Hospitals Can Increase Profits with MediBid’s Market
Much of the discussion on increasing healthcare costs focuses on the patient, but hospitals are also feeling the effects. According to Gary Young, the director of the Center for Health Policy and Healthcare Research at Northeastern University, only about 33 percent of U.S. hospital systems are profitable, while another 33 percent aren’t even breaking even. The remaining 34 percent of hospitals are operating in the red.
There are many reasons for the obstacles hospitals face. Every year, U.S. hospitals lose more than $260 billion due to denied insurance claims, according to publicly available industry data. That data also includes denied claims, and in 2016, 37 percent of claims were denied. Reimbursements, when they do come, are often lower than what hospitals spend on patients. The Brigham and Women’s Hospital in Massachusetts, a world-leading research hospital, resorted to offering retirement buyouts to 10 percent of its employees in 2016 for this reason. According to the hospital, the buyouts were necessary due to the state’s tight cap on healthcare spending, which was lowered again in 2016. Poor reimbursement rates have long been a concern with Medicare, and according to the Medicare Payment Advisory Commission, approximately 75 percent of acute-care hospitals lost money treating Medicare patients.
In addition, hospitals need to collect the deductible and coinsurance from the patient. It is difficult to collect $7,000 from a typical US worker with an average family income of $59,000.
Hospitals have many challenges ahead, but better access to the market can solve some of them. Medibid provides this market, making it easier for hospitals to attract additional payments and generate additional profits.
How Medibid Can Help Hospitals
Medibid offers an online bidding platform where providers have access to patients from across the country and around the world. Hospitals can compete for these patients through bidding, using price and quality as selling points. MediBid’s users, termed seekers, make up a diverse patient profile, and may be one of the following:
- Self-pay patients
- Canadians on a medical waiting list
- Members of self-funded employer plans
- Members of a medical cost sharing ministry or group
- Individuals with a high deductible plan or a plan that won’t cover their medical needs
In most cases, MediBid’s seekers are able to provide payment on a prompt basis, so hospitals are compensated for their services sooner. The self-insured health plan usually pays both the plan allowable, and the out of pocket costs of the patient at the time of care. What unifies seekers is their desire to shop for healthcare as a consumer. This provides an opportunity to hospitals that are willing to compete, in the form of incremental business.
MediBid’s seekers use Medibid as an online provider marketplace, and providers can leverage this by being transparent with price and quality. When a seeker submits a request for care, providers have an opportunity to bid on that request, and this bid includes a single bundled price for the treatment, the facility and anesthesia. Seekers review the available bids and select one, but because they know what they will pay and what to expect from a quality standpoint, they can make an informed consumer choice. Frequently, seekers discover that they can save money if they are willing to travel, which means hospitals can acquire patients that would otherwise be impossible to attract. In fact, according to MediBid’s data, 85 percent of seekers are willing to travel to get higher quality care, and better pricing in healthcare.
Without transparent pricing and quality, it’s difficult to convince patients to travel. MediBid removes this obstacle, allowing hospitals to market themselves effectively. It’s common for MediBid’s providers to attract patients from all over the U.S., Canada and abroad, and open up additional revenue as a result. Medibid is simple to use, as well, so hospitals can produce many bids in a short time and access patients at a rapid rate.
Further, many facilities struggle with underutilized capacity or resources. MediBid’s online medical marketplace can benefit these hospitals greatly and reduce waste by using competitive pricing.
Reduce Administrative Burdens with Medibid
Hospitals spend a lot of money on administrative costs, particularly when it comes to billing. According to a February 2018 study published in the Journal of the American Medical Association, or JAMA, 25 percent of the money collected during emergency room billing is swallowed up by administrative costs. Reducing those costs has long been an objective of most hospitals, but the nature of the provider-payer relationship renders it difficult. Hospitals expend administrative efforts determining pricing, recalculating it for a particular patient’s insurance, informing patients about their billing and getting patients to pay.
Under the current system, hospitals charge what is known as the “Chargemaster price.” Insurance companies discount that price arbitrarily, and they market that new price to their clients. However, this forces the hospital to collect thousands of dollars from the patient, and the remaining charges are usually argued over between the hospital and insurance company. This process can drag on for up to six months, and the hospital is lucky if it collects in full more than half the time.
Medibid reduces these administrative burdens by removing all of the complicating factors. Seekers know what price to expect, and know it before they receive care. They are often prepared to pay in total and on a prompt basis, so hospitals can remove most of the administrative and billing costs associated with their treatment. This contains escalating administrative costs and allows hospitals to better forecast incoming revenue. The result is greater profitability.
Around the country, many hospitals are at a crossroads. Medicare reimbursements are being reduced, patients are having trouble keeping up with escalating medical costs and the U.S. medical marketplace is in an uncertain position. Hospitals need alternative means of acquiring paying patients, and Medibid offers that alternative. With a platform that’s easy to manage and accessible to patients around the world, Medibid provides hospitals an avenue to generate additional business and additional profit.