Transcript:

 

Dr. Tea  0:01  

Practicing medicine without insurance is possible. Imagine a private practice where you get to see your best patients every day, providing medical services you truly enjoy, all without the hassle of insurance. My name is Dr. Tea Nguyen, and I'm a recovering specialist who was completely burned out from insurance based medicine. I pivoted into direct care, where patients pay me directly for my medical services, and have never looked back. If you're a private practice owner or planning to become one who's looking to be free of the grind of insurance and you're craving it, simplicity, efficiency and connection with patients, you are in the right place. This podcast will help you map out your exit plan and uncover the mindset needed to thrive in today's economy. Welcome toThe Direct Care Podcast For Specialists.

 

Dr. Tea  0:53  

A surgery center that posts their prices for the public to view. Surgery Center of Oklahoma makes it easy for patients to be financially prepared. And is that weird? I hope someday that it's not, but in today's healthcare climate, it's completely unheard of until now. So please help me welcome today's guest. Dr Keith Smith, Welcome!

 

Dr. Keith Smith  1:15  

Thanks for having me. 

 

Dr. Tea  1:17  

I was just browsing your website. First of all, it's beautiful and it's so easy to navigate, and the mission is just so clear, and I just wanted to read what it says here, independent, free market surgery center with transparent web display pricing, exclusive board certified medical staff and business model that has attracted self insured companies, the uninsured and medical refugees, Canadian, a completely physician owned and controlled facility emphasizing unsurpassed quality of care and service with low market based pricing. First of all, when I read your website, I see that you put on your first page the nation's lowest infection rates, 0% in 2021versus 2.6% average. I have so many questions. I don't even know where to start, but first, why don't you introduce yourself and tell us how you got here? 

 

Dr. Keith Smith  2:12  

Well, I'm G. Keith Smith. I'm a board certified anesthesiologist, and have been in private practice since 1990. In 1997 walked away from, I think what anyone would characterize is a very successful practice. Just discussed it with, with everything at the big hospitals I was involved in. We knew a fellow anesthesiologist, and I Steve lantier, he and I both knew now the hospitals were grossly overcharging patients to whom we were providing anesthesia services, and we we knew that this service could be much more efficient, and therefore patients could be charged less and receive what we thought better care. So cheaper and better was was a good draw for us as a mission and a model. And we found a surgery center that was in trouble, that was in financial trouble and were able to purchase that actually on a hunting trip, which is another story. And we, we started operating the surgery center of Oklahoma in May of 1997. we, we had a very simple mission. Our mission was to never do business of any kind or accept money from the federal government, and our other mission was to provide patients with the highest quality care possible at an affordable price, and to make sure they knew what they would pay us prior to their arrival. We really didn't know how radical that was at the time, but that that was our mission statement, essentially. And we we've been wildly successful with that model in 2009 and I decided, in an even more radical move, in hindsight, to post all of the prices we were quoting over the phone, on a on a website, and that's essentially what you see if you look at our website. Those are all inclusive prices, surgeon, anesthesia, facility, pathology, everything. 

 

Dr. Keith Smith  4:34  

And I decided to do that in 2009 with three goals. One was to make ourselves more visible to buyers of care that had sticker shock, whether that was, say, an individual, a Canadian, person that had insurance, but who's in whose deductible was very high and. A cost sharing ministry, self funded health plan. Those people all have sticker shock. They actually care what it costs. The other goal I had was to start a price war so that patients that were not near Oklahoma City could use my pricing to leverage a better deal in their hometown, wherever they were from, that that goes on regularly, and lawyers have actually used my pricing in the courtroom to to make an argument for price gouging by a hospital that is financially assassinating a patient. And then the third goal I had was to try to understand some of the scams at work, because cheaper and better in the United States is something that that will bring most industries success individuals that figure out a cheaper and better way to do things typically do very, very well as they satisfy that customer preference to do, to do things cheaper and better more efficiently. That's not the case in this medical industry, in this cesspool, you actually make more money to the extent that you that you dial in on the dysfunction, there are a lot of people dysfunction vendors who actually drive the price of care up and make more money to the extent that it becomes more expensive, whether it's a broker whose commission is a function of how high the premium is. Well, they want premiums to be high that way their commissions are maximized, and they don't want any part cheaper and better. That's not good for high premiums. And so my third goal, I wanted to better understand, you know, what was wrong, and I don't pretend to understand everything that's wrong. There's so much that's wrong. You couldn't make a list, but, but, I would argue all three of those goals have been, have been achieved, and achieved in a much more, much more successful way than I had any idea they would be when I posted that website. 

