TUCSON, Ariz., Dec. 12, 2013 (GLOBE NEWSWIRE) -- Medicare sets prices periodically through a convoluted bureaucratic process that involves secret meetings by a select AMA committee, writes G. Keith Smith, M.D., in the winter 2013 issue of the Journal of American Physicians and Surgeons."
In contrast, Smith can change the posted prices at the website of the Surgery Center of Oklahoma, which he co-founded, from his smart phone.
"We don't know whether our prices are right, and we won't know until others start openly competing with us," he writes.
Prices are two-way signals between supplier and consumer, he explains. If prices are too low, no one will be willing to supply the service. If too high, people will choose not to buy—at least if they are spending their own money.
Opponents of free-market pricing state that costs will be unaffordable if doctors are allowed to charge "whatever they want." In fact, Smith writes, after calculating facility costs and the fees set by surgeon and anesthesiologist, and after "adding what seemed to be an appropriate profit margin and an allowance for equipment purchases and upgrades, we had prices that were one-sixth to one-tenth of what many 'not for profit' hospitals in our area were charging for the same procedures."
More astonishing still, Smith writes, "Our price was half what Medicare paid these same hospitals (according to what I have been told by congressional staffers) and were even less than what Medicaid pays these same hospitals."
Smith concludes: "Prices are an indispensable signal in a free market and must not be a 'proprietary' secret of the AMA and the third-party payment industry."
The Journal of American Physicians and Surgeons is published by the Association of American Physicians and Surgeons (AAPS), a national organization representing physicians in all specialties since 1943.
CONTACT: G. Keith Smith, M.D., KSmith@surgerycenterok.comSource:Association of American Physicians & Surgeons