But many of the hospital systems that are participating in this don't want people to know because the the federal government ultimately is the culprit.
When I put all of our prices online, I had a big thick tinfoil hat placed on my head. I was the only one that had done
it and it was crazy. This mess works exactly like it's working and is not going to change anytime soon. It's I
think more appropriately called a cartel. Yeah. The only way as an anesthesiologist that I could escape uh
that situation was to
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I'm honored today to have us with with us Dr. Keith Smith. He's uh in Oklahoma and he runs I believe the Surgery Center of Oklahoma, but he can correct me on
that. And um he has an interesting and unique I don't know if it's quite unique, but certainly an innovative approach to medical pricing. uh
something akin to, you know, what you might find at a car dealership or um I don't know, shoe store, whatever. You know, pricing, pricing, that's pricing.
Uh Dr. Smith, uh thank you so much for being on the show. Uh what's what's been your pathway uh to say transparency in medicine?
Well, thanks first uh Randy for having me. Um yeah, the pathway started I think in the early 1990s when not a year or
two after I went into practice I realized I was I was basically an accomplice. uh the patients that that
were receiving even minor surgical uh procedures were being financially assassinated
uh by these so-called not for-p profofit hospitals where I work and I was uh I was greasing the kids for them. I was
providing the anesthesia and enabling them and making this possible. Um, I thought I was entering, you know, the
world of private practice where that, you know, it's full of the free marketer's dream of mutually beneficial exchange. And it turned out not to be
the case at all. So yeah, the only way as an anesthesiologist that I could escape uh that situation was to walk
away uh and own and control, you know, my own facility where I not only had uh
complete say over the the type and quality of care that was rendered, but
the price attached to it. So I I would you know be I created a situation where
I could not just be a medical but also a financial advocate uh for patients and enter into mutually beneficial exchanges
and uh that that's how the surgery center of Oklahoma was born in 1997.
So uh you know c certainly I don't think for our listeners and viewers you're going to put anybody to sleep. There's a little joke about anesthesiology. Uh
it's it's hours of boredom boredom punctuated or or weeks of boredom punctuated by moments of terror. Um you probably heard that one, right?
That's right. That's right.
But but you know there's there's also a joke uh you know airplane with a band crashes and three three three musicians
and a drummer um you know pass away. Um so so you're kind of in that that like the drummer joke. uh you know they're not necessarily a musician
anesthesiologist you're not quite a surgeon and you're not doing primary care per se uh but if you're running the surgery center of Oklahoma uh you know
how do you fill up your lineup if you're the the manager of the baseball team or the general manager whatever how do you uh fill out your lineup and and how do
you get uh you know u you know people wanting to play on your team who are in the surgical field and have other options
yeah so [clears throat] by the time I opened the center in 1997 I didn't practice for seven years and had a loyal
uh following of surgeons. Uh I was busy enough uh that I could be picky. Uh if I found myself working with a surgeon who
I decided was incompetent or unethical, I just scratch them off the list and I wouldn't work with them. So when we
opened the facility uh the the really talented ethical surgeons that I worked with followed uh followed me there. I
opened the center with a like-minded anesthesiologist and Steve Longier. He had a similar following. So between the
two of us, we started with 12 or 13 pretty solid uh individuals that that we would let operate on us. And that was
our rule from the very beginning. we would never allow a surgeon into the facility to have privileges that we
wouldn't let operated on us. So, uh, you know, that was in 1997 and here we are, you know, 30 years later this coming
May. We have 145 surgeons on staff. So
it's now a you know very large operation multi- specialty um surgery center and we don't have any insurance plans.
We don't deal with any carriers. We've never accepted a dime of money for Medicare. I didn't never intend to. Um
and so it you know it's a unique facility where you we have all our prices online and say here's what we do and here's how much it is and uh if
people find that to be a value then they they make that choice.
So um on a [clears throat] technical basis I mean what what is your campus like? You you have some surgical suites
overnight stays. Uh I've only had you know minor surgeries but not fortunately. Um, and uh, I did stay
overnight in the hospital once. I had a um, kind of a catheter procedure uh, on my part. Nothing major. Where where do
you draw the line? What kind of things do you take? And how does it wind up working out if you know people could have their insurance pay for it elsewhere? I mean,
what what's their what's the impetus to go with you? A lot of questions there. I don't know if you just want to hit the swirl of my thoughts.
