Did you know that there is now an online marketplace where doctors can bid to do medical procedures for patients ranging from a tummy tuck to a hip replacement? The site is called MedBid. Ralph Weber created it in 2010. He says that it’s like Priceline.com except for medical care. The way it works is that users get multiple bids from doctors, which allows them to typically pay as much as 80% less than the rates for uninsured people and 50% less than insurance-discounted prices for procedures.
How it works
While doctors must include their credentials when they submit a bid, you still need to do your own research to ensure that you’re getting a qualified doctor who can handle your procedure. The way MedBid works is that physicians pay a fee ranging from $50 to $250 a year then submit their medical license information and a profile with their experience, certifications and expertise.
Patients type in the procedure they need and can even include images that would help a doctor determine pricing. Each time you submit a procedure it costs $25 or you can get a yearlong subscription with unlimited submissions for $4.95 a month.
Let the bidding begin
The bidding then begins. The doctors submit the lowest price they’re willing to do the procedure for, the services they will provide for that price and their terms and conditions. Believe it or not, doctors have already submitted nearly 10,000 bids and patients have signed up for something in excess of 2000 procedures thus far. The majority of these have been orthopedic surgeries like knee and hip replacements. However, there have also been submissions for cosmetic surgeries and alternative treatments.
Why would doctors do this? It allows them to eliminate the administrative costs that go along with taking insurance. Instead, they get to deal directly with patients who will pay cash. On the other side of the equation, patients get transparent pricing, which makes it easier for them to determine how much they will owe for their procedure ahead of time and to even compare prices among doctors.
Unfortunately, there are some drawbacks to this new concept. Doctors participate voluntarily so that consumers don’t always have a full range of choices and in certain cases may not be able to choose the most experienced doctor. While MedBid requires the doctors to provide information about their experience and qualifications, there’s always the possibility of risk – that somebody will misrepresent himself or herself. MedBid does ensure that the doctors are licensed, not under probation and in good standing. However, the site does not check with state medical boards for complaints or confirm that the doctors are board certified in their specialties. This gets back to what was written in the first paragraph – which is that you must do your own research. You can do this by looking up doctor reviews and ratings at websites such as HealthGrades or ZokDoc.
A good alternative
Obamacare’s goal is to provide insurance coverage for everybody and to lower the insurance costs of millions of Americans. However, some Americans will still end up with higher premiums and others will pay the required penalties to opt out of coverage. This could make MedBid a cheaper alternative. Prices on the site can also be less than insurance-discounted rates. Plus, you may find procedures on the site that are not typically covered by insurance such as stem cell therapy.
A growing national conversation
If MedBid isn’t anything else it’s at least evidence of an increasing national conversation about medical cost transparency, which is needed and will ultimately help the consumer. However, there needs to be a lot of experimentation before the edges get rounded off sites like MedBid. So if this “really unique” auction interests you, be sure to approach this site and others like it with a healthy amount of caution.
Paying for the procedure
Whether you select a doctor from MedBid or choose an insurance-discounted procedure, the time will come when you will need to pay up. You’ve probably seen one or more medical credit cards like CareCredit or AccessMDCard advertised in your doctors’ offices. It can be tempting to get one of these cards but our advice is simple: Be careful.
The same as standard credit cards
Medical credit cards are essentially the same as ordinary credit cards. When you use one, you’re borrowing money, which you then pay back over some period of time. What makes these cards attractive is that they often have 0% interest for some period of time But this will be true if – and only if – you pay back the money within that specific amount of time, which is usually anywhere from six to 24 months. However, some of these cards do offer extended payment plans for up to 60 months at fixed interest rates.
Read the fine print
Before you sign up for one of these cards, be sure to read the fine print. A 0% interest card can seem like a terrific alternative if you are about to pay $20,000 for a hip replacement or $10,000 for cosmetic surgery. The problem is that many of these cards require you to make a minimum monthly payment and if you’re late with a payment, you may see a dramatic increase in your interest rate.
Avoiding interest charges
You can avoid having to pay any interest on the card if you make your monthly payments on time and pay off your balance within the specified time period. But and here is the big but, if you carry your balance past your promotional period, you could be hit with a high interest rate of 24% or even 30% and these rates could be retroactive back to the date you paid for your procedure.
Check out the alternatives
While a medical credit card could be a good option, don’t rush into signing up for one until you’ve considered your other options. For example, it might make sense to put that procedure on your regular credit card. If you have a card with an interest rate of 14% or below, you could choose to use it, which would eliminate the possibility of your interest rate ever escalating to 25% or 30%. Of course, if you don’t have enough of a credit limit on just one card to cover the cost of your procedure, you would have to use two or more cards, which could become troublesome.
A second option would be to take out a home equity loan or home equity line of credit and use the money to pay for your procedure. You should be able to get a home equity loan at less than 4%. However, a home equity line of credit might be a better option than a home equity loan. You should be able to get one at about the same interest rate as a home equity loan and this type of loan generally has a term of seven years or less. On the other hand, a home equity loan might be for as long as 15 or even 30 years – which could be many years after that hip replacement itself requires replacement.
Finally, you could negotiate directly with your doctor for a better price if you can pay cash for the procedure. As noted above, when you pay cash, it frees up the doctor from having to handle the time-consuming administrative overhead required by the insurance companies. Plus, it means immediate payment instead of the doctor having to wait weeks or even months for reimbursement. Just ask your doctor how much he or she normally charges for your procedure then offer to pay cash in return for, say, a 50% discount. Your doctor may say, “no” but then come back with a counter offer. Or you may find your doctor is not willing to negotiate at all but as the old saying goes, it never hurts to ask.