The Pediatric Lounge, Where Pediatric Physicians Come to Share Their Stories and Success

090 Free Markets and Value

July 06, 2023 Dr. George Rogu, MD, MBA and Dr. Herb Bravo Season 2 Episode 18
090 Free Markets and Value
The Pediatric Lounge, Where Pediatric Physicians Come to Share Their Stories and Success
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The Pediatric Lounge, Where Pediatric Physicians Come to Share Their Stories and Success
090 Free Markets and Value
Jul 06, 2023 Season 2 Episode 18
Dr. George Rogu, MD, MBA and Dr. Herb Bravo

Dr. G. Keith Smith is a board-certified anesthesiologist in private practice since 1990. In 1997, he co-founded The Surgery Center of Oklahoma, an outpatient surgery center in Oklahoma City. SCO is owned by over 50 top physicians and surgeons in central Oklahoma. Dr. Smith is the medical director, CEO, and managing partner while maintaining an active anesthesia practice.

In 2009, Dr. Smith launched a website that displays SCO’s all-inclusive pricing for various surgical procedures. This move garnered national and even international attention. Not only do many uninsured or underinsured American patients take advantage of this cash pricing, but many Canadians have traveled to The Surgery Center to receive care. Recently, the focus has expanded to working with self-funded employers to offer high-value care to their employees. Increasingly, self-funded health plans are taking advantage of Dr. Smith’s pricing model resulting in significant savings for their employee health plans.

The free market focus of the Surgery Center, the innovator of this free market model in the U.S., has gained the endorsement of policymakers and legislators. Dr. Smith hopes as many facilities as possible will adopt a transparent pricing model, which he believes will lower costs for all and improve the quality of care. Dr. Smith is the co-founder of the Free Market Medical Association. The association provides a platform where buyers, individuals, and employers seeking high-quality, affordable healthcare can find free market-minded sellers, both physicians and facilities.

Additionally, Dr. Smith has appeared on the John Stossel Show, CNBC, Huffington Post, The O’Reilly Factor, Capital Account with Lauren Lyster, and the Ron Paul Channel. Reason Magazine’s TV division and NBC affiliate, KFOR, has also featured him. The New York Times, ABC News, Forbes, and others have written articles featuring Dr. Smith’s revolutionary approach to healthcare pricing and uncompromising free market principles.

He is also a strong supporter of #DPC and NBPAS.   

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The Pediatric Lounge - A Podcast taking you behind the door of the Physician's Lounge to get a deeper insight into what docs are talking about today, from the clinically profound to the wonderfully routine...and everything in between.

The conversations are not intended as medical advice, and the opinions expressed are solely those of the host and guest.



Show Notes Transcript

Dr. G. Keith Smith is a board-certified anesthesiologist in private practice since 1990. In 1997, he co-founded The Surgery Center of Oklahoma, an outpatient surgery center in Oklahoma City. SCO is owned by over 50 top physicians and surgeons in central Oklahoma. Dr. Smith is the medical director, CEO, and managing partner while maintaining an active anesthesia practice.

In 2009, Dr. Smith launched a website that displays SCO’s all-inclusive pricing for various surgical procedures. This move garnered national and even international attention. Not only do many uninsured or underinsured American patients take advantage of this cash pricing, but many Canadians have traveled to The Surgery Center to receive care. Recently, the focus has expanded to working with self-funded employers to offer high-value care to their employees. Increasingly, self-funded health plans are taking advantage of Dr. Smith’s pricing model resulting in significant savings for their employee health plans.

The free market focus of the Surgery Center, the innovator of this free market model in the U.S., has gained the endorsement of policymakers and legislators. Dr. Smith hopes as many facilities as possible will adopt a transparent pricing model, which he believes will lower costs for all and improve the quality of care. Dr. Smith is the co-founder of the Free Market Medical Association. The association provides a platform where buyers, individuals, and employers seeking high-quality, affordable healthcare can find free market-minded sellers, both physicians and facilities.

Additionally, Dr. Smith has appeared on the John Stossel Show, CNBC, Huffington Post, The O’Reilly Factor, Capital Account with Lauren Lyster, and the Ron Paul Channel. Reason Magazine’s TV division and NBC affiliate, KFOR, has also featured him. The New York Times, ABC News, Forbes, and others have written articles featuring Dr. Smith’s revolutionary approach to healthcare pricing and uncompromising free market principles.

He is also a strong supporter of #DPC and NBPAS.   

Support the Show.

🔴 Subscribe for more Doctor stories like this: 🎧Apple and give us a 5-star review.
Read more on the TPL Website

SOCIAL Media Pages ===============================
📝 - Substack
🎧 - PODCAST
👥 - FACEBOOK
🐦 - TWITTER
📸 - Instagram
➡️ - Linkedin

The Pediatric Lounge - A Podcast taking you behind the door of the Physician's Lounge to get a deeper insight into what docs are talking about today, from the clinically profound to the wonderfully routine...and everything in between.

The conversations are not intended as medical advice, and the opinions expressed are solely those of the host and guest.



Free Markets 

[00:00:00] Dr. Bravo: , George is Thursday afternoon, and we have a phenomenal guest from Oklahoma, Dr. Kevin Smith, and he is going to be Keith. I'm sorry. And he's going to be talking about free markets in value okay. 

[00:00:14] Dr. Keith Smith: Welcome. Dr. Smith. Thank you. Thanks for having me. 

[00:00:18] Dr. Bravo: Our pleasure. So, you know, we interview mostly pediatricians.

So this question is going to be funny. Why not be a pediatrician? Why anesthesia? 

[00:00:29] Dr. Keith Smith: Well, you know, I went into anesthesia, but immediately fell in love with pediatric anesthesia and, and did a pediatric fellowship after my anesthesia training to cardiac fellowship as well. If I could stay busy doing nothing but pediatric anesthesia, that's what I would do.

It's it's technically challenging. It's precise. It's fun. It's rewarding. It's as gratifying as anything I've ever done. So, we're we're kindred spirits, I think. 

[00:01:01] Dr. Bravo: You know, this is, you just touched a nerve. I almost went back and did an anesthesia residency. And then I said, I don't like the cold and the ore.

