As residents see their health care costs rise, several local independent providers are considering a collaboration to lower costs for self-funded employers and stay competitive in the market.

OSS Orthopaedic Hospital in York Township is helping to lead the charge locally for free-market health care.

Nick Pandelidis, a partner at OSS Health, said the idea stems from a surgery center in Oklahoma City, which began posting prices for its outpatient procedures in 2009.

Employers in Oklahoma quickly took notice when they saw that those prices were consistently 50 percent to 80 percent less than what they were paying through their insurance.

OSS Health has followed that lead, posting prices and quality assessments for its services on its website, and other independent providers, including Gastro Associates of York and Leader Surgical Associates of York, have shown interest.

The Pennsylvania chapter of the Free Market Medical Association will host a conference Friday at the Crowne Plaza in Harrisburg to discuss the plan, with Pandelidis set to deliver the closing remarks.

The plan: The way the plan would work, Pandelidis said, is as an add-on to a certified insurance program for self-insured employers. Nationally, about 40 percent of companies are self-insured, according to Rebecca Bruce, a senior practice administrator at Leader Surgical.

Under the plan, when an employee needed surgery, the employer would provide an incentive for the employee to choose the high-quality, cheaper option — with the employer paying the copay — because it would save the employer money.

The more local providers sign on to be a part of the plan, the better, Pandelidis said.

Alone, OSS Health offers services that only cover about 16 percent of the money employers typically spend on health care, but with Leader Surgical, Gastro Associates and others, the group as a whole could cover 30 percent to 40 percent of such services, making it a more attractive option.

Bundling: Bruce said her company's interest is about getting in front of a looming Centers for Medicare and Medicaid Services (CMS) move toward bundling more services.

Currently, a patient is required to pay three separate fees for outpatient surgeries: surgeon, facility and anesthesia, Bruce said.

CMS has discussed bundling those services into one payment, making it the job of the facility to divide that payment accordingly.

Bruce said Leader's surgeons, who are part of the WellSpan network, can perform surgeries in any facility, and the move toward bundling services could hamper their ability to operate at Leader's ambulatory surgical center.

Competition: In the age of the Affordable Care Act, Bruce said patient population is very important, and insurance plans tend to favor larger providers in terms of lower copays for patients, which makes it difficult for independent providers "to keep the lights on."

Bruce and Pandelidis both said their prices are consistently lower than hospital rates.

Pandelidis said the emergence of "mammoth" health care systems and consolidation of the health insurance industry has eliminated competition, leading to rising costs without a similar rise in quality.

Pandelidis said he believes the free market, which has already spawned improvements in sectors such as technology, transportation and entertainment, would improve health care.

"In a free market, the buyer always wins," he said.

Bruce said Leader Surgical is just in an exploratory stage with regards to free-market health care, but Pandelidis was more confident about its unveiling in York County.

"We confident that come Jan. 1, (2017,) this will completely change health care in this area," he said.

— Reach David Weissman at or on Twitter at @DispatchDavid.

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