 

Dr. Tea  7:25  

You mentioned offering cheaper and better medical care, and I think there's a fine line with defining what cheaper means, versus affordable versus what's happening in insurance. So you've proven that because of price gouging, it's actually not necessary that it's cheaper, that equates to cheaper quality of care. You've proven that, because of your low infection rates down to 0% you are not only more affordable than insurance options, but you're providing better care. Was that just one of your metrics, or was that something that was routinely measured? 

 

Dr. Keith Smith  8:05  

Well? This is counterintuitive. Actually, most people would think who get what you pay for and in a functioning market or market economy, that is true to a large extent, not 100% but mostly true in a dysfunctional economy. It is not true at all in a dysfunctional economy like the highly regulated one that is almost completely controlled by the government in the United States, the higher the price is all. All that means is that there's not much competition going on. Where you have prices that are lower means there is competition, somebody's in there mixing it up, and different competitors are challenging each other. And when they do this, they can't just challenge each other on how much it costs. They have to also challenge each other on quality and on patient experience. So if you let market competition work, prices tend to fall and quality tends to soar. If you see very high prices in the United States, that generally means that there's not much competition going on and and if you're a big hospital system, and you're not worried about competition, you're not worried that the care you provide has to even be any good. You know you're going to get all the patients in the referrals anyway. So it's a little counterintuitive, but the truth is, the lower the price, in all likelihood, the higher the quality. And my friend Jeff Rice, who founded Healthcare Bluebook, has confirmed this. If you see. low prices. That means someone actually has confidence in their outcomes being so good, they're not really concerned that their inefficiencies or that things are not going to go well. That's why we don't perform all types of surgery at the surgery center of Oklahoma, and if I don't have access to surgical talent that can perform a certain procedure, we just don't do that procedure. We don't go ahead and perform that procedure poorly, because that would stain our reputation as a high quality facility, and we live and die by our reputation and word of mouth and referrals. I don't have contracts with any carriers. We do not deal with Medicare or Medicaid. So people don't come to the surgery center of Oklahoma because we're in their network. They come here because they want to come here, and they want to come here because of our reputation. So if someone really knows what they're doing, they're pretty confident about putting a price on it. If they have a lot of uncertainty about whether they know what they're doing or not, then the price is either going to be unavailable or extremely high. So that's a long answer to why cheaper and better does not apply in this industry, but I found that to be true.

 

Dr. Tea  11:31  

That's a really great breakdown, because there's always a concern amongst direct care doctors that if I lower my price, their perception is lower value. But you're saying it's the opposite, because the market's dysfunctional, and so we just have to do the opposite of what's happening, offering a lower price, but equally higher value. 

 

Dr. Keith Smith  11:51  

Well, there is some truth in that. Whenever, whenever, when I posted the website in 2009 it was met with a lot of skepticism. You know, how in the world can you perform Laparoscopic Cholecystectomy for $5,865 all in what's wrong? Where are you cutting corners? So there were a lot of patients that asked a lot of questions, and there were naysayers who, you know, who used that to hurt our reputation. You know, they're, you know, they're obviously, you know, cutting corners. And you know, are, you know, are they wearing gloves? You know, I saw all kinds of stuff on social media, you know, making fun of us because the prices were reasonable, and it's probably a good time to tell you how I came up with these prices. So I start by asking the surgeon, how much do you want? It's the opposite of Blue Cross or United where, who tells them how much they're going to pay them,and really pathetic amounts these carriers routinely will pay an urine, nose and throat surgeon less than $400 for a tonsillectomy. And that's insane. That's a high risk operation. I mean that in the right hands, and you want to be in the right hands having something like that. That's not nearly enough payment. The last open heart surgery I provided an anesthetic for in 1992 I was paid less than $300 by Medicare. Well, you that's just crazy. I mean, everybody knows that's crazy. So I start by asking the surgeon, how much do you want? And then I look at the surgery center as time and materials. You know, how long will this take, and what are the cost of supplies required to perform this procedure? And there's an anesthesiologist I basically bill for my time. That's not entirely true, but that's mostly true. So you add those things up and you come up with a price, and that's how I come up with our pricing. It's really very simple. And the hardest thing about that method was keeping it simple. Now we're so brainwashed to over complicate things, the hardest thing was just keeping it simple. So post of these prices met with a lot of skepticism, and I didn't change them. I didn't change the prices until two years ago, and for the first time since 1997 I changed the prices. That's not entirely true, because I lowered several prices in that time period, but I finally had to succumb to inflation and raise our prices across the board. Two years ago and we got busier, so to your point there, there was some skepticism that vaporized when our prices went up and I was I. I was astonished. I had suspected that might happen, but it really did. I mean, I increased prices and we got busier, and so I'm not inclined to increase them again for that reason, to get busier, because, you know, the higher the prices are, the farther out of reach is the affordability of the care for the person who's living on the margin. 

