Imagine scheduling a routine surgical procedure without knowing what it will cost. You receive treatment, return home, and weeks later discover a bill that bears little resemblance to what you expected. The surgeon charges one amount, the hospital another, and the anesthesiologist sends a separate invoice. Your insurance company may negotiate a different figure, leaving you wondering what the procedure actually costs.
For millions of Americans, this is not an unusual experience. It is how the healthcare billing system operates.
But what if medical care worked more like an ordinary marketplace? What if patients could compare prices, understand exactly what they were purchasing, and know the total cost before entering an operating room?
Dr. Keith Smith, co-founder of the Surgery Center of Oklahoma, has spent decades demonstrating that healthcare price transparency is possible. His approach challenges the conventional hospital billing model by publishing upfront, bundled prices for surgical procedures and allowing patients and employers to purchase medical care directly.
His experience raises an important question: Why should patients have to accept financial uncertainty when seeking medical treatment?
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Dr. Keith Smith: The Physician Who Challenged Medical Billing
Dr. Smith’s journey toward healthcare price transparency began in the early 1990s, shortly after entering medical practice as an anesthesiologist.
He became increasingly uncomfortable with what he witnessed inside traditional hospital systems. Even relatively minor surgical procedures could expose patients to enormous financial burdens.
He believed physicians should serve as medical advocates for their patients rather than participate in arrangements that left people financially vulnerable.
Smith eventually concluded that the only way to change the situation was to gain control over both the medical facility and the prices charged to patients.
In 1997, he co-founded the Surgery Center of Oklahoma with a like-minded anesthesiologist. Their objective was straightforward: create a facility where physicians could control the quality of care, establish reasonable prices, and build relationships based on mutually beneficial exchanges.
The center began with approximately 12 or 13 surgeons whom its founders considered competent and ethical enough to operate on themselves.
That principle remains central to Smith’s philosophy.
Today, according to the interview, the facility has approximately 145 surgeons on staff and provides a broad range of surgical services.
Posting Surgery Prices Online: A Radical Idea in 2009
One of the most significant decisions in the center’s history came in 2009, when Dr. Smith published its surgical prices online.
At the time, openly displaying medical prices was unusual. Healthcare providers generally operated through complicated agreements involving hospitals, insurance companies, negotiated discounts, and separate billing arrangements.
Smith recalled facing considerable skepticism when he first introduced public pricing.
Nevertheless, he believed patients deserved to know what they would pay before agreeing to treatment.
The Surgery Center of Oklahoma adopted an all-inclusive pricing model that combines several components into one upfront price:
- Surgeon’s professional fee.
- Anesthesiologist’s fee.
- Surgical facility charges.
- Applicable follow-up care.
Instead of receiving multiple bills from different providers, patients can see the combined price for an eligible procedure.
The center does not operate through conventional insurance contracts and, according to Smith, has never accepted Medicare payments.
Its approach is particularly attractive to uninsured patients, people with high-deductible insurance plans, self-funded employers, and individuals who prefer to pay directly for medical services.
The center’s official website provides access to its published surgical prices.
This is a fundamentally different way of purchasing healthcare: the patient knows the price before the procedure rather than discovering the financial consequences afterward.
Why Patients With Insurance Are Still Looking for Affordable Surgery
One of the more interesting observations in the interview is that having health insurance does not necessarily guarantee access to timely medical treatment.
Smith describes a growing number of patients who approach his facility after encountering insurance denials or authorization problems.
He gives the example of a patient with a serious meniscus injury whose insurer reportedly refused to authorize the procedure on medical-necessity grounds.
At the Surgery Center of Oklahoma, a similar patient received surgery the following day for approximately $4,500, including the surgeon, anesthesia, and facility charges.
The point is not simply that the procedure was less expensive. It is that the patient could obtain treatment without navigating an extended insurance authorization process.
Smith also describes patients traveling from Canada, where publicly funded coverage does not necessarily translate into timely access to elective procedures.
For these patients, direct purchasing can provide an alternative to waiting for treatment.
The broader lesson is that insurance coverage and actual access to healthcare are not always the same thing.
The Hidden Economics of Hospital Pricing
Why can the same surgical procedure carry dramatically different prices depending on where it is performed?
Smith argues that the traditional healthcare billing system has become disconnected from ordinary economic principles.
