Consumer driven health care spurs innovation in U.S. physician services

Consumer-driven health care (CDHC) is leading to new models for the delivery of medical services. Because they have a financial stake in their own spending, patients have incentives to shop for the best price and to make tradeoffs between convenience and cost, says Devon M. Herrick, a senior fellow with the National Center for Policy Analysis.

For example, many patients often find access to their physician is limited – especially after-hours and on weekends. Some entrepreneurial providers, however, are making it easy for patients who pay cash to reach them by phone or e-mail, says Herrick:

Virginia physician, Alan Dappen, practices medicine almost entirely by telephone and e-mail contact. He charges for consultations based on the time and treatment needed. He bills for 5-minute increments ranging in price from $15 to $22.50. A simple consultation to request medication refills costs from $10 to $15 for up to 5 medications.

TelaDoc Medical Service offers medical consultations by telephone, nationwide and around the clock. Each call costs $35, plus a nominal monthly membership fee – far less than a visit to the doctor's office at $80 to $100, the urgent care clinic at $150, or the emergency room at $300-plus.

With Doctor on Call, available as a benefit through employer health plans or individually as a stand-alone service, subscribers have immediate telephone access to board-certified physicians. According to Doctor on Call, patients can avoid many ER visits by obtaining information over the phone.

As patients manage more of their own health care dollars, they will begin to seek care that is both convenient and low cost. Empowered consumers will compare medical services and shop for care the same way they shop for other goods and services, says Herrick.

Source: Devon M. Herrick, Consumer-Driven Health Care Spurs Innovation in Physician Services, National Center for Policy Analysis, Brief Analysis No. 559, June 15, 2006.

For text: http://www.ncpa.org/pub/ba/ba559/

For more on Health: http://www.ncpa.org/iss/hea/

Health Policy Unit Bulletin/ 20 June 2006