 

Dr. Tea  15:24  

That's incredible to hear that you raised your prices and then you got busier. That's just a different kind of math. What I would say

 

Dr. Keith Smith  15:33  

so the specialist that's worried that if I lower my prices, I'll be seen as less valuable or desperate. I can't argue with that. I think that you can make a compelling case that that's that, that is true. Maybe they should raise their prices and get busier. 

 

Dr. Tea  15:50  

So I wanted to ask about the logistics about the doctors that you have on staff. How many do you have on staff right now? Of all the specialties

 

Dr. Keith Smith  15:59  

Currently, there are 129 surgeons that work at surgery center of Oklahoma covering almost all specialties, Gynecology, general surgery, urology, orthopedics, ophthalmology, I'm leaving I'm leaving Some out. It's basically everything. We do not perform cataract surgery here. there are, there are three locations in our area that do perform cataract surgery, and do so for a price and quality that I don't think I can compete with. So we just don't do we just don't do that. Yeah, we do lithotripsy. We do cochlear implants, total knees totally up. So shoulders. Three of the four anesthesiologists here, myself included, are fellowship trained in pediatrics, so we're real comfortable with pediatric surgery and anesthesia, and so anyhow, that it's a it's a wonderful place. We don't have an administrator. You're, you're talking to him, and it's just, it's very nimble. If a surgeon said, Oh, we do spine stuff, if a surgeon says, I need, you know, a new piece of equipment, we just order it that that's, there is no committee, you know, that meets and tries to decide, you know, can we do this? Is it in the budget? None of, none of that kind of bureaucratic stuff that slows things down. None of that happens here.

 

Dr. Tea  17:40  

Of your 129 surgeons there, do they all practice without insurance?

 

Dr. Keith Smith  17:47  

No. And I want to be clear, you know, there's malpractice insurance, and everybody has that, but no, the surgeons that work here all deal with insurance companies outside of Surgery Center of Oklahoma. But the Surgery Center of Oklahoma as a facility, does not have any carrier contracts and does not deal with Medicare or Medicaid. And the surgeons that work here are all independent of the Surgery Center of Oklahoma, high employees, no surgeons. 

 

Dr. Tea  18:21  

So if a doctor, if a surgeon, takes these insurance contracts and they bring patients to your facility, does that mean that the doctor bills their insurance for their services and then you just charge the patient cash to utilize your facility? 

 

Dr. Keith Smith  18:35  

Yes. So if a patient has Blue Cross, Blue Shield, and they have an $8,000 deductible, and they require a procedure, the all inclusive price for which at my facility is 3000 then the surgeon will bring them to the Surgery Center of Oklahoma, and they will pay for the anesthesia and the facility. And then the surgeon will bill the insurance carrier. So that's exactly how it works. If someone has insurance, if someone does not have insurance, or they're a member of a cost sharing ministry or a self funded health plan, those arrangements are different. I'm not a businessman, I'm an anesthesiologist, but my friends who are businessmen told me the smartest thing I did when I posted the website was establish a payment clearing house. So I I always try to put myself in the shoes of the patient as I look at the the medical aspect of their care and also the financial aspect of their care, and it occurred to me that a patient was not going to want to write three checks, one to surgeon, one to anesthesia, one to facility. They would want to just pay one time so to accommodate what I perceived would be that buyer preference. I established a payment clearing house, and it's called Atlas billing company. It has its own website and pricing, but Atlas billing company was the entity to which a payment would be made by a patient cost sharing ministry, self funded plan, and so Atlas billing company receives the all inclusive payment, and then Atlas pays the surgeon in a season facility. So that way it's really easy for the buyer. The buyer just writes one check or makes one payment or one wire, and then those funds are dispersed amongst those who provided the care, and so Atlas billing company is actually helping other facilities implement bundle payments. So there are surgery centers in the United States, there are hospitals in the United States who cannot wrap their minds around everything that you and I have talked about in the last 24 minutes. They cannot imagine receiving a payment, cash, wire, cashier's check, Bitcoin, you name it. They cannot imagine receiving that payment and then paying the surgeon, anesthesia, facility, pathology, you know, and all fill in the blank. So Atlas billing company is a clearing house, receiving payments on behalf of those hospitals by the various payers and employers that we deal with. So if somebody lives, far, you know, outside of Oklahoma City, but they need a procedure, and it's at, you know, they want to have it at an area hospital. I will call the CFO of that hospital and see, you know, do they want to provide a price for this robotic prostatectomy or do they want the patient to get in, get on an airplane, fly to Oklahoma City and have it done? And usually we can work something out. And of course, they'll say, We have no idea how to implement this, so I know you don't just give me your price, and then I'll deal with the anesthesia and the surgeon. So we've been able to establish relationships outside of Surgery Center of Oklahoma, using the Atlas billing company as a clearing house, and that has helped people join what we call this free market movement. 

