What Will Patients Pay For Out of Pocket?

This is a question I’ve discussed a lot lately, and I’m not talking about cosmetic services. It’s one that fascinates me because of the implications for both providers and patients. Cost is a very big and hot button issue, but hopefully the question I’m looking to answer can be broken down to make a discussion meaningful, and it’s not really about cost the way most are discussing it.

Patients in healthcare, as many have written about, are largely insulated from the cost of the services they get. It’s not surprising that patients would not know costs given many providers don’t have a clue what services or visits or tests cost. The costs are variable based on payer or geography or a number of other factors, making it hard to keep track. But even if it’s not absolute or exact costs, it would be nice to know relative costs, imaging being the obvious example (MRI vs CT vs X-ray). Lack of transparency is a problem lots of people are trying to fix.

Providers, at least the ones I know, aren’t used to charging patients or collecting money directly from them. Bills are sent or collections are done by somebody other than the provider. There are some unique practice models where this isn’t the case, but by and large, the days of a checkup being paid for in eggs or milk are gone.

I’ve talked to five youngish docs recently who all told me they would feel uncomfortable charging patients for services such as secure messaging. Even though they aren’t being paid for fielding phone calls, their patients have come to expect it. Maybe my perspective is based on too much exposure to big, academic medicine.

My question, what services would patients be willing to pay for out of pocket? Would providers be willing to offer and charge for them? I don’t want to bring in some massive disruption here by talking about payers, just what services — driven mainly by convenience — are patients willing to pay for out of pocket? And are docs willing to market those to their patients?

HelloHealth is probably the best example since its model allows providers to charge patients $3 per month for PHR access, online scheduling, and secure Q&A with staff. More recent examples that piqued and seemed to indicate a trend were Me-Visit and DoctorBase, both of which enable physicians to offer virtual services, charging patients out of pocket in the process. The premise of these offerings (HelloHealth and DoctorBase do more than just the convenient, out-of-pocket services) is that convenience is worth something to patients and they are willing to pay for it. Do you think that’s true? I do. But first we need to figure out what patients actually want.

First, some recent news about what patients don’t want — simple portals. There was a pretty good article I read last week on the failings of the Mayo Clinic in engaging patients with its patient portal. It’s very sad but also telling that Mayo put so much into this and is still struggling to engage 5 percent of portal users on a regular basis. It’s good learning for the industry. A simple portal with access to records — and likely some static associated education based on those records — is not something patients use, even if it is free.

I’m not knocking giving patients access to records because I think this is extremely important, but you need to add context and connectivity to those records to make them really valuable. As the article above, there are other good example success stories of patient portals.

Enough about portals. I think what people really want is convenient access to providers or services. It’s really all about convenience and this is what people will pay for, at least I think they will. Convenience is what is pushing Walgreens further and further into healthcare delivery. Convenient, affordable care is not always easy. Putting in a retail pharmacy makes sense for people. Enabling access via technology also makes sense.

What specific services do I think people will pay for out of pocket from their PCPs? First, I think it’s asynchronous virtual visits for non-emergent acute care and follow-up. If providers can offer these services for close to or slightly higher than the cost of deductible, I think patients will pay for it, or at least a decent number of them will.

Similarly, I think patients will pay for synchronous virtual visits (telemed) as well. These can be kept short, less than five minutes, and paid for out of pocket predominately now.

Another service is simply the ability to ask your doctor a question. This is different from an asynchronous virtual visit from above in that it is unstructured and not meant to be used for acute problems (though I’m sure some patients would.) Examples I can think of are "Can I drink alcohol while on this medication?" or "is it safe for me to eat sushi while pregnant?" I have no clue what you’d charge for this since most people could use Google to find the answer, but I do think some people would pay for this because the answer is from their doc.

What about medication refills? I’ve seen services that charge $1-3 for a patient to request a medication refill. This seems wrong to me, but I can’t really put my finger on why. If a patient called in for this, It would be done without reimbursement, but turning a healthcare service into something that could be resold at Dollar Tree seems off somehow. Maybe that’s just my strange perception and isn’t real at all. This post was supposed to be about services I thought people would pay for out of pocket, and honestly, I’d pay $3 if it meant I didn’t have to call or wait on hold or anything else.

Requesting medical records or vaccination records? I have kids and I’d pay for med records or for vaccinations if it was easy to do. I know our pediatrician so I know he’d never charge for that but, if he has a change of heart and makes it simple, I’d happily pay for it.

What about scheduling? Scheduling appointments is different. It’s not transactional. I wouldn’t pay to do it, but I might pay for services that included it, along with some other services like med refills or immunization records.

Obviously not everybody would pay for these services, just like everybody doesn’t pay to fly first class or to join concierge practices. I do think there is a market for it, and it is largely offering convenience to patients using technology. It’s also offering potential additional revenue to providers, especially to PCPs, a group that could use it.

What do you think? I’ve asked more questions than I’ve answered, but this is an area that really interests me. It has potential benefits for both providers and patients, as well as the system as whole, through increased efficiencies and cheaper care delivery.

Travis Good is an MD/MBA involved with health IT startups. More about me.

  • I spoke on the failure of patient portals at a HIMSS conference in Seattle last year where I outlined what i saw as several key failures:

    1) they are all about the clinician and not about the patient. They are sharing clinical information, mitigating clinician communication risks, limiting the ability of patients to disrupt the clinician, etc. So why should I as a patient want to engage in something that is NOT about me and NOT for me.

    2) patients don’t want to engage with multiple portals. Patients are a single person, providers come from an array of organizations, all of which want to have their own portal to address the issues listed above. Why would I want to have a desegregated experience, view, with a dozen passwords, and interfaces? There needs to be one portal experience for one patient. Now the pushback I have heard is that consumers are fine with dealing with many portals in the retail world. But look at the companies that have been the most successful, like Kayak, they aggregate multipel portals into one to simplify your life so you don’t have to go to a dozen sites. Amazon does the same. Apple does the same with its app store.

    3) most of my healthcare activity and data emerges outside the clinic. We spend very little time in the clinical environment. Most of our healthy and unhealthy behaviors and activities occur outside the physicians control and influence. We need to collect that data and information and use it to guide behaviors and determine if we need to see the doctor and then share it with him or her when we arrive or make an appointment. This is where the future of PHRs is moving and this is the value that portals need to provide and they don’t.

    4) there are many more, but these three are enough to kill the effort.

    If healthcare organizations put the patient in the middle and tried to create consumer oriented portal strategies, they would look NOTHING like what we see today.

  • Great article and completely agree with the points. There is a fine line between what patients are willing to consume versus what they are willing to pay for. The hard answer (as discussed) is they are willing to pay for actual healthcare, not the same things they are currently getting for “free” in other industry’s such as air travel. Those free perks (online scheduling, mobile apps, kiosks) are all baked into the cost of the ticket….and the cost of the ticket has been on the rise in response. In healthcare, we are pushing to reduce costs. So who pays for the patient portal, the mobile app, or the kiosk if the patient is unwilling? Something we are all challenged with figuring out.

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