| November 14, 2013

From Africa to Anadarko, a Story of Love and Markets

This is a story of love, and markets. It is about a family, and a group of doctors.

The Berkleys live on a farm in the southwest Oklahoma countryside, between the towns of Chickasha and Anadarko.

Mom and Dad are Caucasian. Their adopted children came from Haiti and Africa.

Two of the kids, Joshua (age 11, born in Liberia) and Betty (age 9, born in Ghana), needed surgeries earlier this year on herniated navels. That invasive procedure is normally quite expensive, with or without insurance. Betty’s condition was especially severe, with a protruding navel rising several inches from her belly.

The Berkleys are part of a MedShare program, in which families pool resources for mutual benefit. For the hernia procedures, however, Mr. and Mrs. Berkley wanted to see if they could afford the operations without dipping into their co-op plan.

So, Dad—Danny, age 57—checked around. The procedure would have cost roughly $20,000 (each) at a facility in Chickasha. They heard a big-city hospital might do it for $28,000-$30,000 each. The local hospitals eventually had quotes ranging from $6,000 to $10,000.

That was too much. At the Surgery Center of Oklahoma in Oklahoma City, the price listed online was $3,100.

Surgery Center got the business, and the opportunity to meet Joshua and Betty.

Danny and the kids went to Oklahoma City to meet Dr. James Totoro, hernia surgery specialist, and a date for the operations was set.

On the day before the surgeries last month, the couple learned that physicians at the facility, including co-owner and founder Dr. G. Keith Smith, had decided to do the work at cost.

That was $2,600—total for the two. Buy One, Get One (BOGO), and take another $500 off!

Joshua and Betty are back with their family, and thriving. Mom Debbie, 55, described the facility’s staff as “respectful to us and to our children. They were kind, generous, and professional.”

Three decades ago, Danny and Debbie Berkley had two children of their own before discovering she could not bear more biological children. And, they had already adopted four kids. After a successful run in the construction business, making enough income that they might have retired in their 40s, if they had wished, they fulfilled lifelong dreams by entering the missions field.

They have served on mission stints in Botswana and other spots in Africa, including South Africa. Along the way they have built their family through a series of adoptions. As evangelicals in this part of the world say, these folks “have a heart” for children with problems. Every child who is now part of their big, happy family has varied issues—and two of them have special needs.

Smith and the co-founder of Surgery Center, Dr. Steve Lantier, left the medical mainstream in the 1990s. Determined to establish a market-oriented surgery facility, they were told by colleagues at big hospitals and representatives of big insurers that it would never work. Back in those early days, Smith walked by faith—faith in the market and in human motivations.

Today, the Surgery Center of Oklahoma has garnered international attention—touted in the New York Times, in a documentary, and on CNBC, John Stossel’s program on FOX, and elsewhere.

Smith recalls, “Our distrust of hospital administrators and the corporate medical world had become so complete that what I now understand to be an entrepreneur’s business calculation was made assuming that all we had been told was false. This, it turns out, was good judgment on our part.”

He knew something was wrong with American health care, but did not know all the details: “One of the first clues that something was wrong was that most insurance companies, in spite of our quality and pricing, avoided dealing with us.”

Keith Smith is now both a passionate libertarian and a kind of evangelist for transparent health care pricing—medical service free of both government and insurance company mandates.

You could call it cash and carry, or the nearest thing you’ll see to it in modern medicine. His prices run somewhere between one-tenth and one-sixth as expensive as large insurance-oriented hospitals in our region.

“Our facility is now frequented by people from all over the country and outside, patients with high deductibles, patients waiting in lines, patients with no insurance whatsoever, and increasingly, patients whose care is paid for directly by the companies for which they work, the ‘self-insured.’ You can imagine the conversations that I’ve had with the CEO’s of large companies who have been paying $30,000 for operations that they now see could have been obtained for $3500 at our facility.”

Dr. Smith is a happy man. You might even call him a happy warrior.

Part of his happiness flows from helping people like the Berkleys, including those two children from Africa. Services are delivered and received without middle-men, at a mutually agreeable price, for mutual benefit, and in freedom.

Smith is also happy to see his facility becoming a hub for medical tourism—drawing patients from Alaska, Canada, and elsewhere.

But happiness does not make Keith Smith a Polyanna.

Although his facility delivers medical care “better and cheaper” (as a liberal admirer put it in a blog post), Dr. Smith knows what lies ahead: “The medical price deflation resulting from a new competitive healthcare market poses an incredible threat to the central planners who are counting on the runaway pricing and market chaos resulting from Obamacare, that price ‘crisis’ intentionally created to usher in the sequel to their plan: single payer.”

Patrick McGuigan (M.A. in history, Oklahoma State University) is Oklahoma City bureau chief for, editor of CapitolBeatOK, associate publisher for The City Sentinel newspaper, and a regular contributor to both Perspective and to News9, the CBS news affiliate in Oklahoma City.

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