In a conventional marketplace, buyers generally know the price before purchasing a product or service. Sellers compete by offering better value, and customers can make informed comparisons.
Healthcare often operates differently.
Hospitals may publish chargemaster prices that bear little resemblance to the amounts ultimately negotiated with insurance companies. Different patients and employers can face different financial arrangements for essentially similar services.
This creates an environment in which determining the actual cost of treatment becomes extremely difficult.
During the interview, Smith discusses the role of claims repricers and third-party intermediaries.
He describes a situation in which a hospital submits a $100,000 bill, an intermediary negotiates a lower amount, and the employer is subsequently charged a commission based on the claimed savings.
According to Smith, these apparent savings can be misleading when the employer’s underlying contractual payment arrangement was already established.
His criticism is that the system can reward intermediaries for negotiating discounts against inflated initial charges rather than simply identifying the lowest reasonable price.
In such an environment, a provider offering a straightforward, all-inclusive price can disrupt the economics of the entire transaction.
Smith argues that transparent pricing threatens a business model that depends on complicated billing arrangements and opaque financial relationships.
Why Direct Healthcare Purchasing Changes the Equation
A central theme of Smith’s philosophy is that patients and employers should be treated as actual buyers of medical services.
He believes healthcare has become unnecessarily dependent on third-party intermediaries.
Rather than allowing patients to compare providers and purchase services directly, the traditional system places insurance companies and institutional arrangements between the person receiving care and the physician providing it.
The Surgery Center of Oklahoma attempts to remove those barriers.
Its model has also attracted self-funded employers.
Unlike traditional insurance arrangements in which an employer transfers much of the financial risk to an insurance carrier, self-funded companies pay employee healthcare expenses from their own resources.
This creates a direct financial incentive to seek more affordable medical services.
Smith explains that the center has developed arrangements with companies across 49 states. Some employers will cover the patient’s travel and accommodation, waive out-of-pocket expenses, and pay for treatment at the Oklahoma facility.
Why would an employer do this?
Because the savings from purchasing surgery at a transparent, competitive price can outweigh the cost of transporting an employee to another state.
This approach also demonstrates how competition can extend beyond individual patients. Large institutional buyers can influence healthcare providers by directing substantial amounts of business toward facilities offering better prices.
Is Healthcare Price Transparency Enough to Reform Hospitals?
Dr. Smith believes transparent pricing is becoming increasingly difficult for traditional healthcare institutions to ignore.
He recalls that when he first published prices in 2009, the idea seemed almost unreasonable to many people.
Since then, price transparency has entered mainstream healthcare discussions, and federal requirements have pushed hospitals toward publishing pricing information.
However, Smith makes an important distinction between making hospitals publish information and creating a genuinely competitive marketplace.
A hospital may technically disclose prices while leaving patients unable to understand the actual amount they will pay.
A meaningful price-transparency model requires more than a spreadsheet of charges. Patients need understandable, comprehensive prices that include the major components of their treatment.
Smith also describes how demand for transparent pricing has expanded beyond outpatient surgery.
Employers and patients increasingly want predictable prices for imaging, inpatient surgery, oncology, cardiology, and other medical services.
He discusses his work helping providers develop bundled pricing through a separate organization, Atlas Billing Company.
The broader movement suggests that direct purchasing is not necessarily limited to small surgical facilities. Larger healthcare institutions can also participate when buyers demand it.
Who Is Responsible for America’s Healthcare Cost Problem?
The interview takes a more controversial turn when Smith discusses the political and institutional incentives behind American healthcare.
He argues that the healthcare system is not simply dysfunctional. In his view, many of its financial arrangements operate exactly as the incentives governing them encourage.
Smith criticizes the relationship between hospitals, insurance companies, pharmaceutical interests, and federal government policy.
He particularly objects to government intervention that, in his assessment, distorts prices and discourages direct competition.
He does not argue that hospitals or insurance companies should disappear. Instead, he believes hospitals should concentrate on providing medical care and insurance companies should return to their traditional role of insuring against financial risk.
His criticism is directed at the institutional arrangements that place intermediaries between patients and providers.
These are Smith’s interpretations of the healthcare system, but they highlight an important question: Can meaningful competition exist when patients cannot determine what medical services actually cost?