And the surgeons, I'm leaving, 

 So now you are the founder and the president of a fascinating enterprise called the Surgical Center of Oklahoma.

What is it? And. Why did you do this? 

[00:01:32] Dr. Keith Smith: Well, I began my private practice in 1990 roaming around all of the big hospital systems in Oklahoma city, but I became a physician consistent with. the ideological upbringing that I had and that was, that was really the golden rule. I, I was brought up to, to not consider entering into any exchanges that were not mutually beneficial ever, even if I was the beneficiary of the exchange.

And it wasn't long after I entered private practice that I realized that I was an accomplice. I was actually the accessory to a crime. And in the hospitals and a financial crime, patients were being financially victimized by these big so called not for profit hospitals where I work. Increasingly, they were victims of medical crimes where I was forced to work and aid and a bit surgeons who I knew were not up to the task.

Hospitals gave privileges to whoever they wanted. Whether they were good or bad, the bad surgeons actually made more money because the more complications there were, the more money they made. And so I came to these realization about 1992 1993 and realized I, I was trapped. unless I escaped, walked away and actually had ownership and control of my own facility where I could advocate for patients, not just medically, but also financially.

So after many failed attempts over about a five year period, I was able to to secure ownership along with another anesthesiologist of a failing surgery center. And we opened in May of 1997 with the idea that we would we would advocate for patients medically and financially. And it's been a wild ride.

It's been a huge success. It's been exhausting. The, attacks we've sustained have taken their toll but there's a part of me that in a weird way is energized whenever I know that I've crossed paths with, with somebody who is, you know, a fan of the status quo, who just wants to continue to fleece patients and families, and in some weird way that is simultaneously energizing and exhausting.

So I don't know day to day how I feel, how I'm going to be tired. Am I going to be inspired? And it's usually a weird mixture of both, which is the same. I think for, for any physician who comes home, I just have you know, I have the weight of a facility and, and a bunch of employees, we have 138 surgeons on our staff, and so, you know, it's a big enterprise and we save patients a lot of money.

[00:04:39] Dr. Bravo: Let me let me interrupt you. What? Let me interrupt you on second. So you are a pediatrician because it's pediatrician. Not only we only do what's necessary for the child and where we have a lot of trepidation of doing anything that may be risky for the child, you know, you know, we, we, I tell parents all the time that umbilical hernia, we're not going to touch it till the kids five because most of the time it goes away here.

If it gets hard and the kid's throwing up, then we will intervene right away. But if you wanted to make money, I send it to the surgeon and have the surgeon take me to nice steak dinners. And he would make money, you would make money, the hospital would make money, and I get nice steak dinners, right? So, you have the heart of a pediatrician, because we always advocate for the best possible outcome for our kids.

You also allude to a second thing that we hear over and over in our podcasts about physicians that don't burn out, don't have moral injury, and are extremely happy. They work in physician led. Organizations. Once you hand over the reins of your organization to MBAs, whose sole purpose is to make as many dollars as they can out of every transaction, doesn't matter what the transaction is.

They're like lawyers. I don't care. I represent Dr. Bravo today. I represent Dr. Smith tomorrow. I represent Dr. Rogo tomorrow. Whoever's paying my bill, I represent them. I take a percentage. We become miserable because we no longer are doing what is best for the patient, but we're being told what is best for the pockets of the institution.

And those two don't mix. 

[00:06:33] Dr. Keith Smith: Now those are two, two great points. I tell people there are two economic models in this industry. One is, how do I maximize revenue? The model you just described. That's the model of the bean counters. The other model and the one that I promote and champion is the free market.

And that is how do I deliver maximum value? And that is a movement that is growing. And that is reason for hope and it's reason for optimism in this industry. It's very difficult for the status quo and the bean counters. to argue with cheaper and better. That's just un American. I mean, it just, you just don't do that.

And so this value sort of approach where patients are sovereign, the patient is the, is our focus. It's everything for the patient. That is consistent with a value based approach. The, approach where all you're trying to do is make money, is not. I tell medical students to your other point, to never go to work for a hospital, because if they do, then invariably they'll find themselves in a position where they're facing a dilemma no physician should ever face, and which is the source of moral injury and burnout. And that is, do I do what my employer wants me to do, or do I do what's best for the patient? No one should ever face that. 

[00:08:06] Dr. Bravo: Absolutely not. And so, yeah, those are great points. We see it. We interviewed a medical student that rotated with George. And he said, well, I want to be a urologist. Therefore, I'm going to have to be an employee of the health system.

And I said, why don't you find out how to get a rotation at the surgical center of Oklahoma in Oklahoma and spend a month with them, because there is a better way and you will make money and you will be happy. You will do great care for your patients and you won't just be a cog in a wheel that is grinding patients and physicians down to their bone day in, day out.

Actually, P. G. 

[00:08:48] Dr. Rogu: U. S. You know what a P. G. U. S. Profit generating unit. That's 

[00:08:52] Dr. Bravo: right. That's a physician. 

[00:08:55] Dr. Keith Smith: Now I'm happy. I'm happy to say the pendulum is beginning to swing the other way. Now what? Yeah, the pendulum is swinging the other way. Now we're led by primary care doctors in this direct primary care subscription based model.

And many pediatricians who are also doing that and internist and now they're specialists. Now there are neurologists and endocrinologists and other, other physicians who have repeat customers. They, are subscribing to this free market subscription based concierge model, frankly. That's, breaking the back of these big hospital systems that rely on a kept workforce.

to refer to the surgeons, whether they're any good or not. 

[00:09:46] Dr. Bravo: That's right. That's right. And one of the people he's also been on our show is great. Another person I admire like you, Lee grows. He's a good friend. Lee is an awesome human being. Awesome human being. Boys. He's phenomenal. Every time I see him, I, you know, it's just, he puts, he puts a smile on your face.

God bless him. I mean, he's, he's the best America's got. He's an awesome guy. I have a really deep question. Personal question. How is it possible that you can do my cataract surgery for 4, 000? Give me a price upfront and I am assuming I'll still see after the surgery. Yet, if I go to in Virginia, you can't open a freestanding surgical centers because we have a certificate, certificate of need law.

