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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Move Over, WebMD! Steve Case and Want to Compete

Remember Steve Case, the founder of AOL? He’s back and wants to again redefine the Internet by launching a new healthcare website— Case is wagering that consumers will willing pay almost $100 per year to subscribe to premium services such as digital medical record (DMR) storage, help with insurance claims, and telephone services designed to provide health coaching and doctor matching.

Case’s main competitor, WebMDU seems to be reacting to the new competition. Recently it revamped its site and converted many of its fee-based services into free services for its visitors. WebMD has created a new service on its Web site: storage and maintenance of health records, which it will offer to consumers for free. WebMD is profitable primarily because of its advertising revenue—tapping into the huge advertising budget of pharmaceutical companies—rather than making money from subscription fees paid by consumers using its Web site and services.

Case predicts will be profitable because of the growing push towards consumer-driven health plans (CDHPs). Dark Daily has noted before that people are becoming increasingly interested in their own healthcare, researching their conditions and physicians online and elsewhere. will entice people to try paid services by offering a free trial. Users who sign up for in the site’s first 90 days will get free telephone consulting and free digital record services for one year. That promotion is going on right now, so sign up for a free account and try it out if you’re intrigued!

It is questionable whether can become profitable in an age where people can easily access many Web-based services free-of-charge. The company may have to adjust its model in the long-term and rely more on advertising, as its competitors already do.

Clinical laboratories and pathology group practices are likely to benefit from all the promotion and consumer education that will accompany the launch of Steve Case will be spending liberally to attract consumer attention to his new e-business. He needs for consumers to find it easy to access healthcare information and services using the Internet. As more consumers grow comfortable going to the Web for these purposes, they will begin to look around for the Web sites of their physician and their laboratory. That is why enterprising laboratories may want to enhance their Web sites to provide highly personalized consumer information.
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Consumers Not Funding Their HSA Accounts – A Financing Opportunity

In the age where we can finance everything from houses to cars to couches, it’s only logical that high-dollar items like health care services are not far behind. Interesting data has been published which indicates that growing numbers of consumers enrolled in high-deductible consumer-directed health plans (CDHPs) that include Health Savings Accounts (HSAs) may soon use financing to pay hospitals, physicians, and laboratories for their healthcare.

The San Francisco Business Times recently reported that, as of January, about 3.2 million Americans were enrolled in high-deductible plans. However, just 820,000 of these consumers (about 26%), had opened and funded their HSAs. Source of this information was “Inside Consumer-Directed Care,” a newsletter published by Atlantic Information Services.
This situation will have consequences for hospitals, physicians, and laboratories. It means that a significant portion of consumers currently enrolled in health plans with HSAs will not have sufficient funds in their health savings account to pay for health services. This is why some insurance companies are chartering their own banks. For example, UnitedHealth Group founded Exante, a bank organized specifically to handle HSA funds and provided other related financial services (see The Dark Report, December 26, 2005).

Why aren’t more consumers funding their HSAs? Experts tell Dark Daily that this is because many consumers don’t yet fully understand how their high-deductible health insurance plan works in tandem with their HSA. These experts expect three things to happen over time.

First, employers are likely to spend more resources on communication and education to help their employees better understand these high-deductible health plans. Second, insurance companies will be offering financing arrangements that allow the consumer to use his or her HSA to borrow the money needed to pay the medical bill. That debt will be paid off by monthly payroll deductions. Third, more companies are likely to provide employer-matched funding for their employee’s HSAs. This employer-match portion will be similar to the arrangements frequently used with 401-K plans and similar retirement programs.

In the short term, laboratories and pathology groups are not likely to see much impact from under-funded HSAs. Over time, it is believed that consumers will become more knowledgeable about their high-deductible health plans work. Consumers will also avail themselves of employer-match funding programs for their HSAs and will utilize credit health plan-sponsored credit plans to pay their medical bills.

Dark Daily observes that the adoption of HSAs in the United States is likely to continue, despite any implementation issues. That’s because HSAs have been used successfully for decades in countries such as Singapore and South Africa. Laboratories and pathology groups are advised to review their current collection processes to maximize success in getting payments directly from CDHP-insured patients.