Building an Alternative Through Free-Market Healthcare
When asked whether the existing healthcare system can be repaired, Smith does not offer a simple political solution.
Instead, he emphasizes building an alternative.
He points to the growing Free Market Medical Association and the expansion of direct healthcare purchasing, direct contracting, and direct primary care.
His argument is that buyers do not necessarily need to wait for comprehensive political reform.
They can begin choosing providers who offer understandable prices and better value.
Self-funded employers, in particular, have the purchasing power to influence the market. If enough companies direct their employees toward transparent providers, traditional institutions will have to respond.
Smith also discusses Oklahoma’s state employee healthcare arrangements as an example of how large purchasers can encourage direct contracting.
The underlying principle is simple: providers cannot ignore buyers indefinitely when those buyers have meaningful alternatives.
What Patients Can Learn From the Surgery Center of Oklahoma
Dr. Keith Smith’s work offers several important lessons for patients navigating an increasingly complicated healthcare system.
1. Ask for the complete price before treatment.
Patients should request an estimate that includes the surgeon, anesthesia, facility, and other applicable charges.
2. Do not assume insurance always provides the cheapest option.
People with high deductibles or denied procedures may benefit from comparing direct-pay prices with their insurance-based costs.
3. Compare providers before scheduling elective procedures.
Medical decisions should consider clinical suitability, physician qualifications, quality, and financial transparency.
4. Employers should examine direct purchasing options.
Self-funded businesses may find opportunities to reduce healthcare spending by contracting directly with providers.
5. Demand meaningful price transparency.
A published hospital charge is not necessarily the amount a patient will actually owe. Clear, comprehensive pricing is more useful than complicated billing disclosures.
Patients should also remember that not every procedure is suitable for an outpatient surgery center. Medical eligibility, emergency capabilities, follow-up requirements, and individual clinical circumstances must be evaluated with qualified physicians.
Conclusion: Healthcare Should Put Patients Back in Control
The Surgery Center of Oklahoma challenges one of the most entrenched assumptions in modern medicine: that healthcare prices must remain complicated, unpredictable, and hidden behind institutional billing arrangements.
Dr. Keith Smith’s experiment, which began with a physician-owned surgical facility in 1997 and public pricing in 2009, demonstrates an alternative approach.
By publishing bundled prices, accepting direct payment, and avoiding conventional insurance contracts, the center has shown how patients and employers can make purchasing decisions with greater financial clarity.
His broader argument is that healthcare needs more accountability and genuine competition, not simply more complicated administrative arrangements.
Whether one agrees with all of Smith’s political and economic conclusions or not, his central challenge deserves serious consideration.
Patients should not have to discover the cost of medical treatment after receiving it.
Healthcare is ultimately about the patient, not the billing department, the insurance intermediary, or the institution surrounding the physician.
Your health should be in your hands—and knowing what your healthcare costs is an important part of that freedom.
Watch the Interview
In this conversation, Dr. Keith Smith explains how the Surgery Center of Oklahoma developed its transparent pricing model, why he believes traditional medical billing discourages competition, and how direct healthcare purchasing could reshape the future of American medicine.
Learn more about the Surgery Center of Oklahoma and explore its published surgical prices at:
FAQs
Q1. What is healthcare price transparency?
Healthcare price transparency means making the actual cost of medical services available to patients before treatment. It allows patients to compare providers and understand the financial obligations associated with medical procedures.
Q2. What makes the Surgery Center of Oklahoma different?
The Surgery Center of Oklahoma publishes upfront, bundled prices for surgical procedures. Its pricing combines surgeon, anesthesia, and facility fees, allowing eligible patients to know the expected cost before surgery.
Q3. Who founded the Surgery Center of Oklahoma?
Dr. Keith Smith co-founded the Surgery Center of Oklahoma in 1997. He introduced online surgical price transparency in 2009 to give patients greater control over medical costs.
Q4. Can patients pay directly for surgery without using insurance?
Yes. The Surgery Center of Oklahoma offers direct-pay pricing. This can be particularly useful for uninsured patients, people with high-deductible insurance plans, and self-funded employers.
Q5. How can transparent medical pricing reduce healthcare costs?
Transparent pricing allows patients and employers to compare providers, negotiate directly, and identify more affordable treatment options. Competition can encourage providers to improve efficiency and offer better value.
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