Healthcare pricing has historically been opaque, to put it gently. For the consumer, “infuriating” might be a better description.
For about as long as the healthcare industry has existed, consumers have had an extremely difficult time coaxing straight answers on how much their care will cost. “Because of the way insurance companies set up their billing, many patients agree to procedures without being fully aware of the final cost of the services rendered,” said Brandon Ambrosino at the Hub, a Johns Hopkins project. That’s an uncomfortable place to be – yet for decades, there’s simply been no alternative.
That’s starting to change.
MediBid allows patients to buy medical care on auction
Our spotlight for today, MediBid, is a service that connects patients who need non-emergency care to the doctors and facilities that offer it. It’s an online auction. Think of it as the Priceline of medical services.
“After completing a Request For Pricing, doctors bid on patients’ non-emergent care,” said David Saltzman at LifeHealthPro. “Patients receive that data along with quality and other metrics to help them make informed decisions that result in better outcomes and savings for the plan.”
In a world where consumers routinely go online to price-shop anything and everything they plan to buy, the business model makes sense. Competition and transparency are long overdue in healthcare. If you can get it for hotels and shoes, why not medical services too?
Peace of mind is only one benefit. Reasonable prices are another. According to Chris Hobbs, CFO of MediBid, when patients start to behave like consumers, prices come down. “They’re used to asking doctors, ‘Are you in network?’ but not about how much a procedure costs,” he said.
These questions – as well as the consumer’s ability to ask them in the first place – are important, because the healthcare (i.e. coverage) that we purchase dictates how much medical care (i.e. services) we can receive. Yet we don’t have any say in how that medical care is purchased. According to Benjamin Rush Institute, even within PPO networks, there are huge price differences in medical services, as well as several factors that drive prices up artificially.
What does healthcare need? More transparency
MediBid is only one possible answer to a complex problem. That problem, in the words of Arthur Caplan at NYU Langone Medical Center in New York, is “the absurd, nonsensical and inexplicably unfathomable pricing of American health care.”
It’s not a perfect answer: customers must be prepared to do their homework, because, although MediBid allows only licensed care providers to participate, it doesn’t check for complaints, board certification in specialized areas, or misrepresentations. It also provides no guarantee about the quality of care.
That said, it does hone in the need for greater transparency. In so doing, it helps to address the ubiquitous problem of overpayment that plagues the industry, which we wrote about here.
Bottom line, healthcare needs real cost transparency in order to empower consumers to work out the best value for the services they need. Real cost savings shouldn’t be an anomaly in healthcare. It should be a reasonable expectation.
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