A “Costco for healthcare” sees itself as affordable alternative to health insurance

Betty Heiman, the co-founder and CEO of Transparent Healthcare is calculating that enough people who have lost their insurance because of the changes under the Affordable Care Act and feel that they can’t afford the new plans will opt for membership in a group that offers access to primary care physicians, specialists and procedures at […]

Betty Heiman, the co-founder and CEO of Transparent Healthcare is calculating that enough people who have lost their insurance because of the changes under the Affordable Care Act and feel that they can’t afford the new plans will opt for membership in a group that offers access to primary care physicians, specialists and procedures at Medicare rates.

“We are the Costco of healthcare and are addressing the concerns of the 31 million Americans who are uninsured.”

The company has been around since 2008 but has so far focused on New York City, surrounding New York counties and parts of New Jersey. It has expanded to Atlanta and expects to be in Florida soon. As of September, it estimated it had 4,000 members.

Prior to co-founding the company Heiman worked in strategic marketing. Co-founder and president Andrew Rieger previously worked for UnitedHealthcare, most recently as director of innovation and business development.

Heiman gave me an overview of her business in a phone interview that’s designed to serve the 31 million people without insurance. That figure comes from a Congressional Budget Office Report, and includes unauthorized immigrants and people ineligible for Medicaid as well as those who have declined to purchase insurance because they see the high deductibles that accompany the plans available to them as unaffordable.

“We are creating a new platform for consumers so they’re no left out of healthcare,” she said. “It is very much a concierge service for the uninsured, for those left out of the typical workings of healthcare.”

I mistakenly refer to it as insurance and Heiman corrects me. She emphasizes that it’s merely an alternative to health insurance. “The reason why [we] sound like an insurance company is we are providing the same access, but the price points and concierge level service that we offer — even insurance companies don’t provide this.”

Users provide a zip code where they work or where they live and the company offers them a list of participating providers across healthcare, dental and vision who charge Medicare prices for care. For example, Heiman said its customers can go to any OBGYN in the specified network and they would receive the same procedure at the same cost. “If you are unable to access healthcare when you are uninsured, and if you can get rates at the Medicare price point, that makes a huge difference.”

They can also view drug prices from pharmacies that work with Transparent Healthcare.

Although Heiman doesn’t see its service as a better option than insurance, she thinks that it’s better than no insurance. It charges $39 per household whether or not the members of that household are related. She points out that its service offers users a view of procedure prices beforehand, and likens it to the kind of price transparency that Castlight Health has promoted in the healthcare industry for employer plans.

It also provides unlimited access to telemedicine through a contract with Teladoc.

“We are literally delivering doctors in your neighborhood, where you work at a price point you can see that allows a consumer that can pay for the care that they need even though they can’t afford insurance products currently available,” said Heiman. “We are not changing the status of patients, but when a [member] walks into a primary care doctor’s office they are treated like any other patient of that practice.”

Asked what members should do when they feel unwell, she said it recommends using telemedicine, which doesn’t incur a charge since it’s included in the membership fee. The doctor would presumably recommend they see a physician in person if they think it’s merited. But as far as what happens if a member is involved in an accident or something else happens and they need to be rushed to a hospital, well, as Heiman sees it, they didn’t have health insurance anyway, so they’re no worse off. It seems like a risk that most people would want to avoid. But Heiman points out that in an ideal situation they would have insurance.

“The ACA has put so many things into motion and the market has to react. It kills me that the new uninsured are nothing but a side note,” she added.

Transparent Healthcare, Oscar and R Health are a few examples of the experimentation going on in the realm of healthcare, particularly with health insurance and alternatives.  When the newly elected members of Congress take office next year, it will be interesting to see how the health insurance debate evolves.

Update: This story has been updated to clarify that members pay for healthcare at Medicare price points, not Medicaid.