"We're perfect for Medibid because we control the whole thing," he said. "We have pathologists, anesthesiologists and surgeons." His profit margin on Medibid cases -- he has done only two surgeries so far but hopes to do more -- is adequate, possibly "as little as 10 percent."
"We can do a $20,000 surgery for $6,000," Gallups said. Why the price difference? "Greed," he replied. "Hospitals are making a killing."
Hospital profit margins average about 5.5 percent, according to 2012 statistics released by the American Hospital Association. Richard Gundling, vice president of the Healthcare Financial Management Association, whose members include financial executives from hospitals, disputed Gallups' contention.
"Hospitals provide a community benefit and are responsible for cases that can't go to surgery centers," he said. "Hospitals are providing things like shock-trauma units and emergency care services that have to be covered 24 hours a day, seven days a week."
Peter LePort, a surgeon in Orange County, Calif., recently performed hernia surgery on a Medibid patient for $2,500. "Not billing insurance cuts out a huge amount of the cost," LePort said. "I can literally make the same amount of money." Of the $2,500 fee, which the patient charged to his credit card, LePort estimates that $1,200 to $1,400 went to the surgery center of which he is an owner, $400 to the anesthesiologist, while the remaining $600 to $800 was his surgical fee.
NYU's Caplan says he worries about the lack of oversight in free-standing surgery centers. "Who is the peer review?" Caplan asked. "There is none. And it doesn't take a lot of qualifications to open one."
For Bill Lang, an engineer in Gainesville, Fla., who has a $2,500 annual deductible through a Blue Cross plan, using Medibid proved to be a boon.
Lang, 66, needed minor sinus surgery after an earlier procedure failed. His ENT told him the procedure would cost $3,000 and would be performed in a surgery center under anesthesia. Lang thought both the charge and the anesthetic were excessive and decided to try Medibid.
Fri, Aug 1 2014