As owner of a management service organization for physicians, Betty Heiman has witnessed first hand the gradual disintegration of consumer choice in health care.
As the Obama administration’s and House proposals move to the Senate, Ms. Heiman is typical of the entrepreneurs across the country who understand choice and its behavior in the marketplace and are moving to create “educated consumers” and independent options as an anodyne to the government-run health care.
In 2008, with a little entrepreneurial moxie and a lot of common sense, she created Transparent Health Network (THN), a consumer option-driven, non-insurance health care access program that really works.
Ms. Heiman created Transparent Health Network in response to the growing number of individuals who have been neglected by current plans: in particular, the working uninsured and under-insured – individuals who earn too much to qualify for government assistance programs, but not enough to comfortably afford insurance.
“These are largely part-time workers, employees of small businesses, up and coming professionals and sole proprietors, or others who either don’t have access to employer-sponsored plans, or feel they can’t afford the monthly premiums. They have some money, and in many cases they are young, healthy individuals. We call them the “S-suite,” for “self-sufficient, uninsured, independent thinkers and employed,” Ms. Heiman said, describing the basis for founding THN.
In fact, according to 2009 US census data, there are more than 500,000 households in the New York metropolitan area that have annual incomes of $60,000 or more, but are uninsured.
The goal of THN is to provide an affordable, value-driven alternative that ensures choice and responsibility through a system that empowers these individuals to have control over both their health care decisions and their health care dollars. “It doesn’t take an Adam Smith or Sigmund Freud to understand the satisfaction and profound sense of enfranchisement that comes with the ability to make educated choices,” Ms. Heiman said.
Like any smart consumer, Ms. Heiman wants to know the price of products and services before buying them so she can compare prices from different stores or brands. Even a new car has a list price that serves as a starting point for negotiation with a dealer, and a plumber offers an estimate before fixing broken pipes. It is unlikely that many people would make these purchases without knowing the prices—especially if they were not going to be revealed until the credit card bill arrived several weeks later.
It makes little sense that health care services are arguably the most important purchase a consumer can make; yet, despite the current nationwide conversation about the need for improved consumerism in health care, most people “purchase” health care services blindly. Sometimes, particularly with hospital services, they do not even see the bills until several months after they have received care.
Medicare set the groundwork for the current health care pricing structure by developing its reimbursement schedule based on the median “usual, customary and reasonable (UCR)” fees providers in a given geographic region were charging for specific services. Soon after, the insurance companies and managed care organizations, advocating for large numbers of patients, also negotiated significant discounts. Health care pricing is now so convoluted that fee comparisons are virtually impossible. The list of codes used for calculating the costs of specific services is massive. And, at any given time, a provider might accept four vastly different fees from four patients who are sitting together in his office waiting to receive the exact same care for the exact same problem, depending on what he’s negotiated with their insurance companies or if they are Medicare participants. And, providers are prevented by law from offering dual fee schedules, with one for patients paying cash and another for insurance companies. Ironically, the patient who is uninsured is left out of the negotiating process. As a result, those who are most vulnerable are asked to pay the highest (non-negotiated) rates —rates, in fact, that can be as much as 300% more than those paid by Medicare and many insurance companies.
Transparent Health Network becomes the solution for the uninsured. With THN, members pay a low monthly membership fee—$39 for an individual, $54 for a household—to obtain access to a growing network of providers who have contracted to care for THN members at negotiated rates. Acting as an advocate for the working uninsured, THN has used the power of numbers to contract with providers a fee structure based on 100% of the 2009 Medicare fee schedule for each locality. For transparency, the fees are posted on the Company’s website. Also available on the website are fee estimates for many of the most common CPT codes listed by specialty, so patients can calculate their approximate expenses before seeing a provider.
Because Transparent Health Network is not insurance, in return for the reduced fees, members are obligated to pay providers on the spot when they receive care (there are no collections or complex claims or appeals processes for the medical office). In this way, providers keep their administrative costs down and retain a greater margin for their practices, and THN members have access to a provider network at a reasonable cost, with the ability to estimate in advance what the services they “buy” will cost. In addition, Transparent Health Network is compatible with high-deductible, or catastrophic, insurance plans.
According to Andy Rieger, CFO of Transparent Health Network, “medical fees are a well-kept secret. If consumers don’t know the ‘going rate’ for a particular service, they can’t possibly evaluate whether or not they are getting good value for their health care dollar. They also have no basis for budgeting for anticipated costs.
With Transparent Health Network, we’ve developed a health care access plan that, by offering completely transparent pricing, empowers consumers to make educated decisions about the value of their care. I believe that transparency is the missing link to achieving true consumerism in health care.”
Many people who are part of the ‘Ssuite’ either work for small business that cannot afford to offer health benefits to their employees or are self-employed. In many cases, they’ve chosen to forgo health insurance to save money for other things, including basic necessities. In doing so, they take the risk that they won’t have a catastrophic event and will be able to selfpay for any care they need. Transparent Health Network offers a way for these people to join a group that has the negotiating clout to obtain fair, more affordable prices.
Even if health insurance is unaffordable, Ms. Heiman believes health care can- -and should--be affordable, and that no one should be denied care because of a previously existing condition, age, or for any other reason. That’s why, while THN is designed with the S-suite in mind, it is not limited to that group.
The beauty of Transparent Health Network is that it offers access to a comprehensive network of providers in a setting that allows them to practice medicine the old fashioned way: by looking out for the patients’ best interest without the burden of profit-focused insurance companies looking over their shoulders.
“Health care is the only service business I know of where the fees paid to the provider are negotiated by a third party that dictates what providers can and cannot be paid for – and how much they can be paid. It is appalling that when they or a family member are sick – already a time of increased vulnerability and fear -- a consumer should have little or no idea how much his health care costs will be until after receiving care. Transparent Health Network changes all that,” Ms. Heiman said.
Currently, Transparent Health Network has a rapidly growing network of more than 1,200 provider locations, including primary care providers, specialists and ancillary care providers across the NY metropolitan area, including the five boroughs of Manhattan, Westchester, Nassau and Suffolk and Essex County, NJ, with plans to expand to additional states in the near future. The plan also includes an exclusive pharmacy partnership with Rite Aid, including access to more than 500 common prescriptions for just $6.99, as well as discounts on front-ofstore merchandise.
“Rite Aid brings significant value to our members, offering a broad formulary of over 500 prescriptions at an attractive price point. Beyond the formulary, branded discounts also approximate levels realized by many of the nation’s largest employers, delivered through 400 stores in the metro New York area alone,” said Drew Mason, Vice President of Business Development for Transparent Health Network.
Transparent Health Network members have access to a round-the-clock nurse hotline and a hospital advocate who will serve as a liaison between the hospital administration and the member, to help navigate the system and ensure that the member gets access to applicable rates. This is particularly important because many people are unaware that most, if not all, hospitals even offer “uninsured programs,” and if they fail to ask for them, there is a good chance such programs will not be proffered by admissions clerks. “People who can afford the premiums should have insurance,” Ms. Heiman says. “But for those who are either working or on COBRA, but cannot comfortably afford or don’t have access to insurance, Transparent Health Network is the choice. Our model and others developed by entrepreneurs whose motivation is long term profit from intelligent program and product development reveals the best kind of reform in the health care sphere: organic, choice-friendly options exercisable by the fully franchised, knowledgeable consumer,” Ms. Heiman concluded.
