Saving Money And Saving Lives With Dr. Keith Smith

This episode of What’s Ahead examines a miracle in U.S. healthcare today and its exciting implications for the future: the Surgery Center of Oklahoma, which treats thousands of patients each year at a fraction of the cost of traditional hospitals.

For example, a tonsillectomy that might cost $14,000 at a typical hospital will set someone back around $3,000 at the center. Outcomes are as good and often better there than at other hospitals; surgeons are board-certified, and patient-satisfaction is high. What’s more, the center posts all of its prices online, and if the actual expenses for an operation go above the posted quote, the hospital eats the difference.

You’ll want to absorb the insights and lessons of Dr. Keith Smith, cofounder and managing partner of this unusual institution. 

Key to the center’s success is the fact that it doesn’t take payments from insurance companies or from the government. A patient pays upfront, but the prices are so low that a patient ends up saving money, especially with today’s high deductibles.

There is no bureaucratic bloat at the center. 

These reasons are why patients come to the center from around the country and from Canada. Although healthcare is free in Canada, many people there don’t want to wait for months or years for certain surgeries. 

Keith argues forcefully that what the Surgery Center of Oklahoma does can be replicated across the healthcare spectrum.

Imagine that—more and better medical care at less cost!

Importance of gaining control

“I started my practice and began to find very quickly that the hospital administrators were not my friend; they were actually my enemy. And, even worse, they were the financial adversary of many of the patients that entered their doors. And I found myself having to acknowledge that I was truly an accomplice, an accessory to a financial crime. And a lot of the surgeons that I worked with came to the same conclusion, that we were actually tools in an enterprise meant to financially devastate patients that came through the door. So, I didn’t sign up for that, that was not philosophically what I wanted to do. And the only way to escape becoming a, really, a financial adversary of patients was to gain control over the institution.

“Most physicians, I think, embrace the concept of mutually beneficial exchange. I think this hit-and-run mentality is the one at most hospitals in the United States, particularly those who claim to not make a profit. So, walking away and establishing our own facility, where we had control over what patients were charged, including not charging them at all, was the only way for us to escape a situation where we felt horrible for being actually even involved in patient care.”

To Do What’s Right for the Patient

SF: “Now, advice that you give to medical students. You say, ‘Never work as a salary employee of a hospital.’ You may do a residency or something like that, but whatever you do, don’t become an employee of a hospital. Why?”

Smith:  “I tell medical students that because the dilemma of ‘Do I do what’s best for this patient in front of me, or do I do what’s best for my employer?’ is inevitable. It will happen, and no physician should ever, ever be in that position. But it is simply a matter of time before the interests of the patient collide with the interest of the employer. For instance, a patient needs their gallbladder taken out, and this hospital-employed internist or family medicine doc, they know they have to refer to the general surgeon at that hospital, whether he’s any good or not. God help them if they refer to an outside surgeon, outside of the family as I say, who really is good at that surgery. They will be held to account for stepping out of line. And no physician should ever be in the position of doing anything except what is exactly the right thing for their patients.” 

Cheaper and better

“I remain optimistic. Cheaper and better is a very, very powerful idea. I think it’s difficult for my competitors, I think it’s impossible for government, it’s very, very difficult for government to argue against cheaper and better. And so I remain optimistic, because I believe the market is both powerful and beautiful. It’s a wonderful, wonderful thing, and it will not be completely stamped out. I don’t see the threat materializing in my lifetime that we would be in a situation where the American people have to put up with a DMV-like service for their medical care.”