Innovative, unique, even revolutionary: Surgery Center of Oklahoma

By Patrick B. McGuigan | Oklahoma Watchdog

OKLAHOMA CITY — A free market alternative for public employees begun here has the potential to save taxpayers billions of dollars nationwide and revolutionize the way Americans pay for their health care.

Oklahoma Watchdog.org first reported on the agreement this past Monday.

Devon Herrick, global health policy fellow at the National Center for Policy Analysis in Dallas, told Oklahoma Watchdog.org the agreement for the Surgery Center of Oklahoma to provide lower cost medical procedures to Oklahoma County employees is innovative and potentially revolutionary.

“The bottom line is taxpayers (and employers) desire to get value for what it spends on health benefits,” Herrick said. “The best way to do that is to align the incentives of workers and taxpayers (and employers). Consumers will seek out these bargains if they are given the appropriate incentives and the tools to do so.”

The Surgery Center drew national attention two years ago, when it became the first hospital group in the country to set and disclose to patients the cost of each of its medical procedures.

Prices for Surgery Center procedures are generally a fraction of those of competing hospitals that bill through traditional health insurance.

Watchdog.org recently calculated the cost of 10 surgeries through late March at the Surgery Center at a total of $58,565. Comparable cost at other hospitals for those 10 procedures would have been over $200,000.

Should hospitals across the country offer competitive pricing to local, county and state employees with health care coverage underwritten by taxpayers, the cost savings could be in the billions of dollars.

Traditionally, health plans allowed enrollees to go anywhere for care with little regard for costs, Herrick said. By contrast, the Surgery Center offers a cost incentive alternative for quality care, he said.

“If more employers would reward enrollees for choosing a place like the Surgery Center of Oklahoma, within a short while other hospitals and providers would begin to match the prices,” Herrick said.

Katherine Hempstead, a health care specialist with the Robert Woods Johnson Foundation in Princeton, N.J., the nation’s largest health care philanthropy, said the Surgery Center’s deal with the county exemplified two important trends: “The increasing propensity of large employers to negotiate directly with providers and the growing role of public employee health plans as sources of innovation in cost containment.”

Jordan Bruneau, a Washington, D.C.-based health care writer, applauded the new agreement, saying, “Doctors leaving the system and just using the market are the future/savior in my opinion.”

Tarren Bragdon, president of the Foundation for Government Accountability in Florida, said the Oklahoma agreement was the first time he had learned of “a county or state government offering such an option to employees.”

Jon Wilkerson, the county’s benefits coordinator who helped close the Surgery Center deal, called the agreement unique for a government entity. The county government is “also kind of unique in being self-funded. [Surgery Center of Oklahoma] is close so we have the ability to simply send people to them for care. I am not aware of any similar agreement anywhere in the country.”

“We added this as an optional benefit for covered employees, retirees and eligible dependents on our self-insured health plan, and waived any out-of-pocket costs if they choose to have their surgery at the Surgery Center,” Wilkerson said.

Jonathan Small, policy vice president at the Oklahoma Council of Public Affairs, said he is pressing the state government to establish similar agreements with Surgery Center.

You may contact Pat at pmcguigan@watchdog.org .