Publisher's note: This post appears here courtesy of the Carolina Journal, and written by Julie Havlak.
Surgeon Wade Naziri offers his patients transparent, cash-based prices at his independent surgery center.
It's a novel concept in an environment of rising costs and hidden prices.
Naziri began fighting for price transparency because his patients couldn't afford out-of-network weight loss surgery at Greenville's local hospital - which billed one of his patients $54,000.
So, Naziri founded Southern Surgical Center, where he now charges $12,000 for the same surgery - a cash-based price he posts
online for bariatric and general laparoscopic surgeries. Unlike most Americans, Naziri's patients know what they will pay for out-of-network health care.
Price transparency has become President Trump's answer to Medicare for All. He argues transparency would expose health care to free-market forces and drive down patient advocates say Naziri is part of a grassroots, free-market push to make health care affordable.
"They'll accept a lower number, but they don't offer that to the consumer who doesn't have leverage,"
Naziri said. "We'd have patients come in who wanted surgery but didn't have insurance and couldn't afford it. So they were going overseas . ... We started thinking that perhaps we could do this here."
Need gallbladder surgery? It's price tag can range from $5,865
. Naziri's surgery center charges $7,500, a flat fee that includes anesthesia and facility fees - two culprits often behind huge surprise bills. Patients are coming to Greenville from the Virgin Islands and across the U.S. for those prices.
"In what other industry do you purchase anything and not know the price until you come out the other side?"
said Marni Carey, executive director of the Association of Independent Doctors, which supports price transparency. "They want us in the dark. What a brilliant system. You go in, you're blind, and you have an open check. Your health problem is the least of your worries once you get the bill."
The U.S. now spends $3.5 trillion on health care - or 18% of the GDP
and nearly half
of our federal tax dollars - and it isn't because Americans are getting significantly more or better care. It's because of runaway, hidden prices, economists say.
"It's simply that we pay higher prices for pretty much the same services,"
said Gerard Anderson, John Hopkins University professor of health policy. "It's the prices, stupid."
Trump sells transparency as a free-market solution. He penned an executive order
forcing hospitals to publish their prices, promising transparency would return the power to the patient and drive competitive prices.
"We're expected to pay with a blank check, whatever they choose to charge us. ... It's been highway robbery,"
said Cynthia Fisher, founder of Patients Rights Advocate and the woman credited
with convincing Trump to sign the executive order. "The insurance industry model is broken, and there is a huge opportunity for a new model. Transparency will lead us to this revolution."
Hospitals aren't keen on the idea. The American Hospital Association sued to block Trump's order.
"It would accelerate anti-competitive behavior among health insurers,"
said Cynthia Charles, a spokeswoman for the N.C. Healthcare Association. "It would be unfortunate if publicly posting privately negotiated rates actually resulted in undermining the competitive forces of private market dynamics."
Today, hospitals set their prices with a chargemaster, a database of prices that hospitals use to haggle with insurers. The final price tag can vary by tens of thousands of dollars. What Blue Cross N.C. paid
for knee replacements in the Charlotte area ranged from $20,000 to $40,000.
"The prices are high because they can be,"
said David Hyman, author of Overcharged: Why Americans Pay Too Much for Health Care. "Our system looks like it was almost engineered to be expensive, that it was expensive by design. Every incentive points in the direction of higher costs and higher spending."
Surgery centers like Naziri's could help lower prices in their communities while Trump wrestles over federally mandated price transparency, Fisher and other patient advocates say.
"Market entry is the most powerful disruptive force in causing industries to change,"
Hyman said. "And there doesn't have to be that many new players to cause the incumbents, who are worried about losing market share, to shape up."
Naziri says he values his relationship with his local hospital. He depends on it to perform more complicated surgeries and to treat insured patients. But he believes transparent, self-pay surgery centers will inevitably multiply as deductibles continue to rise.
"How do you control health care?"
Naziri said. "Let people decide how much they want to spend on care, rather a third-party writing a check where you have no idea what the cost is."