Yeah. So, we we actually uh uh have a 23-hour stay uh capability with our the
way that we're licensed in the state of Oklahoma. So, that allows us to perform, you know, fairly large surgeries. We do
hyerectomies and some spine surgery, colear implants, um lot, you know, fair
to joints. We do we do a lot of uh bigger surgeries with our 23-hour stay
capability. Um the people that buy from us are people that have sticker chalk. So, you know,
it's it's hard to acknowledge, but it's true. Half the people in the United States don't care what medical care
costs because they are part of essentially a socialized scheme. Whether it's Medicare, Medicaid,
uh, Triricare, active duty, Indian Health, VA, if you add all those lives up, that's about half the people in the
United States. And they honestly don't care. uh they don't care how much it is because they're not paying. The people that we take care of are the people who
are paying either directly or indirectly. So they are individuals that are either uninsured or have elected to
have uh you know very essentially self-insured themselves with a high deductible. Members of cost sharing
ministries uh or members of self-funded health plans. Um, a lot of companies pay for
their pay their employees care out of operational revenue instead of buying that risk uh protection from BlueCost
United Sign. So, a company that's self-insured, [clears throat] if they're paying the bills, when you think through it, they actually have the same sperop
that an individual does. So, we have [clears throat] contracts for 49 in 49 states
uh with hundreds of companies that will fly their employee and a companion to our facility, wave all their outpocket cost and pay their travel and lodging.
And that's because the pricing listed on our website is many times on one10enth of what the care is is going to cost at
a so-called not for-p profofit hospital down the street. Um, I would argue it's not the same care because the patient
experience in our facility, it's unmatched. There there are some great places to to get surgical care, but I'm so biased. But it's it's so wonderful.
And it's not just my opinion. All the surgeons that work there, particularly the ones who are new to Oklahoma City
area that have moved from one of the coasts or somewhere else, they'll tell me all day long, "This is the best place
I'll ever work." So, you know, we we deal with patients that have sticker shock or or whoever is behind them,
employer, cashier, and have sticker shock. Um, but insurance companies hate us. uh they don't buy from us and I
don't want to do business with them. Um interestingly the most rapidly growing demographic of
buyers uh at Surgery Center of Oklahoma are patients who have insurance but who
have run into the denial machine. So um this this went viral on the X the other
day. Some guy was describing a patient that had a bucket handled tear of their meniscus and their carrier, I don't
remember which carrier it was, just say it was that didn't meet medical necessity. The person's on crutches until they get their bucket handle
miniscus because that that's not just a to meniscus. That's a mechanical block of knee motion. So, they're not ambulatoratory. We had exactly the same
situation about two months ago. a very wellto-d do real estate developer had what he thought was a high-end Blue
Cross plan and they said we can authorize that unimag.
So he had a surgery at our place the next day for I think it was $4,500 surgeon anesthesia facility and we he
was walking you we walked basically to his call. So there are people that have insurance who, you know, sleep better at
night. I say insurance, they sleep better at night because, you know, they have one of these cards in their wallet.
Increasingly, they're they're like Canadians, you know, who have coverage, whatever the hell that means. They they
just don't have access to care uh that so many of them need. And you know, when
when I posted our website in 2009, the first patients to take advantage of that were Canadians. Uh they got
coverage, but they just don't have access. Um so we we still see a lot of Canadians because they're standing in
two, three, four year lines and they can end their nightmare, you know, at my facility for a reasonable posting price.
Yeah. Well, it almost makes me want to have an apppendecttomy except [laughter] my uh I mean people have said I could, you
know, stand to have a nose job or something like that. Um know there's a swirl of again another swirl of questions come up because you you bring
up they're interesting. Um first of all as as part part of partly an analogy I think of um uh colleges uh when we have
our um children get to that certain tender age um where you know they they're not quite paying the rent and so forth um but they're going to you're going to ship them out to colleges.
There's a dual system. There's a private college system and the public college system um which are kind of side by side um but they they both have kind of a
socialist welfare aspect because they they subscribe to Pell Grants and scholarships and so forth. is really the same kind of opacity of pricing we see
in the colleges as we see in the medical world. And you know I I I haven't made this into an essay yet but I haven't it kind of whirling around. Uh well I guess
you notice a lot of things are swirling around but uh you know somewhere in the back of my head I have an essay about how there's kind of this additional tax
when you are above say you know like twice over the poverty line. You're in that sweet spot where you pay double.
You pay taxes and then you don't get the things from the taxes. So, um you'll pay a higher rate of tuition than if you're
just a little bit below. Um if you're a little bit below, you kind of go in to college, pay zero. Uh we have this very similar situation in the medical world
where in uh if you are on Medicaid, uh your income, say below, you know, some line, you pretty much have everything
paid for. You're going to pay zero co-ayments, zero deductible, whatever.
