Affordable and Efficient Covid-19 Testing as a Model for Free-Market Healthcare

A Self-pay ENT Practice Offers Testing When Options are Scarce
Dr. Mary Talley Bowden, an ENT in Houston, Texas and owner of BreatheMD, credits her unique business model for enabling Covid-19 testing for her patients in the early days of the pandemic. In March 2020, when people were scrambling to find Covid-testing, the only option was to go to the ER. Even then, testing was restricted to those with symptoms and high risk patients, and people were reluctant to go the ER for fear of contracting COVID.
Responding to patient demand, Dr. Bowden researched and discovered that LabCorp was the only lab processing Covid-19 tests. Staring on March 14, 2020, she brought patients into her office for testing, using a nasal swab to collect, and sent the specimen to LabCorp for procesing. Being a self-pay facility, her practice was not bound by the restraints of insurance companies – it could charge an upfront fee for the service of testing while running the lab’s fee through the patient’s insurance, and anyone could test for any reason, whether or not they had symptoms.
For the first 1-2 weeks, LabCorp was able to keep up with demand and return results in 3-4 days. Soon though, the lab was slammed, and patients waited 2 weeks or longer to get their results. Test supplies ran out across the country, and Dr. Bowden pivoted to another collection method, nasopharyngeal lavage – effective but dangerous due to high patient contact.
At this point, Dr Bowden had made Covid-testing accessible to her patients, but safety concerns and slow turnaround time were still hurdles that needed to be overcome.
An Experienced Lab Creates a Safe Test with a Fast Turnaround Time
In April 2020, MicrogenDX, a lab dedicated entirely to antimicrobial detection since 2010, developed and validated a rRT-PCR test for COVID-19 using saliva as the collection source. Dr. Bowden had already been working with MicrogenDX for patients with chronic sinusitis and had confidence in their quality and reliability. She knew they had honest and transparent billing practices, charging a flat free and never balance-billing patients. Further, their method of collection – saliva – allowed contact-free testing with no patient discomfort. Results were promised and delivered the evening following the test, far sooner than what other PCR labs were able to do when the pandemic began.
Efficient Business Operations Create High Customer Satisfaction
BreatheMD already had operations in place to allow high-volume Covid testing. Unlike other physician offices or the ER, patients can book and pay for their appointments online. Instead of a tall office building, BreatheMD is located on the ground floor of a strip-center, allowing patients to get in-and-out easily, and sick patients never have to leave their car for testing. Results are delivered the next evening by a text message using an online texting platform that facilitates fast communication of results. BreatheMD quickly became known as the easiest and best place to get Covid testing in Houston.
High efficiency and reliability led to high patient satisfaction and increased demand. As MicrogenDX was able to keep up with rising test volume, BreatheMD never had to limit testing, and as more competition came into play, both the lab and BreatheMD responded by lowering their prices. To encourage easier streams of revenue, BreatheMD also offers a 20% discount to business accounts, and MicrogenDX has introduced pooled saliva testing that considerably lowers the per person rice of testing. These factors have brought the average price of a Covid test down 22% from $230 to $180 in the past 11 months, and in that time period, BreatheMD, a single-physician practice, has managed to test nearly 15,000 people.
Price Transparency and Containing Costs
The majority of competing test centers are located at Urgent Care Centers, where patients pay little to nothing out-of-pocket and run the entire cost of the test through their insurance. For the patient, this sometimes results in a surprise bill because the test center has submitted claims that the insurance company won’t cover. Even if the claim is covered, the cost of a Covid Test performed at an Urgent Care Center is far higher than what BreatheMD charges ($400+) which will likely be passed on to employers and patients with higher premiums and out-of pocket costs down the road.
Under the self-pay model of BreatheMD, patients submit their own claim to their insurance company to get reimbursed. Moving the burden of reimbursement to patients raises their awareness of health care costs, discourages unnecessary testing, and in turn, puts pressure on BreatheMD to keep its prices fair. Furthermore, BreatheMD and MicrogenDX are both incentivized to respond to market forces of increased competition by lowering their prices. Taking payments from the patients rather than the insurance companies also allowed BreatheMD to maintain enough cash flow to grow quickly and meet the rising demands for testing during a time when people where having trouble getting tested.
The free-market model of BreatheMD’s practice enabled many more people to get tested for Covid-19 sooner than would have been possible otherwise.