MyChoiceMD founders target savings

FORT COLLINS — For health-care providers and patients, the benefits of MyChoiceMD are straightforward: Cash-pay patients and those with high-deductible health plans can easily shop several providers online for the lowest prices on non-emergency care. Providers, meanwhile, cut out much of their back-end claims processing and get paid faster than if they were routing claims through insurance companies.

But the founders of Fort Collins-based MyChoiceMD, which was slated for an official launch in late June or early July, assert that there’s a third major group standing to benefit from their service – insurers. That’s, however, where they’ve got some educating to do.

MyChoiceMD cofounder Eric Hoyer said that’s because the company’s aim isn’t to improve or streamline current health-care payment processes but rather to create a whole new one in an industry that isn’t exactly rapid in its response to change.

SPONSORED CONTENT

Federal District Court Rules Corporate Transparency Act Unconstitutional . . . But Most Small Businesses Must Still Comply

Lyons Gaddis Real Estate and Business Attorney Cameron Grant shares important details of the Corporate Transparency Act (CTA).

“I think that it’s a real savings opportunity for insurance companies,” Hoyer said.

High deductibles in mind

Founded early last year by Hoyer, his brother Gustav and Tim Morton, MyChoiceMD is an online marketplace where providers can connect with patients directly with set prices for various services. Providers list their services online with a cash-pay price that is up to 50 percent lower than they would normally charge. Patients, via the web or mobile app, search by price, service, location and appointment schedule. When patients choose a provider, they pay through MyChoiceMD, and providers are paid within a few days of the appointment. MyChoiceMD collects a flat $5 fee from both the patient and provider in each transaction.

The service, at least initially, is targeting only outpatient, non-emergency, non-surgical care. It’s specifically going after those without insurance or those with high-deductible health plans (HDHPs), not patients with PPO or managed-health plans. MyChoiceMD is geared toward the segment of the population that is largely healthy and won’t meet their deductibles in a given year.

The founders figure that target cohort of patients numbers about 750,000 in the Denver area alone. That’s where they’ll launch initially, along with northern Colorado and southern Wyoming. A pilot version of the service in Cheyenne wrapped up recently and engaged multiple doctors’ offices with about 15 providers listing services. The founders say they have from 50 to 70 providers in Colorado onboard for the launch, with that figure expected to double soon. The company, which has two employees in addition to the founders, is raising a Series A round of funding of from $2 million to $3 million to fund the initial push.

Overcoming unfamiliarity

Much of the initial push is likely to include efforts spent educating insurers of the benefits of such a platform. Most representatives for large insurance companies and other industry officials were reluctant to comment for this story, in part because of their unfamiliarity with the platform.

The value proposition MyChoiceMD is pitching to insurers, though, is that the service will decrease insurance companies’ exposure to paying claims. Essentially, if patients with HDHPs are paying lower prices for services with the platform, then those patients are going to hit their deductibles more slowly for the same bundle of services.

Clare Krusing – press secretary for America’s Health Insurance Plans, a national association representing the health-insurance industry – said it’s difficult to measure how much impact MyChoiceMD would have in this regard.

“I think you would have to look at such a broad population to assess that,” Krusing said.

The other issue Krusing sees with MyChoiceMD comes on the patient side. If they buy services through MyChoiceMD, patients must submit claims to their insurance companies themselves to get those costs to count toward their deductibles. However, if a patient chooses a provider on MyChoiceMD that isn’t considered in-network by his insurance company, that cost might not count toward the deductible or might be applied at a reduced rate.

“It’s important that people look at what their benefit structure includes,” Krusing said.

The MyChoiceMD founders believe that much of that issue will be resolved as rules regarding HDHPs and out-of-network providers are relaxed over time.

“We don’t anticipate just being a rogue,” Eric Hoyer said. “This is going to be a really perfect marriage with those high-deductible plans.”

Added homework for patients

Dave Windley, managing director and health-care analyst at Jefferies, said the premise of saving insurance companies money makes sense, but added that the discounts for patients must be steep enough to make it worth their time to file claims toward their deductibles themselves rather than having their providers do it for them. The Hoyers counter that, depending on their insurance companies’ rules on timing of claims, patients who don’t expect to hit their deductibles wouldn’t have to file the claims at all until they had a medical event that was going to push them over the line.

“If I have to file the paperwork, then that’s a burden on me,” Windley said.

Windley questioned the size of discounts doctors will be able to offer, noting that the savings doctors might realize on back-end claims processing for MyChoiceMD patients will be tough to measure. Gustav Hoyer admitted that the MyChoiceMD patient cohort needs to grow for doctors to realize such savings. But Gavin Kaszynski, director of finance for Associates in Family Medicine in Fort Collins, said the savings aren’t the main driver for his company to list services on MyChoiceMD initially.

“For us, it comes down to one thing mostly: That’s patient access,” Kaszynski said. “This is a way to make things much more convenient for patients, and not just in terms of directing their own health-care experience but also cost. It never occurred to anyone to ask how will this affect our profitability.”

Associates in Family Medicine, which still is working out its pricing structure, will pilot MyChoiceMD at one of its nine locations but hopes to quickly expand it to all of them. The company will offer high-volume, low-acuity services on the platform such as minor joint pain, ear infections, abdominal discomfort, minor chest pain, upper respiratory infections, and cold and flu. For a normal sore-throat or ear-infection visit, Kaszynski anticipates that the office will be able to offer such appointments for about $75, down from the industry average collection of $100. But he also noted that MyChoiceMD gives providers the flexibility to offer even steeper discounts on certain days where they have a lot of appointment openings.

A new approach to pricing

Windley said no other service he knows of is taking the same angle at the market as is MyChoiceMD. While insurance companies have their own online pricing tools, he said they’re used very little, and Gustav Hoyer countered that those are simply steering patients toward insurance companies’ preferred providers anyway. Independent websites such as Healthcare Bluebook provide patients with average prices paid for various services in their areas but don’t provide the same type of direct transaction platform as MyChoiceMD. Hoyer added that some surgical centers in Oklahoma are using similar platforms, but no one is targeting the same cohort of patients MyChoiceMD is now.

Of course, all of that newness is one of the major hurdles for MyChoiceMD.

Kaszynski said he understands that insurers will be cautious at first about embracing MyChoiceMD, but said “they will absolutely see the light.”

Eric Hoyer said he also believes insurers will come around, but admitted that it could be a slow process given the way current payment mechanisms are entrenched in the industry.

“We’re crafting it in a way that the benefits will be obvious to them, and they’ll accommodate those,” he said.