And so my hospital down the street, not a bad hospital, but owns 85% of the beds in Northern Virginia. We'll never allow a standalone surgical center where patients get value. How is it that you can do that for 4, 500? Well, they're probably going to charge me 15, 000, 20, 000, and I have a 5, 000 deductible, plus the fancy lenses come out of my pocket, and the what is it?

The Lasix? It's not called Lasix. They got a fancy Lasix machine now for the cataracts. That also comes out of my pocket. So each car is going to be 10, 000 or 15, 000. How can you do that? And I still see. 

[00:11:30] Dr. Keith Smith: Well, fortunately. And leading up to that, so your listeners know in 2009, I posted a website with all of our all inclusive prices listed on that website is just exploded and grown.

Like I said, we have many, many surgical specialties and almost 140 surgeons on staff. But fortunately, Herb, I'm asked that question less and less often. Like, how can you do this for so little? Fortunately, the light is now shining where it ought to shine, and where the scrutiny belongs. And that's on the not for profit hospital, or the hospital that claims to not make a profit charging 5 to 8x what I do.

They are the ones that now have some explaining to do. The answer to your question, though, is that is what it takes to pay for great care patients receive, and that's it. There is no margin in there to buy out physician practices. There is no margin in there to buy out other hospitals. There is no margin in there to bribe legislators to maintain insane laws like Certificate of Need.

There's no margin in my price for billboards all over the city or to sponsor professional sports franchises. There's no margin in my price for a multi million dollar administrator. We don't have an administrator. You're looking at him. So, and I have a full time anesthesia practice. So our price is, is what it is.

 I'll be here to tell you the surgeon. makes more money than any anywhere else they go when they come to my place because a huge chunk of what you see on my fees is reserved for the people who are actually doing the work. So, we have a very different model and I've told people recently it's a bit upside down.

The Surgery Center of Oklahoma is a tool in my practice. It is what allows the physicians who work there to deliver the highest possible quality of care at a reasonable price. The Surgery Center of Oklahoma is not thought of as a profit generator. It is a tool. And so we're upside down. We're the facility, the institution. It's not trying to make a ton of money. We're just trying to make sure the great surgeons that we work with are paid very, very well. 

[00:14:09] Dr. Bravo: So let me back up for a second. So you're telling me you don't have a CEO that you pay a million dollars and provide them, provide them with a car and a bodyguard. Nope, 

[00:14:21] Dr. Keith Smith: not my place.

[00:14:23] Dr. Bravo: You don't have a chief nursing officer that makes half a million a year provided with a car. And, you know, all the benefits of a chief executive, 

[00:14:34] Dr. Keith Smith: we don't. And I, but I'm going to tell you, if we had a million dollar administrator and we had a half million dollar chief nursing officer, the prices, the hospital's charge can not be justified.

Even with that, keep in mind, we are one 10th. or 1 8th for the same procedure, what the hospitals charged. And actually, it's not even the same. I would argue that our our care is better. So it's it's completely unjustifiable. And again, that's the part that's part of what energizes me and keeps me charging forward every day is when I realized Like a patient from Georgia told us who used my price to leverage a better deal in Georgia and we saved him 36, 000 and he didn't even come to Oklahoma City.

He just used our price. And he told me you've saved me all this money and you didn't even perform the surgery. So it's, it's, it's fun. Every day, every day is fun. 

[00:15:39] Dr. Bravo: And, and so how much money do you spend on it? 20, 30 million a year? 

[00:15:44] Dr. Keith Smith: We don't have electronic medical records. What? You don't have electronic medical records?

We have paper records. How can you 

[00:15:52] Dr. Bravo: provide quality if you don't have a computer? 

[00:15:55] Dr. Keith Smith: Well, and for a couple of reasons, and I'll get a lot of pushback on this, but I don't care. I don't see that EMR in our world brings any value. I think there is a market for it. I'm not sure we'll ever know what the market is because it's heavily subsidized.

You wouldn't even know if there was a market for it. The other thing is in the operating room or in the recovery room, particularly when we are taking care of infants, an electronic medical record and its completion and the typing needed to get it completed is no different than a video game distraction for the staff.

I believe it is a dangerous deterrent to quality care. I believe it is a dangerous distraction. I do not want computers in the operating room. I don't want nurses typing with their back turned to the operative field. I don't want recovery room nurses looking away from a child's airway. right after they've had their tonsils out so that they can type and complete their record.

I just don't think that it is a good idea in my world. There are a lot of people that disagree with me and want to fight about that, but that that's what I think about it. 

[00:17:11] Dr. Rogu: But medical legally, how do you I mean, how do you document what happened paper 

[00:17:17] Dr. Bravo: chart? Like we always 

[00:17:19] Dr. Rogu: can't document this went in that went out.

We did this. We did that time. I mean, there's a lot of things in the operating room that happened. 

[00:17:27] Dr. Bravo: They have a little sheet and they marked with a with an X. That's what anesthesiologist used to do. They had a sheet in front of them, and then they would just mark what they're doing. That's just paper. 

[00:17:39] Dr. Rogu: OK, well, I guess we've always done it like that.

So it could 

[00:17:41] Dr. Bravo: still work. It works. And then we have the same problem in the exam room, you spend, I guess you don't have to 

[00:17:48] Dr. Rogu: justify your billing because there's no insurance 

[00:17:51] Dr. Keith Smith: company, no insurance companies, no, we don't accept money from Medicare, Medicaid we just take care of people for a reasonable price.

[00:17:59] Dr. Bravo: And how much time do you and your staff spends reporting to the people up the street? I live in Northern Virginia, the, the swamp. What the BMI of your patients are, is it, how much do you think that improves care reporting that BMI on every patient that comes through my office or your operating room?

[00:18:22] Dr. Keith Smith: It doesn't help at all. Or, you know, are you a gun owner? You know, are you? Yeah, I mean, whatever. That's not even any of my business. The reason that 

[00:18:32] Dr. Rogu: they do that, Herb, we talked about this. It's for population health. They want to manage the population and see who's obese and who's holding a gun and whatever.

