Can Priceline-style tactics transform medical practice?

Yes, I realize the above is a pretty extravagant headline — the “real” Priceline isn’t involved here — but follow me, and tell me  if you think the question is on point.

Yesterday, I spoke to Alex Fair of FairCareMd.com, a New York-based company which lets patients and doctors directly negotiate a “fair deal” on services between themselves.  Physicians give (presumably big) discounts on services in exchange for getting cash on the barrelhead once the service is delivered.  The site is in beta but still worth a look;  seems the key pieces are in place.

Fair, a former scientist who’s been a serial entrepreneur for many years, once designed software helping doctors successfully beat claims denials, so he definitely knows the territory. And he’s obviously right that if they get cash up right away, doctors can easily beat the “retail” prices they’re sometimes forced to charge to cover health plan collection costs.

Fair’s (reasonable) assumption is that FairCareMD will be a lifesaver for patients with high deductibles or no insurance at all, as well as giving them a way to get procedures the insurance industry won’t cover.  Not only will patients have access to deeply-discounted fees, if the patient can’t find the deal he or she wants, they can push for a better price at a number they can live with. That is indeed along the lines of Priceline.com’s “name your own deal.” (I’m here to tell you that *that* mechanism works very well indeed.)

On the surface, the concept makes sense. And there’s precedent for it.  For example, a thriving market in cash-for-surgical-services, much along these lines, already exists in the bariatric surgery industry, as many health plans refuse to cover such procedures. Ah, the power of capitalism to work around other capitalists!

In his first month since launch Fair reports over 5,000 searches for care on his site, though only about 1 in 200 visitors requested a deal from a provider.  On average these deals have saved 47 percent off “list prices” so far. Fair’s surprised that so few consumers are making requests.  On the other hand, it’s only a few weeks after launch, and other sites have millions of such requests, so he’s in wait and see mode.

My guess is that a) people don’t see the value of shopping for prices just yet — so thoroughly has the health insurance industry hornswoggled them and that b) they’re likely to see more valuable in accessing such services if they pay a subscription fee. Just a human nature thing.

So hey, folks, what do you think? What will it take for consumers to feel comfortable paying doctors directly again?  Fair isn’t the only company banking on this notion  — in fact, there are several, including some with a national presence  — but my instincts suggest they haven’t won consumers over completely yet either.

An even bigger question:  Do you see the broad mass of consumers developing those sorts of relationships with hospitals anytime soon?  Now *that* would be a neat trick.

NOTE:   If you’re in the NYC region, or plan to be next week, you can meet Fair and other local social media/health entrepreneurs  at a Manahattan-based Health 2.0 meetup (details at  http://www.health20nyc.com/calendar/13913750/?eventId=13913750&action=detail#initialized).  Looks like it’s going to be a very nice group. I’ll be moderating a panel, so if you’re there please stop by and say hello!

About the author

Anne Zieger

Anne Zieger

Anne Zieger is a healthcare journalist who has written about the industry for 30 years. Her work has appeared in all of the leading healthcare industry publications, and she's served as editor in chief of several healthcare B2B sites.

4 Comments

  • Thanks Katherine,
    It was a pleasure getting to know you – you are a real pro!

    As I visited a calm, wonderful direct pay office today where patients were warmly welcomed and remembered and then a mill where no one knew anyone and one of the 16 workers for 3 doctors had been fired that day and no one even knew her name, let alone those of the patients, it made me wonder about cost efficiency. With only one staff member for the three doctors in the first office, the cost could have been 1/8th of the cost per doctor in the other office. Why? No paperwork, no claims, no billing, no pre-approval calls… just more caring care. As my Friend Dr. L. Gordon Moore says, (www.hellohealth.com) direct pay puts the humanity back into care.

    Oddly enough, the direct pay office has lower rates on FairCareMD than the mill. Why? Because the mill is running as fast as it can to stay ahead of overhead.

    You think patients are horswaggled, check out the doctors!

  • Sad that quality and a good relationship with your doctor are harder to come by when health plans are allegedly footing the bill, eh?

  • Transparency in pricing and a focus on the consumer or patient experience are terribly lacking in the current state of medicine. How can a trillion dollar service sector industry be set up to give terrible service at exorbitant prices? Somehow that is where we find ourselves. If the experience of Care Practice is any indicator of what offering choice in the market place with a superior product at affordable price points then the results can be dramatic. In our two year experiment we have served over 5,000 patients at total costs that would seem unimaginable to the current industry standards. Hopefully more doctors will follow the lead set by Dr. Moore and others in the Ideal Medical Practice movement to innovate and dream of creating healthy medical practices that reinvigorate the relationship between patients and doctors.

  • Dr. Blackledge:

    Thanks for joining the discussion! Without a doubt, the current state of affairs is absurd, despite the well-intentioned day-to-day efforts of countless providers to fight the system and provide good care at fair prices. And I also agree that Dr. Moore’s work offers a beacon of hope. (The real trick will be to find a similar model for hospitals!)

    I’d love to learn more about Care Practice, by the way. If you’d like to discuss your methods and results in greater detail, feel free to contact me.

    Best,

    Katherine Rourke

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