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In an effort to draw new customers, Galichia Heart Hospital is cutting rates for uninsured patients and those with high deductibles.
It also has an agreement with a Florida surgeon who will do procedures in Wichita for patients from here or elsewhere.
The moves are an extension of Galichia Heart Hospital's entry into the medical tourism field, in which hospitals — usually in other countries — offer deeply discounted rates to draw patients.
Stephen Harris, Galichia's CEO, said the U.S. hospital pricing system makes it economically feasible to discount rates and still make money.
For decades, he said, hospitals typically have collected 35 to 40 percent of their charges from insurers. And they've billed uninsured patients for 100 percent of the charges.
"The 'charges' really don't mean anything," he said. "We've got these 'charges' that nobody pays."
Typically, medical tourism programs took Americans to other countries for lower-cost medical care.
But some U.S. medical facilities have started medical tourism programs of their own, hoping to draw foreign patients as well as Americans who are uninsured or who have high-deductible insurance plans or health savings accounts.
The Surgery Center of Oklahoma in Oklahoma City, for example, advertises flat-rate discounted fees for outpatient procedures ranging from knee scopes to gallbladder removals.
"If we're filing insurance for you, the prices do not apply," said Keith Smith, its medical director and co-founder. "Our insurance price has always been higher.... Our cash price has always been lower."
Ron Whiting, executive director of the Business Coalition on Health Care, said new ways of bringing competition to the marketplace and more transparency about cost and other health care measures can help improve care for everyone.
"It does kind of stir the pot in getting us to think about different ways that care can be provided and different ways we can seek it out," he said of Galichia's latest efforts.
Harris said the discounted prices for those without insurance will be about half of what has been charged.
For example, he said, the full hospital charge for a typical endoscopy had been $1,100; it will be $550 for an uninsured patient. A common open-heart procedure had averaged $40,000; it's being cut to $10,000.
The discounted prices aren't flat rates, he stressed: An individual's cost will depend on the circumstances of the case.
Does the hospital risk losing money by discounting its charges? "We don't think so," Harris said, adding that the prices still are above the hospital's costs.
Galichia also is counting on more business through a facilities agreement with Florida surgeon Arnon Krongrad, chairman and CEO of Mobile Surgery International.
Krongrad recently was at Galichia to do prostate surgery on a patient who flew in from South Carolina.
And yes, the patient saved money and Krongrad made money by doing that. "This was not a charity case," he said.
In addition to Galichia, Krongrad works with hospitals in Florida, Mexico, Panama and Trinidad.
Krongrad said his business is about meeting the needs of patients and payers. "Cost containment happens to be an incredible byproduct of what we've done."
Krongrad said his patient didn't have insurance, but the concept of having patient and surgeon meet at a less-costly location is one that should appeal to employers who provide insurance as well. "There's a whole range of people at risk who are potentially going to find value," he said.
Galichia hopes to pick up more medical tourism traffic beginning Jan. 1 through a contract it has with AWAC, a medical management company based in Augusta, Ga.
AWAC works with 20 third-party administrators of self-insured health plans, acting as their medical directors. As part of its contract, it will promote Galichia's medical tourism program.
Galichia started posting its rates online nearly two years ago, offering a flat rate for open-heart surgery and then for other procedures.
"We aimed for the heart and hit the hip," Harris said. "We probably do five hips (replacements) for every heart we do. Or maybe 10."
Harris doesn't expect the discounted rates or medical tourism, from Florida or elsewhere, to dominate the hospital's business.
It makes up 2 to 3 percent of his business now, he said, and "I don't think it'll every be more than a single digit."
The patients Harris is hoping to attract pay up-front for their care, which means he saves on administrative and paperwork costs.