And if you're really wealthy, it doesn't really matter because they're just, you know, extra things, you know, you just, you know, pull it out of a bank account that has a lot of cushion and whatnot.
But in that middle zone where you're kind of the working uh the working, you know, Joe Joe six-pack or whatever, you are spending, you're paying in, you make
enough money to pay into the tax system, but then your kids are not going to go to college for free. You're going to have to pay that additional amount to get your kids into college. I I it's not
exactly the same thing. it doesn't track exactly with the medical uh system but this seems like there's something like that you know so you know if you're
destitute whatever I mean again I I I might have mentioned that you know I did uh my regular primary care practice I had um I did drug de addiction uh for
about a you know better part of a decade um in the 2000s so forth and uh you know everyone talks about access to care
people came in they had actually frankly too much access to care because uh they were you know using their mass health card which Medicaid uh card welfare
whatever to go to doctor doctor see a lot of people get a lot of drugs maybe sell them on the side and what this whole kind of gaming the system that happens on the low end and and on the
high end you know there were some wealthy people that came in for the same thing whatever but the but the the part people who struggled were the people who were making enough money to have a job
and whatnot but they couldn't necessarily buy into insurance and they're in that that capture zone where they're going to pay double but you know for for drug de addiction actually those
are the people who actually did the best oddly enough because they had a little bit personal pain point that it wasn't somebody else's money. You know, if you're too wealthy, it doesn't feel like
it's your money anyway. You have some guilt over it. And if you're very poor, it's somebody else's money because it's, you know, disability insurance or
Medicaid or Medicare, whatever, SSDI, one of those other things. And so, it tends to be the people actually did, you know, kind of heard the most and and and
wanted to do well and wound up doing be best were people who were kind of that working middle class. Uh so anyway, that that's a long preface there, but you're
bringing up a lot of structural things with the NHS uh aspect of of Canada, you know, the public health um you know, social, you know, single pay or
whatever. You know, they they have this insurance as it were, but they can't get it. Um you know, anyway, so that that's
a little bit of a preface, but the question, I guess, would be um how how how manageable is it to expand your view
into other realms? Is it just that where kind of like the the you know before the treaty of Westfailia all these kind of citystates in Europe you know with
fortresses around them battling each other and and there's no man's land between is it just that you know people can be in the in your zone of of being
able to afford you and not health insurance or people who have health insurance they can't afford you.
Yeah. So, the good news is this is much more u expanded
um and um and available than most people know. And part of the reason most people
don't know how prevalent this is is the primary cartel members do not want it
known uh because because their whole uh house of cards breaks down. So,
Keep in mind in 2009 when I put all of our prices online, I had a big thick tinfold hat placed on my
head. Was it a I was the only one that had done it and it was crazy. And just a
few short years later, you you have a guy sitting in the Oval Office signing an executive order making that
mandatory, making that law. So in just a few short years
now the scrutiny of not providing pricing is on is on those really who
won't provide pricing. Now you know you're expected to answer the question how much is my colonoscopy.
So as this has become more prevalent uh and by the way I'm against mandating
what I done. I'm a a philosophical libertarian. I don't think you make people do things. I think you find mutually beneficial exchanges.
So mandating it though has changed the narrative. The narrative now is pretty
mainstream. You know, price transparency is a good thing. Well, once buyers, particularly institutional buyers,
self-funded buyers became aware that they could purchase directly and not
have the insurance intermediary completely fleece the exchange. Then
they demanded to buy directly. Well, for me to make what the Surgery Center of
Oklahoma does palatable to an institutional buyer, we'll say a self-funded company, I couldn't just
say, uh, okay, I'll make your knee aroscopy affordable. I also had to say,
well, we'll make your child's arlectomy affordable and your wife's hyctomy affordable. And then I couldn't stop with outpatient surgery.
I had to figure out a way and others were right along there with me. How can we make imaging affordable?
And then it I began to get inquiries from people that bought from us. How can we make inpatient surgery affordable?
How can we make oncology and cardiology affordable? In some what's happened is because the the demand has become more
widespread and mainstream the market has done what the market always do does. It has accommodated these buyers with
preferences. It's why the Austrian school of economics you know buyers have preferences and you do not accommodate
those at your own peril. So in order not to see really significant blocks of
business walk out the door, uh the market has done what it always does. And I think that there are there in fact I
don't think this I know this there are large hospital systems uh traditionally
price gougggers as I would characterize them who are now participating in direct exchange. And I know because I'm helping
them. While they don't know how to actually create an all-inclusive bundled price, I know how to do that for them.
