Even with top-of-the-line health insurance, Calvin Magee was looking at paying at least $1,200 out-of-pocket for an MRI on his daughter’s foot. Instead, he went to the website of the company he co-founded and bought an MRI at a local hospital for about $450.
“As soon as I buy it, the facility calls to schedule it,” said Magee, MDsave’s senior vice president. “(I) walk in and get my kid an MRI. I’m happy and I know what I paid.”
In the more typical scenario, a patient gets a procedure and then waits for bills to trickle in from surgeons, anesthesiologists and so on, with no clue about the final tab. Now in its seventh year of business, MDsave has capitalized on solving that problem.
MDsave sells services at 249 hospitals in 31 states, including those owned by big players like Community Health Systems, CommonSpirit Health’s Catholic Health Initiatives and Ascension. Its revenue went from $5 million in 2015 to a projected $50 million in 2019. Last month, it processed more than 14,000 patients, Magee said.
MDsave’s consumer-facing website lets patients search for procedures, select a provider and price, pay online and—here’s the kicker—rest assured it will be their first and last payment for that procedure. MDsave has bundled prices for each service, which the company then unbundles on the back end and pays each party involved.
For providers, who pay a monthly fee to be listed on the site, MDsave offers the guarantee they’ll get paid, saves the time and money spent submitting claims to insurers and appealing denials, and brings in patients who might otherwise skip care. Magee said the site is able to sell services at discounts because providers shave off the cost they would otherwise have spent on collection efforts.
“We don’t have to worry about submitting bills to insurance companies or following up with requests for information,” said Michael Boblitz, vice president of planning and business development for Gwinnett Health System.
In its first two months of using MDsave, Lawrenceville, Ga.-based Gwinnett sold more than 100 procedures—more than triple what it expected to—and exceeded its revenue target by more than 400%, Boblitz said.
Gwinnett would charge a self-pay patient $1,561 for a CT scan of the head without contrast, Boblitz said. On MDsave, that’s $320. A knee MRI without contrast is nearly $1,800 self-pay, not including the radiologist fee. On MDsave, it’s $534 with the radiologist fee.
Almost half the insured patients in Gwinnett’s service area have high-deductible health plans, Boblitz said, adding that they are responding well.
In Nebraska and southwest Iowa, lots of people are either uninsured or covered under high-deductible plans that put them on the hook for the full cost of services, said Dr. Cliff Robertson, CEO of CHI Health, a CHI division that covers the region. CHI Health executives noticed in 2017 and 2018 that those conditions were preventing many from getting care. The division partnered with MDsave late last year, starting with services like labs, physical therapy and imaging. It has since added bariatric surgeries and vaginal deliveries.
Providers also like the exclusivity some are promised—the chance to be the only one offering certain services on the website locally for less than their competition. That’s what CHI Health was promised, although Robertson wouldn’t say for how long. “It’s safe to assume you won’t see any of our competitors on this platform, at least for a while,” he said.
Magee said the company is trying to avoid exclusivity because the platform is intended to be a fair marketplace. That means giving customers options. The site also does not include quality measures. Magee said there isn’t a good rating system out there yet anyway.
Starting next month, MDsave will add the option to have patients’ claims automatically filed with their health insurers if they want the payments applied toward their deductibles. Currently they have to call MDsave and request paperwork to do so.
Representatives with UnitedHealthcare, Aetna, Cigna and Blue Cross and Blue Shield of Georgia did not respond to questions about whether they honor MDsave customers’ requests to have the payments applied to their deductibles.
Asked the same question, Magee said “it’s kind of all over the place,” but the majority of insurers honor those requests. He and providers who use the site said very few patients actually try to do that, as they don’t plan to meet their deductibles anyway.