Smith argues that the lack of pricing transparency in health care, not knowing what a surgery costs until a letter shows up in the mailbox, is one of the key factors in rising health care costs.
Hospitals generally have no motivation to lower prices because no one knows what they're charged until their bill shows up, Smith said.
“They'd rather employ a ‘Let's see what we can get away with' pricing, rather than what's mutually beneficial,” he said. “We just decided we wanted to be part of the solution and not part of the problem, and the pricing you see coming out of most hospitals nowadays — there are exceptions — is ‘What can we get away with?' rather than “What are our costs?' and ‘Let's build in a profit' like any other industry in the United States. And we decided we would do it a different way.”
Each patient is unique
Jon Vitiello, chief financial officer for Mercy in Oklahoma and Arkansas, said he applauds Surgery Center of Oklahoma for pushing for price transparency — but placing prices on a website can be misleading.
“Unlike the Surgery Center of Oklahoma, we believe every patient is unique,” he said. “While there will be similarities, there will be uniqueness with every patient, so we encourage our patients to call us.”
Vitiello said if people call and ask, regardless of whether they're a patient, a Mercy financial staff member will give them an answer.
Mercy Hospital Oklahoma City gets about 30 calls per week from people wondering about the price of services. If 30 patients were to call each week for a year, that would be 1,560 calls in a year. During the 2012 fiscal year, Mercy doctors performed 13,862 surgeries in Oklahoma City.
Health care and its pricing structure is complex, he said. It has been for decades because of how health care has evolved.
“So, because of that, when you hear something as simple as ‘They're posting their prices online,' I think people scratch their head and say, ‘Gosh, that sounds like a great idea,' but as you dig into it, there's a lot of caveats to those numbers online,” Vitiello said.
Vitiello said Mercy has plans to be more transparent about its surgery prices but couldn't be specific about anything the company is working on.
Consumer Price Line
Tim Johnsen, president of Integris Baptist Medical Center in OKC, said the accountability of health care pricing lies among health care providers to improve the process and ensure transparency.
Johnsen points to the Integris Priceline, a service Integris provides for its patients to call and obtain information about their charges.
Integris started the Consumer Price Line in 1996. About 1,000 calls per month are made from across the state to the service.
“It's my responsibility to make sure that our patients are fully apprised of what is expected at time of service, what we anticipate their charges will be, where deviations may occur because of a complication that was unexpected, like if we didn't know about a comorbidity that they had,” he said. “That responsibility does fall to the health care system. It falls to all of us.”
Johnsen said hospitals like Integris serve a larger population and offer a broader range of services than facilities like the Surgery Center of Oklahoma.
For example, Integris operates an emergency room and a burn center. Meanwhile, free-standing surgical centers “provide a great service to a niche market and particular diagnosis,” he said.
“It is a complete apples and oranges comparison, and neither fruit is bad,” Johnsen said. “It's just a different fruit.”