The continued existence of this site depends entirely on contributions from its readers. If you're able to, please consider donating or subscribing to CF. Thanks!



Back to the future

If you build it correctly, it will work, to turn a phrase. Even a health care system.

More and more doctors across the country want to reduce costs and bring price transparency to the system. In 1997, anesthesiologist Keith Smith left his hospital job and opened the Surgery Center of Oklahoma (SCO) in Oklahoma City. “I wanted to see if markets could actually work in our convoluted health care system,” he told me. “I didn’t want to be an accessory to a crime anymore. Our mainstream system is criminal because of the way it fails to prioritize the care of patients.”

During his first week in business, Smith got a call from a woman needing a breast biopsy. She asked him how much the procedure would cost at his clinic. He had no idea—no one had ever asked before. Smith called his surgeon and the testing lab for a quote, calculated his own cost for the 20-minute procedure, and gave her the estimated price—which ended up being well within her deductible, and a fraction of the price she was given when she pressed a local hospital for an estimate. Smith and his team decided to bundle prices for all their procedures and then made the radical move of posting the full costs on their website.

Almost immediately, Oklahoma hospitals, insurance companies, and legislators went on the offensive and tried to shut down SCO. Insurance companies made it mandatory for consumers to meet their deductible with in-network providers: if they went out-of-network to get a service, their deductible would reset to zero for the year. This made SCO’s otherwise-affordable services cost-prohibitive for many patients with insurance. The center’s waiting room emptied.

But SCO quickly discovered other types of consumers, such as companies with self-funded health-insurance plans, as well as international patients. Employers with self-funded plans take on the financial risk of providing health-care benefits to their employees instead of paying premiums to health-insurance companies like Aetna or Anthem. Though it’s generally larger companies that self-insure—Wal Mart is a well-known example—high costs in health care are driving smaller companies, including those with as few as 50 employees, to move in this direction as well. Self-insured employers have incentives to keep costs down, even if it means flying their employees for out-of-state treatments.

When self-insured companies from across the country learned that procedures at SCO cost a fraction of the bill at most other medical institutions, they began offering their employees incentives to go there, including stipends, paid time off, and even covering the cost for a friend or family member to accompany them. SCO also saw an influx of customers from Canada and Europe. Though these patients had government-funded coverage, delays in treatment for urgent conditions led them to pay out of pocket for treatment at SCO.

GREAT quote coming right up:

“Some people say that health care is too important to leave to markets,” Smith says. “I say it’s too important to leave to government!” Without the pressures of the market, Smith is convinced that there is no accountability and no incentive for health-care providers to pay attention either to value or quality.

Annnnd bingo, we have a winnah! Good on ya, Doc. But isn’t it remarkable how such plain, obvious common sense can sound downright radical to modern ears—and how we find ourselves going back to first principles to re-engineer a humane, functional health care system that will doubtless end up closely resembling the one we had until the government stepped in to screw the old one up so horribly?

2 thoughts on “Back to the future

  1. Everything important should be left to markets.
    Government should be about Rule of Law and enforcement, and laws should be difficult to make, beyond the couple hundred laws most of us can agree upon.

    1. I think about 25 federal laws would be plenty. And everyone should apply double to government members, hired or elected.

Comments are closed.

Latest Posts

Latest Comments

CF Archives


Comments policy

NOTE: In order to comment, you must be registered and approved as a CF user. Since so many user-registrations are attempted by spam-bots for their own nefarious purposes, YOUR REGISTRATION MAY BE ERRONEOUSLY DENIED.

If you are in fact a legit hooman bean desirous of registering yourself a CF user name so as to be able to comment only to find yourself caught up as collateral damage in one of my irregularly (un)scheduled sweeps for hinky registration attempts, please shoot me a kite at the email addy over in the right sidebar and let me know so’s I can get ya fixed up manually.

ALSO NOTE: You MUST use a valid, legit email address in order to successfully register, the new anti-spam software I installed last night requires it. My thanks to Barry for all his help sorting this mess out last night.

Comments appear entirely at the whim of the guy who pays the bills for this site and may be deleted, ridiculed, maliciously edited for purposes of mockery, or otherwise pissed over as he in his capricious fancy sees fit. The CF comments section is pretty free-form and rough and tumble; tolerance level for rowdiness and misbehavior is fairly high here, but is NOT without limit.

