Medical Auction Website Puts Patients in Charge of Prices
MedCity News has profiled Medibid, a business that connects patients to physicians who compete on price, through auctions, to treat them:
Francisco Velazco couldn’t wait any longer. For several years, the 35-year-old Seattle handyman had searched for an orthopedic surgeon who would reconstruct the torn ligament in his knee for a price he could afford.
Out of work because of the pain and unable to scrape together $15,000 — the cheapest option he could find in Seattle — Velazco turned to an unconventional and controversial option: an online medical auction site called Medibid, which largely operates outside the confines of traditional health insurance. The four-year-old online service links patients seeking non-emergency care with doctors and facilities that offer it, much the way Priceline unites travelers and hotels. Vetting doctors is left to prospective patients: Medibid does not verify credentials but requires doctors to submit their medical license number for patients to check.
Velazco paid $25 to post his request for knee surgery. A few days later, he had bids for the outpatient procedure from surgeons in New York, California and Virginia, including details about their expertise. After accepting the lowest bid — $7,500, a fee that covered anesthesia and related costs — he learned that his surgeon would be William T. Grant, a Charlottesville orthopedist.
One major reason costs are lower than in the traditional system is that insurers are cut out, reducing administrative costs significantly. However, the article reports complaints by hospitals, who cannot stand to see fees cut:
Hospital profit margins average about 5.5 percent, according to 2012 statistics released by the American Hospital Association. Richard Gundling, vice president of the Healthcare Financial Management Association…
“Hospitals provide a community benefit and are responsible for cases that can’t go to surgery centers,” he said. “Hospitals are providing things like shock-trauma units and emergency care services that have to be covered 24 hours a day, seven days a week.
Unmentioned is the fact that these community hospitals are non-profit, so accounting profit is not a good measure of economic profit. Hospitals’ economic profit is kept inside hospitals, inflating costs.
Interesting to see that DOCTORS are the ones that are auctioning to work on patients. It seems like it should be the other way around
I like this idea, it gives patients the power to choose and to choose the most cost effective physician.
We should see more of this!
Yes a blind auction for medical care is fantastic.
Until the doctor butchers you…
So this is like a reverse auction? Instead of competing and continuing to raise the price, they compete to lower the price for the patient. This is a genius concept.
This should be widely implemented. This sort of freedom and competition will ensure maximize efficiency in health care procedures.
“However, the article reports complaints by hospitals, who cannot stand to see fees cut”
Yes I am sure they are. Hospitals that keep their prices hidden I’m sure hate to see places bid for patients.
Great post, Ralph Weber of Medibid is sharp guy.
Maybe this will force a recognition that trauma centers and emergency rooms could be funded in large part by taxes, rather than by overcharging for outpatient care.
ER’s are not that different from fire or police stations, and should be funded the same way.
Except that you don’t call the police or fire department unless you really need them. ERs are used by all kinds of patients who are not having emergencies.
This requires a regulatory overhaul.
I just don’t see how this is a sustainable practice. Health is not something that patients are willing to compromise or wait for the right bidder to come along and perform. If a doctor has a practice that is so expensive that not enough people are coming, then the doctor would obviously lower the price, but to do it by individual procedure seems to be cumbersome and unlikely.