ehealthcarebusiness.com
11 Aug 2000 

CYBERMEDICINE

HMO Prices for the Underinsured
To avoid claims processing, some doctors are offering discounts as high as 70 percent.
By Steve Heimoff

New companies that are offering cash-only medical services on the Internet are going after consumers who want to take control of their healthcare. Part of the foundation of these medical locator sites is that the Internet’s borderless boundaries can eliminate the HMO middleman. Consumers who are angry at managed care, or unable to obtain it, thus will search for more healthcare options on the Net.

Two of these startups are MedicalDiscounts.com, based in Los Angeles, and Simplecare.com, out of Renton, Wash. Both claim to offer Web surfers discounts on medical services, as does HealthAllies.com.

Gary W. Lawson, owner/president of MedicalDiscounts.com, says customers can save up to 70 percent of the usual cost of surgery, and as much as 30 percent off the cost of a visit to the doctor’s office, simply by choosing a provider from the company’s Web page. The discounts are available because the site’s providers agree to offer cash customers their best-possible prices. So far, says Lawson, 3,000 providers, mainly in Southern California, have signed on. About 1,500 customers a month are using the service. They can choose a doctor by practice specialty and by geographic area.

MedicalDiscounts is not entirely interactive yet. After consumers indicate their need for a doctor, an employee still has to locate the appropriate physician and then e-mail the inquirer back that information. "Eventually, we’ll be entirely automated," Lawson predicts.

At Simplecare.com, consumers already can find a doctor online while patients and doctors both save money. Keri Andrews, operations manager, explains how the company saves patients money. "The patient pays at the time of the visit, and because the provider does not have to do billing, which eliminates coding and paperwork, it reduces the provider’s cost, which then reduces the price to the patient to reflect that." Andrews says Simplecare.com has signed up 500 providers in Washington state and dozens more nationwide, including primary care physicians and specialists.

Though their marketing budgets are limited, both of the new companies say they are in the process of going national. Both also claim to thoroughly check the credentials of all physicians who sign up. Carl Halpern, a healthcare consultant at Alameda, Calif.-based Managed Care Solutions, is optimistic about the future of these cash-only doctor locators. Halpern argues the sites should "have legs," especially among two groups. The first, aging Baby Boomers, probably will turn to locator sites as they grow tired of paying ever-higher insurance premiums. Younger people with few health problems likewise may not want to "subsidize a lot of unhealthy people" by paying monthly premiums to HMOs.

Halpern advises people who decide to forego health insurance and pay for treatment with cash to protect themselves by buying a catastrophic health insurance policy with a high deductible. This advice, however, encourages consumers to ignore preventive care because they will not want to pay for it out of their own pockets. Managed care advocates argue that preventive care helps healthcare costs over the long term.

Both MedicalDiscounts.com and Simplecare.com are making efforts to take advantage of the Internet’s reach. For example, Lawson tells the story of a Chicago man who found the company while surfing the Web. The man needed hernia surgery and traveled from his home to Los Angeles because a physician listed on Lawson’s page was advertising the procedure for a third of the price the man expected to pay in Chicago. It might be a while, however, before many U.S. consumers will be able to find a local physician via these sites. So far, Simplecare.com has signed up only one physician in 17 other states outside of Washington. Consumers seeking physicians in states without participating doctors are being advised to " check again" as "the number of physicians signing up is rapidly increasing..."

Steve Heimoff is an Oakland, Calif.-based journalist who writes frequently on healthcare issues.

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