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.
A few weeks later, after several online discussions with Grant, Velazco arrived in Charlottesville, where he had rented a $50-a-night room and would spend two weeks recuperating. On Dec. 4, 2013, he underwent knee surgery, performed in an outpatient surgery center that Grant co-owns.
“I’m back working four days per week and climbing ladders,” Velazco said recently. “I’m doing great.”
To Medibid founder Ralph Weber, a benefits consultant who said he left his native Canada for the United States in 2005 to escape “socialized health care,” using the Internet to arrange non-emergency medical care is long overdue. Americans, he says, are increasingly going online to book travel and even find a mate. Medibid enables them to strip away the opacity that surrounds health-care pricing, Weber maintains, where charges vary wildly even in the same market and can be nearly impossible for consumers to obtain.
“We introduce transparency and also competition,” said Weber, whose company is based in Murfreesboro, Tenn. “We are a disruptive innovation, a free-market alternative to Obamacare.”
Weber said that about 120,000 consumers — Medibid calls them “seekers” — have used the service. Many are uninsured, holders of high-deductible plans or enrollees in faith-based plans, which have grown as a conservative alternative to the Affordable Care Act. Seekers are charged $25 for each request or about $60 for an unlimited number of requests per year.
Roughly 6,000 doctors or surgery centers and a handful of hospitals, most seeking patients from abroad, have registered as “bidders”; physicians pay a fee ranging from $50 to bid on one request to $250 to bid on many. Once a bid is accepted, Medibid bows out, and patients work out arrangements with the doctor. Many bids are a package deal, covering the facility fee, the surgeon’s charge and anesthesia services. Patients pay the bidder in full, upfront and in cash or by credit card.
But critics, who agree hospitals’ prices are too often inflated, arbitrary and opaque, express concerns about Medibid. They say the service provides little in the way of quality indicators for prospective patients, something hospitals convey by granting a doctor privileges and insurers do by accepting doctors on a plan’s roster. Surgery or procedures such as colonoscopies are typically performed in physician-owned outpatient centers, which are more lightly regulated than hospitals and have fewer safeguards for patients.
Unlike hospitals, which are required to track infections, outpatient surgery centers are usually exempt from such reporting requirements. And complications are rarely covered under the terms of Medibid.
Medibid “is a phenomenon that is in part being spawned by the absurd, nonsensical and inexplicably unfathomable pricing of American health care,” said Arthur L. Caplan, head of the division of bioethics at NYU Langone Medical Center in New York. “Cheap sounds good, but in these auctions you’re not getting any information: Was the guy at the bottom of his class in medical school?”
“In the current world you buy the name — the institutional reputation of a doctor or hospital. Insurance companies or hospitals drop people who have high complication rates or costs due to errors, “ he added. “Medical care is not like buying a watch on the street or a hotel room online. The stakes are much, much higher.”
Marty Makary, an associate professor of surgery at Johns Hopkins Hospital and the author of “Unaccountable,” a 2012 book about hospital quality, agrees. “I have concerns about the lack of good metrics of quality,” he said. “How do you know what you’re getting?”
Weber says that consumers are competent to make such decisions without relying on a provider directory or the imprimatur of a hospital. “Is there anything that says the Internet is any worse than a Blue Cross directory?” he asked. “Once they choose a physician, we will send them the license number, and there are a bunch of third-party sites” that patients can use to check out a doctor. If a patient is dissatisfied with a doctor after accepting a bid but before surgery, Medibid will repost the query free of charge.
Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a nonprofit, nonpartisan health policy research and communication organization not affiliated with Kaiser Permanente.