Competition keeps health costs down

Editor’s note: This is the third in a series of three editorials on Canada’s health care system. It is provided by editorial writers of The Colorado Springs Gazette.

Most middle-aged Americans and seniors remember when a simple phone call from one town to another posed a financial burden. A monopolized telecommunications industry controlled long-distance prices, which were outrageous.

Mature Americans also remember when only the rich traveled regularly by air — during the days of intense airline regulation. It wasn’t long ago that only the rich could afford cell phones, calculators, digital watches and various other gadgets.

In the United States, minimally regulated competition has given people of average means easy access to travel, mass communication, interpersonal long-distance communication, and computing power considered pie-in-the-sky science fiction just decades ago.

Competition drives prices down, while driving up options and quality. Enhanced competition, says one innovative physician from Oklahoma City, should be the centerpiece of any plan to overhaul health care in the United States.

Dr. Keith Smith, an Oklahoma City anesthesiologist, grew tired of big medicine’s big bureaucratic ways.

He disliked the third-party payer system that distorts price considerations in the practice of medicine. He decided he had seen enough of big hospitals, clinics, and PPO “price cartels” manipulating the costs of surgeries and other common and relatively simple medical procedures Americans need. He considered it an absurdity each time a patient’s insurance company paid $9,000-plus for a simple tonsillectomy that took 10 minutes to perform.

Smith decided the best way out was to open a private clinic that would compete for patients who wish to pay with cash, or have high-deductible health care policies, or belong to corporate self-insurance pools looking to cut costs. He wanted to lure patients who care about cost.

Smith opened the Surgery Center of Oklahoma, a massive facility owned by him and about 40 other anesthesiologists and surgeons. They attract business to the clinic by dramatically undercutting the prices of big monopoly hospitals and clinics.

Prices for various procedures are transparent, simple, and posted online. Each price is the final price, consisting of fees for the surgeon, anesthesiologist and the facility.

The clinic has become a resource favored by Canadians seeking life-saving treatments they can’t get in their own country without waiting months, or years, risking death as they wait.

No price on the list spells financial ruin, as the highest price is the $9,000 lumbar laminectomy. A mastectomy is $4,550, and most procedures are well below $4,000.

Canadian medical tourists have found that just getting a quote from the Surgery Center of Oklahoma gives them bargaining power with hospitals and clinics closer to home.

The center’s prices are at: www.surgerycenterok

Smith believes growing numbers of physicians are tired of working in the old system. Doctors who come to work at his clinic quickly come to love their jobs again. If his model of competitive price transparency ever catches on, Smith believes it will solve America’s health care crisis by creating a national environment of deflationary medical pricing.

Conservatives, libertarians and independents need to focus on establishing a package of medical reforms that will remove artificial barriers that impede private startup clinics, such as the Oklahoma Surgery Center, in most states. They need to advocate for the elimination of “certificate of need” laws that empower legislatures in most states to forbid private, startup medical facilities — thus promoting monopolies. They need to propose changes to the tax code that will undo the incentives for a health care system centered on insurance monopolies.

Free competition has served Americans well in most aspects of their lives. It has facilitated an abundance of luxuries once unimaginable.

Free competition and transparent pricing can do the same for medicine, if only we allow it by centering medical reform on an agenda of responsible, pro-competition deregulation measures.