Oklahoma is one of the few medical facilities in the nation that posts its prices online. The center's leaders argue it's one of the key ways to making health care more transparent.
by Jaclyn Cosgrove Modified: September 9, 2013 at 9:30 am •  Published: September 8, 2013

When you go to buy a car, you know that you probably aren't going to pay sticker price.

Health care is kind of like that, except that no one is sure what sticker price even is.

Dr. G. Keith Smith is running a different kind of dealership.

Smith is co-founder of the Surgery Center of Oklahoma, one of the few medical facilities in the nation that posts the prices of its surgeries on its website.

Smith has a theory as to what would happen if every hospital in the Oklahoma City metro posted its prices online tomorrow.

“(Prices) would be temporary, and then the market would do its magic,” Smith said. “And then people would say, ‘Wait a minute, this hysterectomy is $18,000 more than this one — is this one $18,000 better? Why is this one more?' ... They would say the Surgery Center of Oklahoma's hysterectomy is $8,000. This surgery center is charging $6,000, so why are you $2,000 better? I would be happy to have that conversation with them if someone undercut us. It's not just about price. It's about value. It's about quality.”

A debate has long stewed in the United States about whether the price of health care varies from one hospital to the other.

In May, Centers for Medicare & Medicaid Services, the federal government's agency that administers those programs, published data that lays out the average amount of money hospitals across the nation bill Medicare and the average amount Medicare pays them for the care they deliver.

During the announcement, Health and Human Services Secretary Kathleen Sebelius said the prices hospitals charge, as shown in the data, can vary dramatically, even within the same communities, in ways that cannot easily be explained.

“When consumers can easily compare the prices of goods and services, producers have strong incentives to keep those prices low,” she said. “That's really a market theory, and that's how markets work. But even basic information about health premiums or hospital charges has long been hidden from consumers.”

The data shows, for example, that the average total payment that a hospital receives for a laparoscopic gallbladder surgery without complications ranges from $6,065 to $13,011 throughout Oklahoma.

Different way to price

Meanwhile, the Surgery Center of Oklahoma advertises its price at $5,865.

Founded in 1997, the Surgery Center of Oklahoma is a 32,535-square-foot facility that provides several types of outpatient surgeries. The center is owned and operated by about 40 surgeons and anesthesiologists who have practices throughout central Oklahoma.

Smith said his opponents argue that the center “cherry picks” the surgeries that it performs and that it doesn't perform surgeries on people who are poor.

But Smith argues that they see several poor and middle class patients who can only get a surgery they need because of the prices at the surgery center.

“We've got poor people that come here because they're turned away from the pricing with the big hospitals, not withstanding what they say at the hospitals about, ‘We take all comers.' That's not true. A lot of them are here because of our pricing.”

The center's price disclaimer points out: “The prices listed are not negotiable and are available only to those who pay the entire amount in advance. We are able to offer these prices due to the lack of expense in processing the claims and the absence of risk for nonpayment.”

Some of the largest hospitals in Oklahoma don't offer a similar page on their sites. Although some have “donate” buttons or online access for patients to pay their bills, none have price listings.

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by Jaclyn Cosgrove
Medical and Health Reporter
Jaclyn Cosgrove writes about health, public policy and medicine in Oklahoma, among other topics. She is an Oklahoma State University graduate. Jaclyn grew up in the southeast region of the state and enjoys writing about rural Oklahoma. She is...
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