News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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This phenomenon is a response to the tens of millions of patients who now have high deductibles that must be met before their insurance kicks in

There’s a new wrinkle on bundled pricing for medical laboratory tests and other healthcare services. Some providers and payers are creating bundled pricing options specifically for the tens of millions of patients now covered by high-deductible health plans (HDHPs).

Patients covered by HDHPs are responsible to pay thousands of dollars out of pocket before their health insurance kicks in. Thus, it should not surprise clinical laboratory professionals that providers and health insurers are collaborating to created bundled pricing (AKA packaged pricing) options that cater to self-pay patients.

Bundling is a method in which healthcare services are grouped together for one pre-determined price. It is intended to decrease costs while providing patients with increased access to high-quality care. Clinical labs and pathology groups will need to negotiate with the organizers of these bundled medical services in order to get adequate payment for their testing services.

Bundled service options are gaining in popularity because more Americans are paying out-of-pocket for medical care. Some people have no health insurance coverage at all. Meanwhile, tens of millions of Americans are enrolled in high-deductible health plans. These patients are typically responsible for paying thousands of dollars in out-of-pocket expenses before their health insurance begins paying for medical services. With so many people seeking more economical choices for their healthcare needs, providers, hospitals, and health insurers are exploring the options bundled pricing offers.

Bundled Healthcare Encourages Patient Engagement

One new twist in the healthcare marketplace is a type of company that specializes in negotiating bundled healthcare options that service the self-pay market. These companies make their offerings available to patients through websites designed specifically to be searched by patients who want to select healthcare providers based on cost and performance.

One example of this new type of company is MDSave of Brentwood, Tennessee. Launched in 2012 by co-founders Paul Ketchel and Clyde Spencer, the MDSave website offers patients discounts of as much as 60% on medical care, including office visits, surgeries, and X-rays. The self-proclaimed “world’s first healthcare marketplace” does this by collaborating with hospital groups and ambulatory surgical centers to negotiate discounted rates for various services with hospitals and doctors. It then packages those services into a single bundle.

On their website, patients can shop for hundreds of procedures, including elective surgeries and routine care. Users also can read reviews and compare pricing for local providers before selecting their best option. Patients then pay up front for needed services, with all fees combined into one bundled price.

When a purchase is made through MDSave, the chosen doctor’s office is notified and the patient is contacted to schedule an appointment. The bundled price includes all costs for medical personnel, the facility, and any related services, ensuring there will be no additional medical bills for the patient.

Patients Can Compare Costs of Procedures

There are cost comparisons for numerous procedures listed on the MDSave website. For example, the average cost in the United States for a mammogram is $428 and the average cost for the same procedure through MDSave is $187. The average cost through MDSave for a polysomnography sleep study is $1,271 versus the average national rate of $2,911.


“The actual price of any healthcare service is usually much more complicated than just the fee for the service, as anyone who has ever received a bill from a consulting doctor they never saw can attest,” wrote MDSave CEO and co-founder Paul Ketchel in a blog post on the MDSave website. (Photo copyright: Nashville Medical News.)

Costlier procedures can result in even higher savings when choosing a bundled rate through MDSave. For example, the average cost of a colonoscopy in the United States is $3,831, whereas through MDSave, patients pay on average $1,673 for the same diagnostic test. And a hernia repair typically costs around $9,916, but through MDSave, the cost averages about $4,430.

MDSave is currently operating in 120 markets across 24 states. The fastest growing segment of their business is surgical procedures. These currently account for about one quarter of its patient volume.

Remote Care Also Bundled, as well as Prescription Drugs

A service called Connect2Docs has bundled primary care telemedicine and a prescription drug discount card. For one low monthly fee, members have 24/7 access to physicians by phone, video, or mobile app. With the proprietary prescription savings card, members receive an average of 55% savings on all FDA approved brand name and generic medications.

Healthcare Organizations Also Catering to Self-pay Patients

Hospitals also have discovered that bundled pricing can be a great option for their self-pay patients. Wooster Community Hospital in Wooster, Ohio, originally began providing package pricing for common procedures and services to serve the local Amish community. However, the hospital soon realized that bundled pricing was extremely popular with all of their self-pay patients, as well as a necessary choice, according to the Healthcare Financial Management Association (HFMA).

Bundling Enables Providers to Customize Their Services and Get Paid Faster

Providers benefit through participation in bundled service options as well, as they can customize their offerings to patients, decrease administrative costs and time, and receive reimbursement in a prompt manner. With MDSave, payments are typically delivered to providers within six business days. Conversely, the usual wait time for providers to receive payment from insurance companies for services rendered is three to six months.

Going forward, clinical labs and pathology groups will want to devise a business strategy to addresses how they will get paid when part of a bundled service fee that is paid by patients. It may mean negotiating their share of the bundled payment in competition with the hospitals, physicians, radiology labs, and other providers that are part of that same bundled service.

—JP Schlingman

Related Information:

Paying Patients for Saving Money

Building Bundles for Self-Pay Patients

Creating Package Prices for Self-Pay Patients

Connect2Docs ‘Bundling’ Of Services for Self-Pay Patients Equals Big Savings

The Health Co-Op—Bundling Self-Pay Services for Health Sharing Ministry

How Should We Pay for Health Care?

Bundled Payment: Effects on Health Care Spending and Quality

The Payment Reform Landscape: Bundled Payment

Designing Successful Bundled Payment Initiatives

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