Friday, October 3, 2014

Free Market Medical Association – The First Meeting and the Dream

Deep into that darkness peering , long

I stood there, wondering, fearing,

Doubting, dreaming dreams no mor-

had ever dared dreamed before.

Edward Allen Poe (1809-1949 ), The Raven

Yesterday I interviewed Doctor Keith Smith, an anesthesiologist who co-founded the Surgery Center of Oklahoma 17 years ago and the Free Market Medical Association (FMMA) in the spring of 2014.

The other co-founder of FMMA is Jay Kempton, president and CEO of the Kempton Group, a health benefits firm in Oklahoma City which serves 180 employers in Oklahoma and Texas.

I spoke to Mr. Kempton and to Charles Sauer, FMMA executive director, and to others who attended the meeting. One hundred and thirty five people were in the audience, which included physicians, corporate executives, and third party administrators.

In doing the interviews, I sought to gain impressions of the first annual meeting of the Free Market Medical Association , held in Oklahoma City on September 26 and 27.

Dr. Smith said the meeting was an “overwhelming success”and “exceeded expectations.” The theme of the meeting was “How to practice free market medicine and how use free market care to save money and get better results.”

Those to whom I spoke lauded the free-wheeling dialogue and optimism about prospects for changing the system and for creating a lower-paying, clinically improved, and more financially affordable system.

The Dream

Dr. Smith, Jay Kempton, and Charles Sauer , movers and shakers of the Free Market Medical Association, dream of partially replacing the current system, based on third party payments from third party intermediaries, with an alternative free market system, based on payments of patients and employers directly to physicians and physician-owned facilities that perform ambulatory surgeries and provide primary and specialty care.

This dream is based largely on what has happened in Oklahoma City, a city of 1.5 million, and in scattered markets in similar ambulatory surgery centers elsewhere in the U.S.

In recent years, the Surgery Center of Oklahoma has announced upfront, online prices for patients and corporate payers, for ambulatory surgeries, the total price of which includes anesthesiology and facility fees.

Astonishingly, the surgery center prices are 1/6 to 1/10 those charged in hospitals and hospital-owned facilities. The response has been electric, with patients spontaneously coming from across the country and other nations. Ironically many of the patients are already insured.

Indeed, many are covered by ObamaCare approved health plans. The health exchange plans, with their high premiums and unaffordable deductibles has stimulated interest in the Surgery Center of Oklahoma and in the Kempton Group, and in concierge medicine in general . FMMA membership has grown as well. Patients and corporations have found the surgery center prices are cheaper than paying insurer premiums and deductibles. Even a publically-funded organization, Oklahoma Country, is sending patients to the center, saving over $1 million in its first year of participation.

Growth in Dream

The dream is that once word gets out to wider audiences about the remarkable savings and positive results and satisfaction in ambulatory physician-owned facilities and concierge practices, owned mostly by primary care practitioners but also by specialists, the present health care system will begin to unravel and decentralize.

According to Dr. Smith and others, those attending at first annual meeting exuded optimism. Speakers were well-received, the audience was enthusiastic, dialogue was free-wheeling, and ideas for new business models flowed.

It was, as executive director, Charles Sauer, said, “A perfect storm.” I asked Dr. Smith, how Oklahoma city hospitals had responded, and he succinctly commented, “With an eerie silence.”

We shall see how this Free Market Medicine scenario plays out.

It faces formidable headwinds from hospitals, health plans, and government who will have their own stories to tell. But it will also bring to light the heavy costs of third party administration, which accounts for 50% or more of the health care dollar. The key to success is likely to be how corporate America, which covers more than 150 million Americans, responds.

For more information and details, contact Dr. Keith Smith at the Surgery Center of Oklahoma (ksmith@surgerycenterok,com), Jay Kempton at the Kempton Medical Group( jkempton@kemptongroup), and Charles Sauer (

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