 

Dr. Tea  22:34  

How do we have other surgery centers get on board? Because there's a huge need for this kind of care, this transparency. And I just wanted to read out your website where it says, at Surgery Center of Oklahoma, we believe transparent pricing is the only way to be compassionate and honest caregivers. This is something that I deeply resonate with. People are really funny about pricing of things, and I feel like if we allow patients the freedom to financially, choose financially, be prepared, it is the most compassionate thing we can do for patients. And so in my eyes, I think there's a huge need for surgery centers. Are there others doing it? Like you? 

 

Dr. Keith Smith  23:13  

Yeah. And to answer your question, there are two things people can do to get on board. One is to consider joining the Free Market Medical Association. That is the resource people can plug into to really wrap their minds around getting involved in this movement. The other thing I suggest to people, if they can't figure out how to implement bundles, surgical bundles like this and with transparent pricing, is to contact me. I will help them with my Atlas billing hat on, and then when they figure it out, they can kick me to the curb and do it on their own, so that that's really a way, kind of a baby steps way to get it done. And yes, there are people that are copying us, and all of them, generally, I have helped. I mean, there may be somebody out there doing this that I've not had contact with, but I sort of doubt it.Wellbridge Surgery Center in Indianapolis, Renovo Healthcare in Wisconsin, Veritas Surgery in Idaho. Those are just three examples, but they are Smith Medical Holdings in Denver. Those are just examples of entities that I have helped, that are doing, doing their own thing and I'm learning from them. Now, may not I was happy to help. You know, people copy us, but you know they're, they're smart, smart folks, and they're teaching me. Now.

 

Dr. Tea  24:57  

Do you think this model is possible in a place like California when the cost of living is extraordinarily high? 

 

Dr. Keith Smith  25:02  

Oh, yeah, yeah. In fact, I would say that physician entrepreneurialism in California is as strong or stronger than any place in the country that I can think of. Maybe other than Oklahoma, there's a plastic surgeon in Torrance, California, who is actually, I'm blanking on his name right now, but he's actually allowing his plastic surgery suite to be used for non plastic surgery procedures with transparent pricing. So there's a Hernia surgeon in Vegas. There are a couple of orthopedists in Vegas that are making their pricing transparent. So, you know, this is a movement that is spreading all over the country, and I think people are just now beginning to take notice of it. People ask me, Why isn't this movement more advanced? Why aren't more people doing this? And I respond, it's astonishing that anyone is doing this. I mean, the headwinds in this industry are so strong, it's remarkable. It's shocking that this is happening at all, and not just happening, but growing, and I think, at a very rapid rate. 

 

Dr. Tea  26:21  

Well, thank you so much for your insight. If people want to connect with you, what's the best way?

 

Dr. Keith Smith  26:27  

The best way with me is just my email. It's  KSmith @ our website, surgerycenterok.com ([email protected]). We're on Facebook and Instagram and Twitter now LinkedIn. We're out there. Happy to be happy to connect with anyone. 

 

Dr. Tea  26:51  

Any last words for the listeners who are most likely doctors interested in direct care, and many are surgeons as well.

 

Dr. Keith Smith  26:59  

Yeah, I would encourage people to get their toe to toe wet, investigate this movement, and it's okay to have a hybrid approach. That's how we started. We didn't just start as cash only. If you have a practice that's got a lot of Medicare and a lot of insurance, you can still do this, and then as your cash approach and method and practice improves, then you can begin to wean yourself off the insurance carriers. I would start by weaning yourself off of Medicare and Medicaid, if that's in your practice, and then slowly, wean yourself off of the insurance carriers. It's probably reckless to just jump off the cliff into cold water and do what I'm doing cold turkey. And I don't recommend that. I think that's reckless. But I think, I think it's time to begin to investigate, how do I accommodate the sticker shock cash buyer,

 

Dr. Tea  28:02  

I like how you said wean off as if we are on an addiction cycle, and it very much is that we are very addicted to using insurance, accepting it, and having conversations around it. But that is some great advice. Thank you so much for your time.

 

Dr. Tea  28:18  

If you enjoyed this episode, please give it a review and share it with a friend so more doctors can learn about Direct Care. Let's keep the conversation going on LinkedIn so we can help more doctors escape insurance and thrive in private practice. Thanks for listening. I'll talk with you next time, take care you.