Medibid.com is typical of new companies that help consumers identify providers with the best combination of low price and high quality
Should anyone be surprised that high insurance deductibles are motivating patients to shop for the best value on all sorts of healthcare services—including medical laboratory tests? One way consumers can shop for the lowest price is to utilize new web sites that allow providers to bid for the patient’s business!
Potential Business Opportunity for Clinical Labs and Pathology Groups
This new class of websites represents a business opportunity for clinical laboratory organizations and anatomic pathology groups. Essentially, these websites use real-time auctions to help consumers select the provider of their choice for all types of healthcare services, including medical laboratory tests.
One such online marketplace is called Medibid.com. The company’s goal is to make it easy and convenient for consumers to shop for high-quality medical services, at the best possible price. The site’s provider-doctor bidding system is saving patients, employers and insurers thousands of dollars for medical procedures by bringing true transparency and competition to medical pricing.
Clinical laboratory managers and pathologists who complain about unfair price competition from the de facto contracting cartels made up of national health insurers and national lab companies have the opportunity to use these new Internet-based services. They can allow smaller labs to directly compete for the medical lab testing business of consumers who must meet high deductibles or who are uninsured.
Easier Way to Check Prices Charged by Hospitals, Physicians
It has always been difficult for patients to get prices from hospitals, physicians, and laboratories in advance of service. Recently, the U.S. Department of Health and Human Services attempted to shed light on hospital pricing by publishing hospital-specific cost data for the 100 most common inpatient treatments on the Medicare Website.
To use Medibid.com, individuals simply: 1) register on the website; 2) create a profile; and, 3) pay a fee. Once registered, consumers can solicit bids from providers for a specific procedure. These bids are often 80% less than the retail or hospital chargemaster price. They are also often about half of what insurers pay, according to the Medibid Website.
On its website, Medibid provides patients with a provider profile for each bidder. The profile includes information about the hospital or the doctor’s training, education, and experience. The provider profile also has other information, such as how many times per year the doctor or facility performs the procedure for which the patient is bidding.
Medibid allows both providers and patients to register. To solicit bids for all medical needs, patients have the option to pay $25 for a one-time bid or $4.95 monthly for one year. Providers pay $24.90 per month or $250 per year to respond to patients with a bid. For an additional charge, Medibid connects American providers with cash-paying domestic patients and medical tourists.
Efforts to Shed Light on Healthcare Pricing May Soon Bear Fruit
Price transparency is proving effective. In fact, the savings from the Medibid auction service are so significant that some self-insured employers and insurers are willing to pay an employee’s travel expenses when the best bid is from a provider outside of the patients immediate geographic area!
An Associated Press (AP) story related the story of Paul Freeman. He is a community bank executive in Texhoma, Oklahoma, Freeman traveled 600 miles to a hospital in Oklahoma City to have loose cartilage in his knee removed. Because the trip saved his insurer 70% off the cost his hometown hospital charged for the same procedure, the insurer picked up Freeman’s travel expenses. It also saved Freeman the extra $5,000 deductible he would have paid had the procedure been done at the hospital in his hometown of Texhoma.
Consumers Changing the Way They Choose Providers
Shopping for healthcare deals is a major change in how most consumers choose a provider. “We waste an enormous amount of money in this country by overpaying for health care, stated John Goodman, an Economist and CEO of the National Center for Policy Analysis. “The only way to get rid of waste is to have people compete in the real marketplace.” Goodman was quoted in the Associated Press article.
Another company that offers patients access to provider prices is Castlight Health. Its service is designed to be offered through employers and health insurers. The application helps patients shop for healthcare based on quality and price. “You can be a highly educated consumer now and still not understand what bill is going to hit you,” said Giovanni Colella, M.D., Cofounder and CEO of Castlight Health.
Walmart, the nation’s largest private employer, insures 1.1 million employees and their dependents. The retailer has its own approach toward provider price transparency. Walmart runs a voluntary program that sends employees to one of six nationally recognized hospital systems around the country for certain procedures. These procedures include heart, spine and transplant surgeries and are offered at no cost to the patient.
Walmart spokesman Randy Hargrove told the AP reporter that this program saves patients between $5,000 and $10,000 in out-of-pocket expenses, depending on their plan.
Walmart also recently began offering no-cost knee and hip replacement surgeries for employees willing to travel to one of four U.S. hospital systems. This program is offered through a national Employers Centers of Excellence Network, which includes other large companies such as the Lowe’s chain, noted the AP/Daily Tribune report.
Medical Laboratories Can Expect Better Informed Consumers
For these and other reasons, medical laboratories can expect consumers to be more price conscious when they select a lab. This is especially true for patients with high-deductible health plans. The difference in the prices for clinical laboratory tests between a hospital laboratory and an independent commercial lab company can be shocking to patients. Pamela Campbell learned the hard way, noted a story on CBS San Francisco.
Her six-year-old son needed a series of lab tests. His pediatrician gave Campbell a choice between University of California, San Francisco (UCSF) Children’s Hospital lab or an independent lab a half-mile away. She chose the hospital lab and received a bill for $1,026 after her insurance paid its share of the $1,800 in charges. Campbell later found out that had the tests been done at the independent lab, her out-of-pocket cost would have been $82.
—By Patricia Kirk