And I do that for the hospital systems for various surgeries. That it's a completely separate entity called Atlas
Milling Company. It has its own website, the Atlasmilling Company.com, and it has all of these inpatient prices on there
that have been cobbled together. Anybody that is anticipating a you know removal of the pituitary or a colon resection
should look on that website. So now there is very little that cannot be
purchased directly uh with a with an upfront price but many of the hospital systems that are participating in this
don't want people to know because if it's going to grow they certainly don't want it to grow very quickly because it's just simply not as profitable for
them. If if they had to deal with buyers in a direct and transparent way, they would not be able to support I mean to
support and sponsor professional sports franchises and buy physician practices and buy out
competitors and buy ads during the Super Bowl and buy billboards all over the place and pay their CEOs, you know, 105
million a year. They wouldn't have the money to do that if they actually had to do business in an honest way and
accommodate buyers that have sticker shop than buyers that have preferences.
So I I think this is more widespread than the industry wants to admit. Uh I think that there are a lot of in key
players in the industry uh that know that you know that this the scales have tipped. um is going to go this way.
They're they're just going to do all they can to slow it down and so they make all the money they can before it's too late.
Yeah. Uh well, I'm just going to kind of drill down on this one term used buyers, you know. Um now when you and I I
presume I can't tell for sure, but I presume you and I are both wearing shoes. Um I don't really know what type of shoes you like, what you're wearing, how many pairs you have. I don't care
precisely. I hope they're they're comfortable for you. You like them or vice versa. I assume when you and I decide to go get more shoes, it's
because we have particular itch, you know, to do so. The last pair ran out and got moldy and wet, whatever. Or you
just, you know, starting a new sport, um, whatever, whatever it is, you you buy your own shoes. You go shop for it.
Nobody asks you what group you're from, what insurance you have for your shoes, whatever. You just buy the shoes. Very simple matter. And the prices of shoes,
I think, are reasonable. you know, I don't think nobody nobody's talking about, you know, this the the shoe crisis in our economy or whatever. Um, you know, like gasoline price or
something like that, but tends to be wherever there's a a crisis, there's some type of monopsy, monopoly, um,
elomeration of power, whether it's unions or or government kind of sitting in the middle of it, uh, with colleges, like I mentioned, whatever, college
prices are crazy. I think there has to be kind of the lack of immediiacy, the lack of what I call consumer moment in the physics term like momentum, you know, where you have moment happening.
So you and I will have a shoe moment maybe twice a year or something like that. We go buy shoes and we find the pair. We I sift through, you know, on
online now usually and I find the thing I want, I don't know, tennis shoes or whatever and I try them out. Boom, boom, boom, done. And that's that. I don't think about it ever again except when
I'm buying the thing and probably for like an hour. That's that. Um, with medical care there's no real buyer. You know, I call it the parental model of
medical care. Uh, in part because, you know, even if I did think I wanted to have a, you know, appendecttomy,
you know, which would would be a weird thing for me, but um, you know, whatever. I think there's some kind of quaslective things people might want
like a, you know, a facial a facelift or something like that. Um, I I would I could decide that probably buy that myself. But for most of the other
things, uh it's going to be something that has to be factored between me and my physician and then another group uh of insured whatever. I'm part of a group
of people who own this particular type of insurance and then we are buying things on moss. So I don't want my neighbor whoever's in my group to like
over you know over buy be the Alda Marcus Marcos of of you know appendecttomies whatever. I don't want
somebody buying you know lots and lots of facelifts on my don. I think there should be some actuarial um you know kind of control on the thing from the
insurance company. I want the insurance company to be an insurance company to to keep a lid on those type of pricing but you know it is kind of a very muddled
muddied up market. And so the the the question is you know can people are they capable and confident enough to become actual buyers and consumers of of healthcare?
Yeah, if they weren't I wouldn't be open. So, I would argue, you know, what I'm doing is not new. Uh, this is a
throwback. This is pre screw it up by Medicare in their early 60s. Uh, doctors
had to look at patients in the eye and say, I charge $145 for this tonslectomy.
And they had to do it with a straight face. And it had to be a number that that was mutually beneficial.
Also, the physician, since very few physicians were employed back then,
would patronize a hospital that also was financially kid gloves with their
patients because if they were, then the patient would correctly hold the physician responsible for why did you
pick that price gouger? So there are certain controls that have been lost um
and and it's all due to very effective lobbying u in Mordor uh by the American
Hospital Association and and others uh and a complete betrayal I would argue of physicians by the American Medical
Association. So yeah, I mean pricewise,
people are much much more savvy in the United States that I think that this
industry would give them credit for. You you would be astonished at the conversations that I have with patients
uh about their shopping experience. Um there are a lot of places now online
where people can look and see how much should I pay all in for fill in the
blank. There are a lot of places that people can go and look at that. So there I think people are much much more savvy.