The problem with the EHRs of today is it requires a doctor to think and to do three or four or five, sometimes ten different steps to get to that one click. A good EHR automatically, because you have the height and the weight and all the BMI's, it automatically populates that in there without the physician intervention.

Like my EHR does that automatically. We don't 

[00:19:10] Dr. Bravo: do anything. It's a bunch of nonsense. Yeah, it's a bunch of nonsense. Somebody wants it. It's a bunch of nonsense. Somebody at CMS in a nice air conditioner office in D. C. who has nice lunches and dinners and gets taken out by lobbyists decided. That measuring BMI is on every interaction that a physician, a patient has is a great idea.

What are they doing with it? Nothing. They're going to see a lot of people are overweight. Oh, geez. And you can't go to your local mall and find that out. You can't go to your local. That's not evidence based my friend. You can't go to your local. 

[00:19:44] Dr. Rogu: That's not evidence based. That's your opinion. 

[00:19:48] Dr. Bravo: Yeah, that's what the problem.

Even though it's That's what the problem is. Now the hospitals here always gives us pushback. And this is what they say. Oh, no, no, no, no, no, no, no, no. You can't have a standalone surgical center because you'll take the easy patients. And you'll take the patients that can pay for the surgery and we'll run out of business and we won't be able to provide the ICU, the emergency room, the pediatric ICU, the NICU, blah, blah, blah, blah.

Why is that a bunch of phooey? 

[00:20:23] Dr. Keith Smith: Well, in what other industry are the complaints and the whining and the issues of the seller, the problems of the buyer? They're not. I mean, in what other industry, in what other industry is the buyer somehow obligated to subsidize the complaints, however real or fictitious?

Of the seller of the service. That's like saying you have to go to the gigantic car dealership to get your oil changed, or otherwise they're not going to be able to work on your carburetor. I mean, in what other industry is that not seen as insane? The truth is, the prices I have listed online are half. what Medicare pays the hospitals in my area. The prices I have listed online are less than what Medicaid pays the hospitals in my area. So we're not taking the easy cases. I've nested highs. A lot of sick patients We just don't charge them very much because, because we're not trying to feed all different kinds of mouths and beasts in our organization.

The hospitals would do much better if they would just not be so darn greedy. But again, if they ascribe to a completely different economic model one where they attempt to maximize revenue. If a surgery center opens up and does two cases across the street, just two surgeries that interferes with the hospital's ability to maximize revenue.

 Of course, they're going to fight that and they're going to lie and say whatever they have to do to keep any kind of competitors out of the mix. 

[00:22:19] Dr. Bravo: And so they follow the reverse of what George's dad says, right? George's dad says. Do good for your patients and the money will follow. The MBAs at the hospital follow what the industry calls cash cows.

Whatever is an expensive procedure that has to be done often with a high margin. And the more you do of those, the more revenue the hospital gets. And they're just chasing cash cows and not improving the health of the American population. 

[00:22:53] Dr. Keith Smith: Yeah, . in every other industry supports competition.

You know, if a restaurant opens up across the street from another restaurant, you know, the original restaurant there has got to pay attention to food and service or the one across the street may crush them. And so competition is a good thing. Competition always makes quality sore. and prices fall. And that is what the hospitals do not want.

They do not want to be held account for their quality, and they darn sure don't want to see prices fall to what economists call a market clearing price, which is where the buyer and the seller achieve maximal status. 

[00:23:37] Dr. Bravo: Yes, absolutely. They don't want a free market. No, no. And I was going to ask you, how do you measure quality at your center?

[00:23:49] Dr. Keith Smith: Well, it's interesting that no one really was interested in quality until the free market raised its head. You know, nobody asked any questions about quality at one of these price gouging hospitals. When I say an umbilical hernia repair is 2, 950, everybody all of a sudden gasps and, you know, what about quality?

And I just have to point out, no one ever asked about that at these big fat hospitals. The answer to your question though, is an economic one. I can't tell you that an umbilical hernia repair is 2, 950. unless I know what I'm doing. If you ask a hospital, how much is an umbilical hernia repair? They'll tell you.

I don't know. We got to wait till the case is over. Everything that was used. In other words, there is massive uncertainty about the outcome. of the performance of a procedure as simple as an umbilical hernia. Why is there massive uncertainty? Because they have massively different outcomes. Why is that?

Because they're just not as good at it maybe as someone who's willing to say, here is my price. So the proof that we are a quality organization, I believe, is that I'll tell you how much it is. There are procedures we do not perform and we don't perform certain procedures because frankly, I cannot find surgical talent good enough to step into that game.

I would be a fool to offer a procedure that we are not great at because that's a recipe for insolvency. Because say, if I say a procedure costs 6, 000 And it's a disaster. 30% of the time I'm going to lose my shirt. So I believe I believe that putting a price on it proves you know what you're doing. 

[00:25:53] Dr. Bravo: Plus, there's also things like, open heart surgery where it's not a day surgery.

That, you know, you need post surgical ICU care which is what hospitals should be doing, 

[00:26:06] Dr. Keith Smith: I have surgical friends who own a heart hospital. And it's 34, 000 for three or four, three or four vessel bypass. Their results are so solid and predictable, and there is so little uncertainty they'll post a price.

They'll tell you this is how much it is and they'll go with 

[00:26:24] Dr. Bravo: it. But they have the inpatient beds. 

[00:26:28] Dr. Keith Smith: Oh yeah. Yeah. They're a totally different outfit, but they are so confident in their outcomes that, you know, they'll, they'll put a price on it. 

[00:26:38] Dr. Bravo: But you do measure infection rate. 

[00:26:40] Dr. Keith Smith: We do. And if any of our surgeons are asked, how many of these have you performed?

How many revisions have you performed? They have all those answers. I post infection rates on our website. And those things are very measurable and easy. You have to be careful though because when people report quality information, it is self reported and there's an inherent conflict of interest. A lot of the Medicare data is just trash, partly because it's self reported and also partly because the procedure that is actually performed is typically not the procedure that's coded for for billing reasons because the hospital wants to make a whole lot more money.

