CONCORD, NH-Open Health Market has been launched to help self-insured businesses solicit bids for health care directly from doctors or hospitals, thereby cutting out the industry "middleman." Perhaps unsurprisingly, the online business is drawing criticism from third-party payment companies.
Created by a doctor, a lawyer and a former benefits manager, Open Health Market allows employers to submit requests for proposals in a category of medical services and procedures. Health care providers then offer competing bids that are evaluated by the employer.
Attorney Dan Crandlemire, one of the site's co-founders, said if the employer accepts a bid, savings can then be passed to employees in the form of incentives such as a waived deductible. Crandlemire and partners Leonard Fromer M.D. and Peter Hayes, former benefits manager at Hannaford Brothers supermarkets in Maine won't be directly involved in any deal structuring – their goal is to bring the parties together.
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"It brings buyers and sellers closer," Crandlemire was quoted in the article. "The further apart a buyer and seller are in a market, the more inefficient that market is."
But Lindsay Shearer, spokeswoman for health insurer Cigna Corp., expressed concerns that Open Health Market would focus on discounting services without taking into account other factors that impact costs. "It also does nothing to drive or incent the quality of services provided and may in fact create disincentives for quality improvement," she said.
Open Health Market officials counter that quality, patient satisfaction and convenience also would be part of the negotiations between employers and providers, who would have to meet the same accreditation standards set by the federal Medicare system in order to join the site.
Paul Fronstin with the nonpartisan Employee Benefit Research Institute also wonders whether employers want to take the time or effort to evaluate provides based on quality and other factors.
"Employers are trying to manage their costs and if they think direct contracting is one way to do so, they're going to try. They may feel like they can cut out some of the middlemen and get a better deal. And maybe the providers think they'll get a better deal by cutting someone out as well," Fronstin said in the article."But it creates a lot of work for the employer to put together a plan in which they're basically putting together the network, as opposed to going to a network."
Lori Nerbonne, founder of the patient safety advocacy group New Hampshire Patient Voices, said Open Health Market sounds like a great concept if companies ask for detailed data on quality and outcomes as well as cost, and they share that information with employees. But she also worries that companies won't share that information and will make decisions based solely on cost, to the detriment of consumers.
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