Um, and and I could be biased because this is my well I mean the only patients that I've talked to are patients who
have sho or [clears throat] their employer has shopped for them or their cost sharing ministry has reached out to
them and said listen if you go if you go one of these uh 10 facilities in the United States we will wave all of your
out of pocket. So [clears throat] that people are becoming price sensitive uh particularly as the economy uh struggles
and things become more unaffordable in every other arena and and I think that uh no one wants to be part of a robbery.
No one wants to help a price gouger fleece their insurance company or their
employer. And Americans are just like that. You know you We have a real issue
with injustice. Uh I think much more so than many many cultures in the world. Uh
and I don't want to be part of any interaction that is unjust even if I'm not victimized by it. So I would ar I
would argue that Americans are very savvy almost viciously savvy shoppers.
And I find that I find that in my world too.
Yeah. So, um we we belong to um BJ's and uh um Costco which are are membership
shopping places, you know. Uh we also we have the local supermarkets as well we go to here and there. Um and there's
Whole Foods and whatever. There's Trader Joe's as but we have a lot of different options to buy things and they they vary by convenience and we can get kind of a
group discount if we go to Costco or BJ's. Um I I think you know there could be you know buyers groupings that that
get better price and I I just got a bill um the other day um uh I actually went to a a clinic owned or operated by uh
Amazon. It's called one one medical or something like that and they're trying to do p primary care and I signed up for it a couple years ago I think right in
the aftermath of COVID because the doctors were had all these restrictions to see people even though every morning I wake up I see a doctor you know in the
mirror that one I can't prescribe stuff for me and I'm getting to an age where I you know have a couple prescriptions whatever um and so it was easy to sign
on for that and I had a virtual meetup $100 a year I I was part of this club as it were and They uh they filled some um
they did kind of uh filled couple prescriptions then my regular doctor came back online. I saw him in person blah blah blah. Anyway, I rejoined them
and um it's an interesting story that didn't things didn't quite work out that well, but I got a bill the other day from LabCore and uh you know just the
standard metabolic profile this and that things that they do for you and the bill was $628.
Now, I I used to do, you know, certain things in my own office and the prices were much much lower than that. You know, I didn't kind of but but but but
then the insurance it kind of filtered through the meat grinder, the sausage maker of the insurance and lo and behold, you know, woo, what a relief.
I'm only going to have to pay $138. And that's part of my deductible. I I used to I thought it was used to be back where they pay for the visits, not the pay for the labs, not the visits. Any it
wouldn't pay for the lab and that's under my deductible fines. my bill, but the whole thing, there was zero pay from the insurance company, but like a magic
wand, um, you know, the the the lady getting sawed in half. This bill got sawed into quarters. It was a $600 initial bill, more than that, and it came down $138.
I'm paying that gladly. That's fine with me, and that's about a reasonable amount for the, you know, a dozen or so lap tests I had. That's all well and good,
but I I was like left to think like who is paying the $600 amount? You know, if I didn't have the the, you know, get I'm
mixing metaphors here, but I didn't have Harry Potter's invisibility cloak, whatever, and I was exposed I would I have gone to the same place without
insurance and I I'd get $600 in lab test that for which the labors are willing to take $138. It's just like, you know, it
just seems so far. Again, like the college thing, you know, they say tuition's uh, you know, $80,000, $60,000. Really, nobody's paying that
$60,000 except the very wealthy and everybody else has some kind of accommodation with them. And it seems to be based on all these kind of blocks and
um, you know, again, marching armies or whatever. Whatever kind of fortification you have, they're willing to barter with you and change it down. But it just
seems like, you know, it would be nice if you know that price were that price for everybody or something within, you know, five or 10% or whatever. I could
see the insurance company getting, you know, 20% group discount or whatever.
That's fine. Like senior citizens get something, you know, off at Disney World or whatever. I I can understand some discount, but it wouldn't be like, oh, you know, Disney World, you're paying
$600 and and that guy's going to pay $100. You know, it just seems weird to me. Um I don't know if you have any
thoughts on that kind of like aspect of labs. I assume you have to do some laboratories and so forth yourself. Do you have have you factored that in?
Yeah. Um, one of the questions that haunted me, uh, after I posted our
website in 2009 with prices that I knew were 16, 1/8,
one10enth of what the so-called not for-p profofit hospitals were receiving for the same care. One one question that
haunted me was, why do insurance companies want to deal with Surgery Center of Oklahoma? After all, they
accept premiums, they pay claims, they pocket the difference, and that's their profit. Turns out there's more to the
story. There are these animals called claims repricers.