And so they have, they have this filter of people who completely recode whatever it is that was done. So Medicare gets all this quality data based on the C. P. T. Procedure codes. And actually a huge percentage of those codes are don't even apply. So most of the Medicare quality data is trash. It is a waste of time to report a whole lot of other quality data is self reported and it's just simply not true.

I highly recommend Marty McCary's book, Unaccountable, where, you know, Marty's a scientist and he's a friend. And at the end of the book, he just threw up his hands and he said, if you want to know, you know, Dr. X at Facility Y should be doing my procedure, do a survey of the staff who work there and ask them.

Yes. 

[00:28:21] Dr. Bravo: Or other surgeons. But you did have one year that your infection rate was near zero. 

[00:28:27] Dr. Keith Smith: We have two years where the infection rate actually was zero. We have never, I don't think we've ever had a year where it went, went above 0. 5 of 1%, which is Which is 

[00:28:42] Dr. Bravo: common, right? That's phenomenal. 

[00:28:44] Dr. Keith Smith: But yeah, we've had two years where we went the entire year and did not have a single infection.

[00:28:49] Dr. Bravo: Yeah. So that, that says there's a culture of accountability from anesthesia to the nurses. to the surgeons. Everybody's focused on doing the best job possible for the patient and not rushing through it to meet some W. R. V. U. Quota to make their salary. 

[00:29:10] Dr. Keith Smith: Yeah, and I I've spent the money to have a dedicated instrument sterilization person.

That's all she does. She's like one of our secret weapons, but it's, it's real common to give the instrument sterilization duties to just a whole host of people who don't do that on a regular basis. And that, and that's part of our success as well. 

[00:29:36] Dr. Bravo: Do you have teams like, for example, the cataract surgeons?

They operate consistently with the same crew and the orthopedic surgeon with the same crew. 

[00:29:46] Dr. Keith Smith: So we don't do cataract surgery. I send all of that out. And the reason I did and still do is I asked my ophthalmologist friends who would remove your cataract and they all gave me the same two names, all of them.

So I called those two surgeons and I said, Hey, let's have lunch and sit down and you tell me what equipment you need. And I'll get it and off we go, and they both said, Keith, why would you do that? We already have that all set up. Why would you spend all that money and recreate what we've already created?

Why don't we just give you our pricing and when patients need cataracts, just send them our way. So that's what I did. I can't compete with these. I can't compete with these guys. They are great. Their pricing is great. If I had a cataract, I would go to one of these two. And if I can't compete with them, I don't even 

try.

[00:30:44] Dr. Bravo: Wow. But do you have dedicated teams for different surgeons? 

[00:30:48] Dr. Keith Smith: No. No? No. And that's another one of our secrets. Every scrub tech and every nurse in our facility has to be able to perform with or assist on every single type of case that we do. We do not allow staff specialization. , that means that we have to hire very special people who are willing to learn how to do urology, gynecology, your nose and throat, pediatrics, orthopedics, oral maxillofacial. Plastics, all the above. I go, I go on and on our website and see what we do. 

[00:31:30] Dr. Rogu: I thought in the medical world, it was the new thing where you had to be a super specialized in one procedure. Like you do only hips and you'll get the best outcomes or you just do, you know, not to be a generalist. 

[00:31:44] Dr. Keith Smith: Now, as a surgeon, there is some truth in that. I believe there is some truth in that for surgeons who perform the same procedure over and over and over. There's no doubt in my mind they get better at it than someone who does it occasionally. But for scrub techs and for nurses at our facility. We just demand that they learn how to assist on every single case that we do. And so the learning curve is pretty steep, but it's so rewarding and there's no burnout for those people at all. 

[00:32:17] Dr. Bravo: I'm gonna get back to the burnout in a second. But from my perspective, part of the problem with American health care It's the same problem that we have with municipal unions. So whether it's the school teachers or the firefighters, the police or sheriff in your county, they sit down with the government officials and they say, we need pension acts. We need healthcare X, we need salaries X, and the elected officials don't want to be unelected, and they need these unions to support them, and they're not dealing with their money, so they're happy to just say yes, and the taxpayers are paying the bill. In healthcare, we have the same problem.

UnitedHealthcare sits down with... The not for profit quote unquote, because they always make a profit and their executives get paid better than anyone else hospital in Oklahoma city. The hospital says, well, for the hip surgery, it's going to be 170, 000. The insurance company never says, oh, well, I can go to Dr. Smith's center over there and I can do that for 17, 000. 170 sounds great. We get 15% of that. And, you know, we'll just go back to our customer, our customer, you know, the people that employ you and we'll raise Health insurance. 

That's 

[00:33:44] Dr. Keith Smith: exactly how it works. We're done. We're done because as the insurance company, you know, 15% of 200, 000, 30, 000 per transaction, 15% of 15, 000 isn't 30, 000 per transaction.

[00:34:00] Dr. Bravo: Why? Why would I even bother? You know, I want margins. 

[00:34:06] Dr. Keith Smith: They want margins. They want to skim off of the fictitious discounts that they provide. You know, your insurance agent is always thrilled when you call him and tell him you have hail damage on your roof. Because they're just going to get a higher commission the next year when your rates go up.

And it's very, very similar process. That's why insurance companies don't want cheaper and better. Insurance companies want disaster. That's how they make, that's how they make big money. And then they just jack up everybody's rates. So, you know, they may pay a claim, but you're going to pay that claim over and over and over going forward.

[00:34:47] Dr. Bravo: It's not just you, we, society pays that claim. That's right. Because we all get fleeced together just like the taxpayer does. And do you see in your surgeons, in your staff, less moral injury and less burnout than at the hospital systems? Because people are mission driven, taking care of patients, and they have a joy of taking care of patients?

[00:35:12] Dr. Keith Smith: Yeah, there's no doubt that that's true. Herb. We don't deal with insurance companies. We don't deal with the government. The patients that are at Surgery Center of Oklahoma are there because they want to be there. We are not exposed to any sort of patients that have an entitlement attitude. They show up already grateful that our facility exists because we're saving them tens of thousands of dollars sometimes even on a fairly simple surgery.

