Open Pricing

An eBay for Purchasers and Providers. Many providers would love to have an opportunity to pitch fixed-price episodes of care like that to big employers, says Hayes. But there has never been a mechanism. Now, in concert with Don Crandlemire, a health care attorney, and Len Fromer, M.D., executive medical director of the Group Practice Forum (a research and education arm of the American Medical Group Association), Hayes has founded a website called Open Health Market — http://www.openhealthmarket.net. They hope it will become "an eBay for purchasers and providers." The former can sign in to post RFPs for MRIs, CAT scans, joint replacements, heart procedures and the like; the latter can respond with a flat-rate price tag.

"Instead of paying for every widget," explains Hayes, purchasers will know up front what the bill will be — a simple, direct and translucent transaction. "If you talk to providers," says Hayes, "they're really, really angry at health plans because, for providers, negotiations have always been win-lose situations. Even if they offer higher value and lower cost, they're getting paid the same."

Through Open Health Market, he explains, "we're hoping that, as purchasers in the community talk with providers in the community, it'll bring health care back to the community level — without a third party intervening right in the middle of it. With more transparency, patients will vote with their feet. Providers will have to compete. And it creates a much different revenue model."