And what they do is they receive a $100,000 bill from a hospital, discount it to 20,000,
and then they charge the employer group a commission on that savings.
So big company, you know, it could be Costco, you know, big company that's self-funded, they have an employee that
has open heart surgery to get a $100,000 bill. Blue Cross pays 330,000
and claims that they saved Costco 70,000 and then per the terms of their
agreement they are paid a let's say 28% that's common 28% commission on the $70,000 they supposedly saved.
Now, keep in mind the contract between the carrier and the self-funded employer is for 30,000.
That number is already set. So, the savings, the discount is fictitious.
There is no that is just on paper. Also, the hospital is happy to pay or I mean
is happy to write off that $70,000 because then they claim they lost
$70,000. Never mind their contracted for 30, but now they can claim red ink that
helps maintain the fiction of their not for profofit status. That also forms the basis of a kickback they receive from
Uncle Sam called disproportionate share hospital payment or uncompensated care.
So to the extent that hospitals claim these fictitious losses, they actually receive payment from the federal
government. That's why out of one side of his mouth, a hospital administrator will tell you his emergency room is
making him go broke and out of the other side of his mouth, he's bossing the, you know, the head of operations to get
another crane out here. Let's build on to it because they make money even when they lose money. So the this discount game explains why they hate me.
Yeah. Because if I say a colisectomy is $6,836, which is my all-in price, that is an
opportunity for gone for one of the carriers. They really want me to charge $30,000 so that that they can then claim
that they saved someone 33,000 and charge for that. the repricing uh
false discount game makes uh a huge amount of money for the insurance companies that basically skim off the
transaction. Uh, and so the, you know, your $138 lab core bill that they charge
$600 for, if you had a direct primary care doctor, that would have been $45.
And they and the direct primary care doctor would have signed a contract with them for $45. He'd be happy to get it, but everybody else is going to get a $600 bill.
Yeah, it's pretty wild. Um I I as you're speaking I keep thinking of like these leagues you know back in the day in in
Baltics there was the Hansiotic league uh which set up uh for shipping and and trade they had to have their own armies because there were there was piracy in
the seas. So they formed this league and if you were in the league you basically would be protected. So it's kind of a little bit like Tony Soprano mixed in
with you know free trade. um the the Hansiotic uh forces they had their own army basically that kept the shipping
from Copenhagen to Stockholm or whatever um or St. Petersburg with so back and forth uh kept it all reasonable so the
Pirates wouldn't get it and then if you were either in the league or you weren't. So you had to pay some kind of dispensation uh to that league for its
existence. The same thing happens with baseball uh with the NHL with basketball stuff. They have a league and they have these various teams are in the league
and you can't really run the thing even though you could learn how to play football and have a team like the XFL or the CFL or the AFL early on the if Yeah.
Um anyway, you have these competitive leagues, but there are, you know, obviously intrinsic uh kind of benefits to being the pre-existing league and
oftentimes they actually will have legal carveouts for themselves. I think baseball has various kind of antitrust um uh exceptions that that Congress
allows because I don't know it's the national pastime or something like that.
But within that within those realms of baseball leagues, whatever, they have their own setup of taxation. I mean, if you are, you know, paying too much, you
pay a luxury tax. Nobody nobody really has explained where the luxury taxes go, but it probably goes to other teams. And a lot of teams manage to like make a
living at it in baseball by not having winning records. the the thing you're talking about was the hospitals and and how they can kind of lose money and make
money. The Kansas City Royals for like a you know 15 years or 20 years during their terrible years um they just collected you know they they were happy
to field a baseball team and they had kind of a a you know a shadow of a team probably minor league level players and they paid them minimally. They paid them
like a fifth or a tenth of what the Yankees were paying. Um but the Yankees were coughing out you know 50 80 hundred million dollars every year to this luxury thing and went it kind of
redistributed it's kind of a welfare plan and so the welfare recipients of the league they managed to exist without really doing much baseball you know they
weren't really you know creasing the sky with their baseball talents but they were kind of existing you know I I I'm not making any firm analogies here I'm
just kind of spitballing and I apologize but it seems to me like a lot of these things have to have some transparency not just in the prices that you mentioned but in the in the inter
relationship in the leagues and what kind of agreements and treaties have been made at our expense often.
Yeah. And u you're magnanimous to call them or refer to them as a league analogously. Uh it's I think more
appropriately called a cartel. So uh more than one hospital administrator has
been heard to say they consider the PPOs ATN machines for their hospital. So, you
know, you'll see in the news once in a while that a big hospital system is fighting with United or they're fighting with Edna or Edna's going to fire this hospital and a lot of this is theater.