So yeah, we, I have, I have employees that have worked with me from day one, from May 28, 1997. I still have some of those people working for me. So they, they typically come to work for us and they don't want to leave. if they do want to leave, it's just not their type of place. But the ones who want to work hard and have a really gratifying life and career and taking care of patients who are really, really grateful and appreciative for their service.

Those people tend to come work for me and they continue to work for me. 

[00:36:20] Dr. Bravo: Interesting. Well, and so how would you translate this into the community based pediatrician in America that's struggling the workforce of the American pediatrician because it's been undervalued underpaid an underappreciated for all the work they have done for the American society.

I mean taking care of somebody's tonsils is great, but when somebody can prevent a cervical cancer, it's even greater. What are your thoughts? How could we use your model to get rid of all this nonsense that's preventing us from having a relationship with our patients and doing the work we went out to do from the beginning?

[00:37:06] Dr. Keith Smith: Well, the big elephant in the room that's preventing... patients and physicians from having a traditional relationship is the simple fact that it is not the patient many times that is actually paying for the service. It's some third party, it's some faceless whatever. So I would recommend the pediatrician listeners on this show go back to whatever episodes you've done with Lee Gross.

And watch that very carefully and listen to Lee. Lee was disgusted that concierge type medical service was only available to the very wealthy. So, simultaneously, Lee and another doctor in Kansas named Josh Umber I came up with this idea that why can't the working man, why can't the blue collar, hardworking, nose to the grindstone, working American have concierge medical service?

So they came up with this subscription idea where you pay 60 or 80 a month and you have unlimited access to a physician like Lee Gross or Josh Umber or many of the other physicians in the United States that ascribe to that model. It is a perfect Model for the pediatrician.

[00:38:33] Dr. Rogu: I think it's a little bit, I think it's a little bit more than 60 a month.

[00:38:36] Dr. Keith Smith: One. Well, it depends. It depends. I'm my son who lives in new Orleans just signed up for a direct primary care Experience in the metery area and he's paying 50 a month. So George, it varies some places. It's 50 someplace. It's 60, some places it's 80 here in Oklahoma city. Now it's 99. It sounds to me like capitation.

It is that the diff you're exactly right. But the problem that a subscription based direct primary care physician has. Who succumbs to the idea that, well, the money's rolling in, whether I see these patients or not, is one that opens right across the street from him. That doesn't act that way. So free market competition, and I've already seen it at work.

I know firsthand of a physician who opened a direct primary care practice. and just got lazy. Money's coming in. Why do I need to see anybody? And he was destroyed when a group of physicians opened right down the street from him and opened this, their direct primary care practice. And they treated patients the way patients ought to be treated.

But yes, it is a capitation model and there is a temptation there, but it is not a, not a concern at all. If there's competition and, 

[00:40:09] Dr. Bravo: You know, if you really do the math, the average American pediatrician has a panel of 1700 kids, which is really unmanageable. You can't, you can't really do quality care when you got 2000 kids, but you know, if you're lucky you're grossing 800, 000 a year.

So it's 40 per kid. You have. If you could get a thousand kids pay you 80 a month, you'll be making the same money. And you would be able to actually sit down with a diabetic, sit down with the obese patient. Some people need to be seen every week. That's just the nature of the game or a phone call every week.

And some people don't need to also with 

[00:40:54] Dr. Keith Smith: that kind 

[00:40:55] Dr. Rogu: of a model, you are also expected to be at everybody's beckon call. Daytime, nighttime, Sunday, holidays, anytime. 

[00:41:05] Dr. Keith Smith: That's right. And so patients that are abusive of that. Yeah. The physician is at liberty when the month ends to not renew that arrangement.

Yeah. So it goes both ways. It's got, to be mutually beneficial. But most patients are not going to abuse that because they don't want to put that relationship in jeopardy. And they like you. It's very, it's very accountable on both sides. 

[00:41:33] Dr. Bravo: When was the last time, Dr. Smith, that you called your accountant at two in the morning?

Because you weren't sure if the return was right or wrong. 

[00:41:41] Dr. Keith Smith: You know the answer to that. Never, right? 

[00:41:45] Dr. Bravo: Never. Because you value your relationship with your accountant. You probably have his cell number, but you're not going to come home at two in the morning and wake him up and ruin his day. You send them an email, you know, he'll, he's conscientious.

He'll get back to you when he gets into the office. 

[00:42:02] Dr. Keith Smith: Yeah. And most, most of these direct primary care practices limit their panel to 600 patients, maybe 650 patients. And so they have, the time to spend with patients, you know, with the diabetic patient that, you know, in the beginning days, you know, they may need to be seen twice a week.

And they have time to do that and patients appreciate that. And they don't want to do anything to jeopardize a relationship like that. 

[00:42:29] Dr. Bravo: Yeah. Or, or even just a quick text. What was your kid's glucose today? You know, how are we doing with the glucose? Okay, well, you know, we're not going to normalize it in the first two weeks of treatment, but at least it's not five or 700.

So we're in the right path. Sometimes people just need encouragement, you know, we're going to get through this together, you know, and, and if I can't solve it, I can get you in touch with other people that are smarter than me that can solve it for you, but that, you know, there for you. 

[00:43:00] Dr. Keith Smith: And think of the difference pediatricians in the United States could have made if they subscribe to that model and all these kiddos that had these mental health issues after being locked down in COVID.

All of those kiddos could have had, you know, access once, twice a week. to a pediatrician who they know, who they trust, who they can talk to, you know, how many disastrous outcomes from mental illness might have been prevented. So I think, I think for the pediatrician, the direct primary care model is a godsend.

It is a wonderful thing and certainly a way to walk away from the status quo, have great relationships with patients and prevent all the burnout and moral injury that's inevitable if they stay on their current path. 

[00:43:57] Dr. Rogu: Yeah, this sounds like a really nice thing for somebody that lives in Long Island and nice community that has a nice job that could pay for things in pediatrics, the average mother and father's age. It's like 2527 30. They're young people, usually with either in school or just after school. With a kid that they really this a hundred dollars a month extra, they can't pay because they already have insurance. 

