Offering various online payment options, listening to patient feedback, and sharing price lists are key factors in Caduceus Medical Group’s ability to remain independent and profitable in a competitive market.

Caduceus Medical Group, one of the only remaining independent, multi-specialty medical practices in Orange County, Calif., offers patient-friendly resources on its website—including online payment options, a price list, and patient reviews—to distinguish itself in a crowded marketplace.

That sounds like a response to consumerism in health care. But the concept of patient-as-consumer had not arrived when CEO Gregg DeNicola, MD, and his partners started the practice in 1999. The physicians, who were leaving a publicly traded medical group, opted to use customer-service oriented options to compete in a market that is dominated by HMO-based practices.

“We chose to be patient-centric, meaning we have a business plan that is focused on meeting and exceeding patients’ expectations no matter who the payer is,” DeNicola says.

It has worked. With 20 physicians in three locations, Caduceus has remained profitable since its inception and its partners intend to remain independent.

Trying New Payment Options

When Caduceus began offering online credit-card payments in 2009, administrators were surprised to find that many patients were uncomfortable with the idea. “So many patients balked at giving their credit card information, even in an encrypted system and even through a patient portal,” DeNicola says. “As many as 10 to 20 percent just either refused or called to make sure it was safe.”

Knowing that eBay had made PayPal a popular choice for online payments, Caduceus gave it a try. “Sure enough, as soon as we offered PayPal, patients started using it liberally,” DeNicola says.

Many patients also pay with credit cards—at the point of service, by calling the office to give the number, or by writing the number on their paper statements. DeNicola wants to add other payment options like Apple Pay, as well as start taking Visa and other credit card payments online. But for the time-being, the practice accepts only PayPal payments online.

“I think what patients really like are options,” DeNicola says. “They like having a lot of different ways to do things, so they like having payment choices.”

Getting Real-Time Patient Comments

Caduceus is also using consumer-oriented online tools to learn about patient experiences with the practice.

Surveys. Patient comments gathered through a survey posted on the medical group’s website revealed that patients were having difficulty reaching the practice because its phone system was overloaded after many Californians gained insurance through the Covered California exchange. “I knew it was a problem, but I didn’t realize how big a problem it was until surveys told us how frustrated patients were when they couldn’t get through on the phones,” DeNicola says. “So we immediately bought a new server and hired four more operators, and that solved the problem.”

Caduceus gathers patient responses through a link to a patient-satisfaction survey on its website and in the medical group’s monthly e-newsletter. In addition, four times a year, each Caduceus location solicits feedback from patients in a paper survey administered on a single day.

The survey invites patients to rate the practice on six criteria:

  • Overall patient experience
  • On-time delivery of service
  • Professionalism of staff and providers
  • Physical condition of offices
  • Quality of service and understanding of patients’ needs

It also asks several questions—such as “how do we rate in comparison to other medical offices?”—and asks for suggestions for improvement.

Ratings and comments. Caduceus also invites patients to review the practice—including a rating of one to five stars. The company that provides the practice’s online appointment/scheduling software follows up with patients after their visits and encourages them to provide a review. The reviews are posted on Caduceus’ website, where anyone can see raves about certain clinicians and features of the practice, alongside occasional complaints about long waits in the waiting room.

Caduceus and Amazon have the same thinking about being transparent with patient reviews.  When DeNicola read an interview in which Amazon founder Jeff Bezos explained his rationale for posting customer reviews online, it resonated with him. “Bezos said, ‘Our customers are smart, and they know that every product has good and bad features. We don’t want our customers to try to read about our products elsewhere so we will post the reviews right on our site,’” DeNicola says. “That is what we are trying to do as well.”

The patient satisfaction survey and the online reviews help Caduceus continually improve its customer service. “Our goal is to teach our patients that recognizing our shortcomings is our key to growing and building our brand,” DeNicola says.

The only challenge Caduceus has encountered with the online reviews is the occasional patient report that rubs a clinician or staff member the wrong way. DeNicola coaches his colleagues to pat themselves on the back if they get a positive comment—and stay cool when patients are critical.

“The first thing we decide is if the patient has a point or not. If the patient has a point, no matter how it was written, we try to fix it by putting a corrective action plan in place,” DeNicola says. “If they don’t have a point, then we don’t want to get involved with it, so we just turn the page and move on.”

Posting Cash Prices Online

Another addition to Caduceus’s patient-friendly services is a published price list for self-pay consumers. Offered since 2006 and posted online, the list of about 70 services shows that flu shots cost $25, basic lab services cost $20, and wart removals cost $140. Even after the introduction of California’s health insurance exchange, about 5 percent of the practice’s patients are self-pay.

“Patients absolutely love it,” DeNicola says. “I have had new patients say they came to us right when they saw the cash price listing because they thought, ‘Hey, a physician group that would post their prices are most likely straight and honest and ethical. You wouldn’t do that otherwise.’”

Initially, the goal was to post prices for the 10 most common services. But the list has grown as patients have inquired about prices for other services. Caduceus does not try to correlate its prices to what insurance would pay—or even to a code or a diagnosis. Rather, practice accountants calculated what it cost to provide a service and added a mark-up to arrive at the price.

“We just made it one price—$89—for any office visit of any kind,” DeNicola says. “That’s still our cash price for an office visit today. Some of the other prices have been adjusted upward occasionally, but the main office visits just stay the same.”

DeNicola says this is acceptable because physician services have a low margin, and the practice relies on the profit from imaging services, physical therapy, laboratory services, nerve conduction studies, and other services.

“Our system breaks even on the doctor visits and, because we have everything under one roof, we make just a little bit on a lot of stuff,” he says. “If you do enough things, you’ll make enough money to grow. That’s what we do.”

Meeting Patients Where They Are

Caduceus Medical Group is using new technologies to meet patients’ payment needs and keep tabs on patient opinions and feedback. Incorporating these consumer-focused options has helped the medical group remain independent and profitable in a competitive market.

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Lola Butcher is a freelance writer and editor based in Missouri.

Interviewed for this article: Gregg DeNicola, MD, is CEO, Caduceus Medical Group, Yorba Linda, Calif.

Publication Date: Monday, May 18, 2015