By Stephanie Howson | Medill Reports Chicago March 13, 2013 | In a healthcare environment where the price of surgery is both opaque and rife with discrepancies, the conditions are ripe for a discount surgery business like VIP Surgery Chicago.
Calling itself a “concierge surgical service,” VIP Surgery Chicago offers customers up to 10 discounted outpatient surgeries a year for a “membership fee” of $995. On the day of the surgery, customers will be picked up in a “luxury vehicle” and taken home after. Concierge medicine continues to provide patients with a choice in their care, however this company may not be an actual concierge medical practice. Many services have popped up seeking to ride the coats tails of the popular concierge doctor.
“One fee, lower than most deductibles, covers any procedures you need throughout the year, from a list of more than 10, at a special VIP price!” the company’s website states. The surgeries listed include gastrointestinal, orthopedic, gynecological and “general.”
But with the high cost of surgery, how can the company afford to offer so many procedures at such a low price?
It is extremely difficult to determine the cost of surgical procedures in the U.S., according to a February study published in the Journal of the American Medical Association. When researchers did manage to get price quotes for hip-replacement surgery from different hospitals, the cost varied by thousands of dollars.
Currently the way that hospitals price surgery can differ greatly, said Brad Myers, chief information officer of NewChoiceHealth.com. And the differentiations don’t stop there. Each hospital also charges patients differently based on what type of insurance they have.
The uninsured bear the brunt of the pricing inequality and are charged about three times higher than what insurance companies expect their clients to pay, Myers said. Someone without insurance could be charged up to 10 times what his or her insured counterparts are.
“For insured people it doesn’t matter how much the charges are because no one is paying any more than what the insurance company has bargained,” Myers said.
VIP is a very new company – the company’s website and small number of tweets were created in 2013 and the company’s Facebook page was started Dec. 7. The Facebook page currently has seven “likes.”
Even so, the company is advertising heavily on WBBM Radio 780 and has placed ads in Chicago Magazine.
The company’s website does not mention where the surgeries are done or by whom. It also doesn’t specify whether the membership cost covers the cost of 10 surgeries a year or if it is additional. It does state that there are “no hidden fees” and “no insurance hassles.”
Myers believes VIP’s business model sounds like a discount medical plan, not concierge medicine, which are often used by uninsured people looking to save money. These plans create a network of providers that guarantee discounts on specified medical procedures.
“They have a really bad reputation,” Myers said of discount plans in general. One reason for this is that many plans don’t deliver on the discounts they promise customers. Discount plans often ask for up-front payment for future discounts on medical procedures.
“I’d like to think it’s an innovative idea to make things affordable,” Myers said of discount plans. But he was at a loss to explain how VIP Surgery could afford what it offers on its website.
Patrick Miller, a research associate professor at the New Hampshire Institute for Health Policy and Practice, speculated that VIP was a referral service where for a fixed fee per year a patient can ensure same-day appointments, house calls and phone calls returned personally from primacy care physicians. Referral services are usually reserved for people who can afford extra care.
“I would think this would definitely not be for the uninsured,” he said.
Miller has seen this model before in primary care but was confused by VIP’s business model. “I haven’t seen it in this particular outpatient surgery model before,” Miller said.
The company’s advertising seems to be geared toward the uninsured or those with high deductible policies.
Miller was skeptical of VIP’s price offerings for so many low-cost surgeries. “I don’t think you could run this company just on $1,495 per person,” he said. VIP Surgery’s membership fee changed from $1,495 to $995 sometime in March.
It turns out that VIP customers pay for each surgery in addition to the yearly membership price of $995, according to a person who called the company for more information.
When she asked what types of surgeries were offered, she was given hernia and bunion surgery as two examples.
“The cheapest you can get for hernia surgery ‘around town’ was $3,000-$5,000,” the caller was told. She would receive “preferential treatment” with the membership fee of $995 plus $1,495 for hernia surgery. The total would be $2,490, less expensive than the low price of $3,000 she was quoted. The company representative said the VIP would be updating its website “in the next week” with more comprehensive pricing and surgical offerings. The website has yet to be updated..
All of VIP’s surgeries are done at the Advanced Ambulatory Surgical Center Inc. in Elmwood Park and VIP has its own doctors and nurses on staff, the caller was told.
The founder of VIP Surgery, Dr. Sev Hrywnak, is also the CEO of the surgical center.
The company spokesperson was very open in offering a tour of the facilities, saying potential clients are given tours all the time.
Officials of VIP Surgery could not be reached for comment. A Medill News Service reporter called numerous times and was repeatedly told Hrywnak would call back. He never did.