[00:44:27] Dr. Bravo: George is about choices. I pay 200 a month. Yeah. We just couldn't afford it. I pay 200 a month just in cell phones. And you know, these families, mom has a cell phone, dad has a cell phone, kid has a cell phone, you know, they have cable subscriptions. So now we're talking about 400 a month so they can't afford it. They just never been asked. to pay for the service they're receiving. Yeah, 

[00:44:57] Dr. Keith Smith: Lee Gross, Lee Gross makes that point a lot of times less than a cell phone bill.

Yes. And you have full access, full access to a doc. And you know, the, the whole question of, , what about the poor? I, I'll push back. I mean, what about the rich? I mean, no one can afford the insane. non free market pricing that this industry has inflicted on Americans. No one can. So, as the market develops, as this free market develops, quality will soar.

And George, I think prices will actually fall even more. And I think that's the way to wrap our arms around economically less fortunate people is to bring pricing to them that they can manage. And so the market I believe given a chance will do just that. And we're gonna, I believe we're already beginning to see that.

 Walmart is opening up primary care clinics and they're going to be really, really well priced. And people, whatever you think about that model, people are going to have access to care who otherwise would have seen The status quo pricing is a huge barrier. 

[00:46:17] Dr. Rogu: Why are they doing that? Let me go take care of my kid.

He's sick, strep throat, nurse practitioner takes care of it. Oh, by the way, let me go buy milk and some bread also while I'm 

[00:46:27] Dr. Keith Smith: there.

I don't, I don't know why they're doing it. That's why, 

[00:46:29] Dr. Rogu: because they need the 

foot traffic. 

[00:46:31] Dr. Keith Smith: Well, then it's a, then it's a loss leader and people are... Yeah, it's a loss leader. But then they put a nurse practitioner in there. They put a nurse practitioner in there and they don't care. A lot of burnout pediatricians don't care and they're just seeing as many patients as they possibly can. I'm not saying it's a great model. I'm saying that I'm saying that that access. Whatever it is, it's not as bad as no access. 

[00:46:58] Dr. Bravo: Lee and Josh are working also with some state governors, they're forward thinking about how to integrate Medicaid into this model.

Because it can be, and it would be a lot less expensive. For the states, if they had pediatricians taking care of kids who, you know, are on government assistance, why 

[00:47:17] Dr. Rogu: don't they just pay the pediatricians that are taking care of these state Children a fair amount of money, 

[00:47:24] Dr. Keith Smith: not the 30 

[00:47:26] Dr. Rogu: parity with Medicare?

[00:47:27] Dr. Bravo: They did that once. Because UnitedHealthcare is in the middle, and as long as Optum and UnitedHealthcare are in the middle between you and the state, they are going to take the bigger piece. 

[00:47:39] Dr. Rogu: Well, you know, they claim the poverty card. Well, we're working for the state, so there's no funds for you. 

[00:47:44] Dr. Bravo: Really?

You know, they make tons of money on the Medicaid program. 

[00:47:46] Dr. Keith Smith: Well, they are not, they're never going to pay a fair wage because they know exactly what they're doing. They're never going to pay a fair amount. Because that's the whole point. Price controls cause shortages. They know that if they underpay physicians, then physicians in all likelihood will change their behavior and not see as many patients and say, well, you know, I'm going to. I'm going to limit my Medicaid panel. We're seeing that with Medicare right now, where I know a lot of physicians that are willing to see only one new Medicare patient a month. And so these price controls, this is like gravity. Price controls cause shortages. And that's the whole point. These the people that set these fees are not stupid.

The people that set these fees are evil, and they intentionally want to ration care. The last open heart surgery I provided an anesthetic for in 1992 was six hours long, horribly difficult case. I was paid 285 by Medicare. The last total knee I performed on a Medicare beneficiary in 1992. I was paid 78.

And I realized by that time, this is not personal. They know exactly what they're doing. They are sending a signal into the marketplace. And I responded with a signal of my own that I thought was rational. I quit and I didn't quit taking care of Medicare patients. I just quit filing claims. I thought I'm not going to grant legitimacy.

To a illegitimate system and organization. But the reason they pay so poorly is they want to ration care and that's just how they do it. They do it with really crappy payments. And 

[00:49:43] Dr. Bravo: so we have a crisis of primary care doctors in America. The academics will tell you it'll hit in 2030, but it's already, it's already here.

It's already here. You can't recruit pediatricians. You can't I have a friend who needs an endocrinologist, they'll wait to see the endocrinologist six months. My dad needed to see a nephrologist and he's a friend of a friend, you know, and it was like a four month wait, but you know, as well, my dad was just being a little bit bougie about his care.

So I'm like, there's no need for me to call a doctor and get him in sooner. There's really basically nothing wrong with my dad, but, but if you really do have kidney disease, you're going to wait three to four months. In northern Virginia, that's full of doctors to see an adult nephrologist, you're going to wait six months to see an adult endocrinologist.

You're not going to see a pediatric psychiatrist. The way to the three universities is two years. If you want to see a pediatric neurologist in northern Virginia, and we have two children's hospitals. My only option is to send you to the ER, so that the attending who I know because I've known them for 20 some years. will be rounding and will come down to the ER because he or she has no choice and then admit you and then they'll take you into their clinic. That is just, excuse my language, but back. You know what? Backwards. 

[00:51:15] Dr. Keith Smith: It is, but it, it is. It's an economic consequence of price controls and heavy handed central planning.

Yeah. And the government never gets anything right. They screw everything up. Yes. And, and, you know, Lee and I argue about whether Medicaid can be administered with the free market in mind. I don't believe it can. I think anything the government runs or regulates is oil and the free market is water.

It just doesn't mix. One of my favorite economists, Hans Hoppe, has said markets deliver goods. Governments deliver bads. Mm-hmm. , I, I love that. It's just everything they touch just turns to crap. And so we, we made, we made a run at trying to help the state of Oklahoma's self, self-funded health plan for the state employees.

And we tried to mix that with our market approach. And it was a disaster because ultimately if government is involved, it's political. And the hospitals came in and passed out however many bribes they needed to and killed it. So, it's just tough. Whenever government gets involved, there's you know, people are, people are not well meaning.

These are not angels who control these government programs. These are not angels. These are very self interested people. They don't care anything about whether any care is delivered at all. I don't care what they say. 

