Shaking Things Up

If you want to mess with the healthcare system of today - play with cost transparency. Carol.com does just that:

(CNN) A new Twin Cities company called Carol is trying to change that with a Web site that gives consumers a "care marketplace" to search for medical services, compare quality and price and make appointments.

Carol joins an effort to transform the U.S. health care system by putting consumers in charge and letting the market do its work.

"We want to let consumers define value," said Tony Miller, Carol's founder and chief executive officer. "We don't have care competition in the marketplace today."

The free site, which went live in January, generates revenue from health care providers who become "tenants" on the site. When a consumer sets up an appointment with a clinic or doctor on Carol.com, the provider pays the site a fee.

It is interesting to look at the responses of the nay-sayers:

But Dr. Sidney Wolfe, director of Public Citizen's Health Research Group, said the site is nothing more than advertising, and he hoped it wouldn't catch on.

"Among physicians, there's a belief that health care is too critical ... to be left to the usual marketplace," he said.

. . .

If the site becomes more comprehensive, Carol.com would be most useful to people with high-deductible plans, health savings accounts or those without health insurance, said Elizabeth Boehm, an analyst with Forrester Research who studies the health care customer's experience.

She was skeptical of the site's prospects because many people's choices are limited by their HMO.

"(Price is) just not what drives people to make their health care choices," Boehm said. "The challenge for a site like this is that while conceptually it's good ... the reality is there are only a small group of customers looking for that."

Baloney. With patients being responsible for more and more of their out-of-pocket healthcare costs, I believe this idea will catch on like wildfire.

It is interesting that the Park-Nicollet Clinic in St. Paul joined forces with the website developer. It is no secret that this healthcare system has struggled in the past to compete the competetive Twin Cities healthcare marketplace. By competing head-to-head on price, they may have found a new way to attract more patients in to their system. This in turn, may force others to follow suit or to undercut their prices (which would be good for consumers). As the company's founder and CEO, Tony Miller states:

But Miller said consumers are starting to realize that choosing cheap health care might come back to haunt them in the form of higher premiums or other increased costs. And he thinks there are plenty of people like him who might want different options for care and are willing to pay more out-of-pocket to get what they want.

He said his idea for Carol came in part from his own experience with a heart condition for which he was told he needed surgery. A second professional recommended medication, which Miller, 41, said worked.

"I had the wherewithal and some of the contacts to help me navigate and find answers in the health care system. Most consumers don't have that," said Miller, a partner in the venture capital firm Lemhi Ventures, which has invested $25 million in Carol.

Although the number of ailments are almost overwhelming to review, I found it interesting to shop by price alone for things like a root canal, asthma treatments, or what one place is charging for a cardiac CT to obtain a calcium score that throws in "free parking close to the door!"

While the number of "tenants" on the website are small now, look for this idea to grow as smaller, less known healthcare services compete head-to-head with the Big Boys of healthcare.

-Wes