Um, this is a cartel. Uh the most important part of this whole
interventionist uh relationship is that the federal government
ultimately is the culprit. Uh people get focused on the insurance carriers. I don't have a problem with insurance
carriers. I just wish they'd get back in the insurance business and not right, you know, not fleece everyone and try to be involved in an oil change. I mean
that they shouldn't be involved in oil changes and car washers and that's essentially what they do in this industry. I don't have a problem with hospitals.
We need hospitals. Uh we need them desperately. Uh what we don't need is the federal government's involvement in
this industry. Uh they have uh they have found everything up. Um, and as much as people would like to say that it's
dysfunctional, I would argue it is working exactly as designed. There's a lot of money that uh
is passed around in DC to ensure that this mess works exactly like it's working and is not going to change
anytime soon. And I think that's important for people to understand because there are people who are talking
about throwing the entire industry into the lap of the very people who are
responsible for the disaster of high prices and sporadic quality that we see in the United States now. So, as
well-meaning as someone might be to be clamoring for Medicare for all, they need to understand the real culprit
behind the mess that we have is Uncle Sam.
And all they have to do really is look north of the border to see how the story ends. And the way it ends is the way
that Canadians are ending are ending their system. They've euthanized 200,000
people waiting in line for procedures that are not available to them in any reasonable hide. So if you just can't
get to them, then you just encourage them to commit suicide. So that that is the way all of these socialized systems
end up. Um and Uncle Sam sleeps like a baby at night inflicting those kind of
hardships on people. So I I like to tell people that, you know, the cartel is essentially made up of the, you know,
the carriers, you know, big pharma, big hospitals, but Uncle Sam is driving the Gailway car every time. So I I really
[clears throat] want people to focus on the role the federal government has in what we're experiencing now.
Yeah. And I'm not sure I I I fully buy the the the runaway the the analogy. I I do think that, you know, I'm going to
stick with my league for now, but there they may probably the commissioner on some level andor the commissioners of the commissioners um you know, maybe a
little bit like the, you know, alcoholic beverage commission or something like that. Um where they're they're they're watching over the whole thing and they
set the rules. Um and I don't think the rules I think the rules are odd and they again favor um big groups um that have
enough money. So again, I can't start a team in the NFL. Like even if I I don't know, somehow got a bunch of players like Odell, you know, um
Odell Beckham or whatever to come on my, you know, whatever. I I I couldn't start a team. They just wouldn't let me have one. You know, when I somehow got I
don't know, bunch of striking players or whatever, they wouldn't let me field a team. You know, you have to have the right dispensation to get in. And that's
both the league and kind of the legal rules around them. Um, but you know, I I I agree with you that that it's not
really a fair market and and the government, I think, has done a lot of things to, you know, you you mentioned you would like to let insurance companies be insurance companies, ditto.
Uh, I think they're very good. I mean, but we don't really hear about a housing insurance crisis or a car insurance crisis because for the most part, we let
those companies be those companies. They cover the things that are very explicit in the car insurance policy. You don't want a car insurance policy that's going to cover, you know, every some every
time somebody wants to wax his car or whatever, you know, these cosmetic things or or if he wants new tires or whatever, you know, the car has to be kind of a standard make and up to up to
snuff. It gets registered so forth and inspected here and there and then you cover kind of the things you want comprehensively or not. And and nobody really cares about that. That's fine.
That's, you know, kind of insurance market allowed to be an insurance market for the most part. There are some kind of add-ons there as well. Um and but
homeowners insurance probably a cleaner example. But with with with health insurance there's been obviously the Affordable Care Act. But even before that there was this mental health parity
act uh which came about originally I think in the 80s and then codified in 2000 or so uh 2008 maybe um under uh um
Obama. And you know what they what they did is told insurance companies the thing they have to cover. you know, if somebody has a kind of a diffuse mental
complaint, um, anxiety or whatever or ADHD or whatever, they're going to have to get covered to the same extent they would get covered if they, you know, had an ankle sprain. So whether it's a an,
you know, I don't know, feeling bad or not sleeping well or whatever, it has to be covered. So the the insurance companies have to mutate to that and
they have to then they got taken away the ability to refuse people. So the car insurance company can say, "Your car is, you know, been five accidents. You're a terrible driver.
Get a new car. you know, have somebody else drive. We're not covering you. They can do that. Whereas the health insurance companies now have to take everybody even if they've had, you know, proflegate life in one way or another.
They're, I don't know, doing uh drunk motorcycle driving, whatever. They still have to be taken whatever their priors are. And so, they're no longer insurance companies.