[00:52:54] Dr. Bravo: No, they care about being reelected. Absolutely. And the power that comes from being reelected and the money that comes from being in politics today.

[00:53:03] Dr. Keith Smith: Yeah, it's the rare, it's the rare legislator who comes along who actually does champion free markets, mutually beneficial exchange, and actually does care that there is fair dealing. But they're, they're pretty hard to come by. 

[00:53:19] Dr. Bravo: And I mean, it may be very unfair, but they're very ignorant. And when I, when I say they're very ignorant, when you actually talk to them, they say there's a thousand issues.

That affect my constituency and healthcare is one of those thousand issues and I, there's just no way I don't have the bandwidth or the money to have enough staff to understand each one of those thousand issues at depth so I can change it. So I got to count on the lobbyists that come to my office to inform me.

And help me do what I can for my constituency because I don't have the budget to hire my own staff and you know, and there is some truth to that. I mean, there are thousands of issues that people are adamant and passionate about, and they're stuck in that trap, but the government's never the solution. Who advocates?

Who advocates for us? Because other than you, Lee Gross, the DPC movement, and Sue Cressley, who is a champion for pediatricians, she has been a champion for pediatricians for 20 some years, she says it very clearly. If we don't value pediatricians, if we don't pay them properly, if we don't make their working conditions good, if we don't decrease the student debt that they're burdened with, there is no ROI in pediatrics.

And without pediatricians, just like without moms, there is no healthy children. And without healthy children, there is not a healthy, thriving democracy. Who else out there says... We need to show up primary care and make this country healthy again in a free market way. Well, 

[00:55:09] Dr. Keith Smith: I think the key is not to attempt to reform or shake down the overlords. I think the key is to walk away. The key is to secede. The key is to remove the leverage. that government and the insurance overlords have over us. And that's what that's what I did. That's what the surgeons that I work with did. That's what the 

, which I've co founded.

That's what we advocate our last annual meeting, my speech there, I, I drove home the point that this free market movement is not a revolution because a revolution is where you want to take over. You want to take over the system. That's not what this is. This is a rebellion. This is an alternative. This is a, you know, you all go on and do your disastrous thing.

We're going to go do our thing. And then it's just an inconvenient reminder that cheaper and better is right there, right around the corner. And it's just a cheaper and better alternative that the other side cannot ignore. I think rebellion is the way to think about how things can change. revolution where we try to get the overlords to change or we just elect better people.

I don't think is the answer. And, and I think that that is that is not the proper way to get us from A to B. And, and how 

[00:56:49] Dr. Bravo: do people reach this new medical society or medical 

association? 

[00:56:54] Dr. Keith Smith: The free market medical association is FMMA. org. And anyone can join. We would love to have a whole bunch of pediatricians join Lee Gross is a member, Josh Umber is the Direct Primary Community, Direct Primary Care Community is the Cost Sharing Ministries are members lots of self funded companies.

Lots of surgery centers. There's, there's a whole bunch of members. We would love to have pediatricians and primary care physicians, whether they're direct primary care or not, join. And, and it's a, it's a growing movement. It's has 37 state chapters now. It's a rebellion. I mean, it's, it's a, it's a bunch of very, very energized People that are doing things one patient at a time, one practice at a time not attempting to change. Medicaid or trying to change Medicare or trying to get government officials, you know, to help us with some kind of heavy handed mandate or legislation. That's not what it's about. It's really individualized one patient and one practice at a time. 

[00:58:06] Dr. Bravo: One more last question for you. Are you part of the National Board of Physicians and Surgeons?

The NBPAS? No. So NBPAS is The alternative to a b P. Okay. So instead of having to go through all this monkey dooo of, you know, outrageous fees, I mean right. Outrageous. I mean, the, the c e o of the American Board of Pediatric makes 800,000 a year. The starting pediatrician makes 160. How is he, how is he worth?

four times what a practicing physician taking care of Medicaid children is worth. Now it's crazy. 

[00:58:50] Dr. Rogu: Technology is pretty cool. 

[00:58:53] Dr. Keith Smith: I'm old enough that when I became board certified as an anesthesiologist, I didn't, I never had to recertify and I don't intend to. When they first came out with this stuff, you know, recertification was voluntary and we knew what was coming. We knew they were going to slam.

And the American society of anesthesiologists is one of the worst because you cannot actually receive any CME credit that matters unless they sell it to you. So it's disgusting. That's a racket. And so I now my brain is awake a little better now I am familiar with the National Board you mentioned and I think that's great to have an alternative.

[00:59:36] Dr. Bravo: I think just out of solidarity, you know, people should join. Just to say, like you said, this is. You know, we're succeeding. You're not going to make me take that MOC anymore. I'm just going to do my CME and pay my 200 a month, a year. I'm sorry, 200 a year and continue to have my board certification.

Or maintenance certifications, what they call it, because this other stuff is who it's just a bunch of I'm going to pick your pocket and make you jump for hoops for no discernible good for society, just so I can live all in North Carolina with a million dollar salary. Now, that is unfair. That is just on American, and it shouldn't be allowed.

I agree well, thank you so much for your time. Thank you. I agree so much with you. I wish I wish I had this agree with you on, but I think you're doing a phenomenal job. I admire you. I think, you know, you've proven that we can't do this better less expensive. And both the patient and the physician be happy with the interaction, which is sorely missing in American health care.

[01:00:52] Dr. Keith Smith: Well, thanks for having me. We, perform all kinds of pediatric surgery, including cochlear implants and pediatric urology, pediatric general surgery, pediatric ophthalmology. those air. Like I said, if I could do that 100% of the time and stay busy, that's what I would do. That's that's what I love. So we are kindred spirits.

[01:01:16] Dr. Bravo: I think I can tell you're a pediatrician at heart. Honorary pediatrician.

[01:01:22] Dr. Keith Smith: Thank you. I accept that. 

[01:01:24] Dr. Bravo: All right. Well, thank you so much for your time. Keep doing the good work you're doing for the city of Oklahoma. Thank 

[01:01:30] Dr. Keith Smith: you. We appreciate you having 

[01:01:32] Dr. Bravo: me on the show. Thank you.

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