#392 2009 · Surgery Center of Oklahoma · Healthcare / outpatient surgerylegibility
In an industry where no patient can learn the price of surgery before agreeing to it, this surgeon-owned center just put every price on its website — and let customers shop.
the problem
buyers in a market cannot compare prices before committing because sellers never disclose them upfront
background
In US healthcare, prices for surgery were and largely remain invisible to patients before treatment: hospitals negotiate different rates with each insurer under confidentiality clauses, bills arrive itemized and inflated relative to what insurers actually pay, and a patient asking 'what will this cost me' before agreeing to a procedure typically could not get a straight answer. This opacity protected every incumbent hospital simultaneously — none had to compete on price because no patient could compare prices to begin with.
Dr. Keith Smith, an anesthesiologist and co-owner of the physician-run Surgery Center of Oklahoma, had watched this system from the inside for years and concluded the lack of price transparency was itself the reason the market showed none of the cost discipline of a normal market. Rather than lobby for regulation to force disclosure industry-wide, he decided a single surgery center could just publish its own real numbers and see what happened.
the move
Starting in 2009, the Surgery Center of Oklahoma posted a single, fixed, all-inclusive price for each procedure directly on its public website — surgeon's fee, anesthesia, facility fee and post-op care bundled into one number a patient could see and compare before ever calling the center, with no insurance billing, no negotiation and no surprise balance afterward.
the payoff
The posted prices ran routinely at a fraction of what comparable hospitals charged — often cited at 6 to 10 times lower — and stayed largely stable for over a decade rather than rising with the rest of the industry. Self-funded employers began flying employees across state lines for lower-cost surgery at the center, and international patients, including Canadians facing long domestic wait times, started showing up directly off the strength of the published prices alone.
what came after
The Surgery Center of Oklahoma's price list became the reference case cited in US healthcare-price-transparency legislation and congressional testimony, and its model — physician-owned, insurance-free, prices published before treatment — has since been replicated by direct-pay surgery centers and clinics nationwide as evidence that voluntary transparency, not just mandated disclosure, can move an opaque market.
filed under
references
- [1]Transparent Health Care Pricing: Keith Smith and the Surgery Center of OklahomaMercatus Center, 2024mercatus.org
- [2]Physicians Taking Back Medicine: Keith Smith, M.D., and the free market revolution in surgeryMedical Economics, 2023medicaleconomics.com