They become just kind of benefit managers as per the uh you know, precepts and and uh of of the federal government. So, I agree with you there.
Um, you know, I I don't know the way out of that. Kind of like the whole system has to kind of go through detox. Is there a kind of a transition aspect?
You're part of this DPC movement, direct primary care. I I think um is there a way of you know you know the Soviet
Union and the the Eastern Block? I mean, it was it had to be there forever until it wasn't there forever. You know there was a moment which it fell and it failed
simultaneously and then it was no longer there and everyone's like oh obviously obviously it's no longer there anymore.
Is there some kind of uh you know bifphasic aspect you know like uh carbon dioxide goes right from you know a solid to to to gas it sublimates. There's no
intermediate step. Is there something that happens along that line in our health care system?
Yeah, I think um [clears throat] somebody I think it was one of the popes met with Livian von Mises many years ago
and he said there had you know you've got socialism on one end and free market law there on the other end isn't there a
third what and Mises said yes and it leads directly to the third world so I don't I think
that's hilarious is but u I don't know that there is a fix uh for
this mess. Um I'm focusing and the members in the 37 state chapters of the
free market medical association which has become a a very nice big uh organization.
We're focusing on building an alternative um and hoping that just through sheer
buyer preference um an alternative will be more attractive than the mess. And I think as
more and more buyers choose uh direct care, direct contracting,
direct primary care, direct surgical care. I think as more and more buyers uh insist
uh on that as their preference then you begin to see the mainstream u model with them.
I don't know because it is so political uh and it is so gross and those same insurance companies now that have to
take everybody the tradeoff was that all their premiums are subsidized.
Yeah. So, you know, basically the taxpayers are paying everybody else's premiums. It's like OIE said democracy
is that wonderful system where no, the definition of government is that entity that everybody thinks they can live off
of while everybody else supports it. So yeah, it's it's just uh I I think the right
use of our limited time and resources on this planet in this industry is to focus
on building an alternative and the buyer out there the gorilla in the room that
if they really put their foot down in a gigantic way and I think we're starting with seed are the self it's the
self-funded block. So the these companies that are self-funded are much more numerous than prior to ACA because
the ACA made self-funding a much more palatable option even for companies with
30 or 40 employees. So, I think if the self-funded buyers put their foot down,
all of those who actually provide care will not be able to turn their backs on them without placing their businesses uh
really in peril. Here in Oklahoma, uh the state of Oklahoma, many times legislators, governors, you know, what can we do to assist what you're doing?
And I said, "Please tell me you're not asking, you know, how can I help you?
I'm from the government." But what they what I told them if they really did want to help was to put their
money where their mouth was. They have a self-funded plan that covers all of the employees in
the state of Oklahoma. I said, "Why don't you become a B?" Well, there are 182,000 mods, and that
is a buyer the size of which even the largest price gouger in the state of Oklahoma cannot turn their back on uh
without really really having some financial issues. So now if a state employee in Oklahoma needs surgery and
they come to Surgery Center of Oklahoma or anyone else that basically is maximal pricing they the patient has no out of
pocket and that's powerful a lot of these are teachers and they don't have a ton of disposable income. They're not what you and I will call highly
compensated. So if they know their child's uh called selectomy or culare inflate or their husband's total knee is
going to be valued 100%. It's pretty powerful steering move. So government at
the state level by buying directly is part of why in Oklahoma in particular
the scales have begun to tip. No other state has done this. I think Montana tried it and then it got stood on its
head and went away. But uh I think the that's what we need to focus on is
educating these sticker shocked institutional buyers uh and let them know there's an alternative way to buy
and then just you know pop a champagne cork as the other side begins to really struggle for bread.
Well that's been fascinating. Um, you know, [clears throat] any closing words?
I think that we've pretty well covered the situation. Um, I'm very much honored for your having been here. Uh, any
thoughts for us, uh, as you, uh, head out to more anesthesia, more surgery?
U, I would encourage, uh, people to check out the free market medical association. That is that's really the
best indicator of um how this movement is advancing.
Um the surgery center has all of our prices online. If you anticipate having an elective outpatient procedure, you
should look at those prices before you put yourself in a potentially a position of real financial risk. And then Atlas
Building Company uh is another Atlasbuilding Company.com is another website uh that has a lot of pricing
including inpatient pricing uh that's there for people to reference and peruse
uh you know in their own comfort. If you're a physician, I think you need to really wrap your mind around uh the
likelihood that you will have to accommodate speaker shop buyers at some point. And if you're not ready or
prepared to do that, I would say for your own uh for your own practices well-being, you should you should really consider that.
Well, thank you so much, Dr. Keith Smith. Appreciate it. Thanks for having me.