Management is under no obligation whatever to allow the comments section to be taken over and ruined by trolls, Leftists, and/or other oxygen thieves, and will take any measures deemed necessary to prevent such. Conduct yourself with the merest modicum of decorum, courtesy, and respect and you'll be fine. Pick pointless squabbles with other commenters, fling provocative personal insults, issue threats, or annoy the host (me) won't.

Should you find yourself sanctioned after running afoul of the CF comments policy as stated and feel you have been wronged, please download and complete the Butthurt Report form below in quadruplicate; retain one copy for your personal records and send the others to the email address posted in the right sidebar.

Please refrain from whining, sniveling, and/or bursting into tears and waving your chubby fists around in frustrated rage, lest you suffer an aneurysm or stroke unnecessarily. Your completed form will be reviewed and your complaint addressed whenever management feels like getting around to it. Thank you.

Ye Aulde CF Blogrolle–now with RSS feeds! (where available)

"Mike Hendrix is, without a doubt, the greatest one-legged blogger in the world." ‐Henry Chinaski

Subscribe to CF!

Support options

Shameless begging

If you enjoy the site, please consider donating:

Become a CF member!


Email addy: mike-at-this-url dot etc
All e-mails assumed to be legitimate fodder for publication, scorn, ridicule, or other public mockery unless specified as private by the sender

Allied territory

Alternatives to shitlib social media: A few people worth following on Gab:

Fuck you

Kill one for mommy today! Click to embiggen

Notable Quotes

"America is at that awkward stage. It's too late to work within the system, but too early to shoot the bastards."
Claire Wolfe, 101 Things to Do 'Til the Revolution

Claire's Cabal—The Freedom Forums


"There are men in all ages who mean to govern well, but they mean to govern. They promise to be good masters, but they mean to be masters."
Daniel Webster

“When I was young I was depressed all the time. But suicide no longer seemed a possibility in my life. At my age there was very little left to kill.”
Charles Bukowski

“A slave is one who waits for someone to come and free him.”
Ezra Pound

“The illusion of freedom will continue as long as it’s profitable to continue the illusion. At the point where the illusion becomes too expensive to maintain, they will just take down the scenery, they will pull back the curtains, they will move the tables and chairs out of the way and you will see the brick wall at the back of the theater.”
Frank Zappa

“The right of a nation to kill a tyrant in case of necessity can no more be doubted than to hang a robber, or kill a flea.”
John Adams

"A society of sheep must in time beget a government of wolves."
Bertrand de Jouvenel

"It is terrible to contemplate how few politicians are hanged."
GK Chesterton

"I predict that the Bush administration will be seen by freedom-wishing Americans a generation or two hence as the hinge on the cell door locking up our freedom. When my children are my age, they will not be free in any recognizably traditional American meaning of the word. I’d tell them to emigrate, but there’s nowhere left to go. I am left with nauseating near-conviction that I am a member of the last generation in the history of the world that is minimally truly free."
Donald Surber

"The only way to live free is to live unobserved."
Etienne de la Boiete

"History does not long entrust the care of freedom to the weak or the timid."
Dwight D. Eisenhower

"To put it simply, the Left is the stupid and the insane, led by the evil. You can’t persuade the stupid or the insane and you had damn well better fight the evil."

"There is no better way to stamp your power on people than through the dead hand of bureaucracy. You cannot reason with paperwork."
David Black, from Turn Left For Gibraltar

"If the laws of God and men, are therefore of no effect, when the magistracy is left at liberty to break them; and if the lusts of those who are too strong for the tribunals of justice, cannot be otherwise restrained than by sedition, tumults and war, those seditions, tumults and wars, are justified by the laws of God and man."
John Adams

"The limits of tyranny are prescribed by the endurance of those whom they oppress."
Frederick Douglass

"Give me the media and I will make of any nation a herd of swine."
Joseph Goebbels

“I hope we once again have reminded people that man is not free unless government is limited. There’s a clear cause and effect here that is as neat and predictable as a law of physics: As government expands, liberty contracts.”
Ronald Reagan

"Ain't no misunderstanding this war. They want to rule us and aim to do it. We aim not to allow it. All there is to it."
NC Reed, from Parno's Peril

"I just want a government that fits in the box it originally came in."
Bill Whittle

Best of the best

Finest hosting service

Image swiped from The Last Refuge

2016 Fabulous 50 Blog Awards

RSS feed

RSS - entries - Entries
RSS - entries - Comments

Boycott the New York Times -- Read the Real News at Larwyn's Linx

Copyright © 2024