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Health care goes on auction block

Local company brings online bidding technology to surgery and prescriptions. Critics worry patient care will suffer.
The Orange County Register

A company that struck a nerve among doctors after launching a Web site that lets consumers compare prices for plastic surgery has come out with a new service for finding the cheapest prescription drugs. Officials at Medicine Online figure consumers already depend on the Internet to find the most affordable plane tickets and would benefit from comparing prices for nose jobs and Nexium.

"You do all your research on the Internet anyway. Why not have a site that has everything you need to make an informed decision about your health?" said Kevin Moshayedi, chief technology officer and co-founder.

In August, the Huntington Beach company launched, which targets price-conscious patients seeking the cheapest prescription drugs. The patients enter information from a prescription and then pharmacies from across the country have 72 hours to name a price. The process is free and non-binding.

But the site, as well as, has drawn critics who say that shopping for medicine shouldn't be like browsing eBay and that there's more to health care than a low price.

In 1999, the privately held company launched the surgery site, offering a place for patients to choose a procedure, answer questions about their medical history and then wait to hear from doctors - with prices, physician credentials and malpractice records included in the mix. The company says it matches about 45 consumers with doctors every day, though it can't say how many of those connections result in surgeries.

When patients seek bids, participating doctors' prices are automatically listed. A patient can then opt for an in-person consultation, if interested.

Doctors and medical associations quickly denounced the site as auctioning off medicine at the lowest price.

"It takes out from the equation the doctor/patient relationship and a good physical exam," said Dr. Dan Mills, a Laguna Beach plastic surgeon. "Medicine is not like buying a car."

The exposure was also a turning point for the company.

"We were on 'Good Morning America,' " Moshayedi said. "Bid for surgery put us on the map. We were getting (exposure) because of this unique service."

But company officials believe health care should have the same transparency in prices as any other industry.

David Puffer, vice president of medical development for the company, said consumers often have little way of discovering prices, though they don't make decisions on cost alone.

"You never talk about money," Puffer said of the culture of medicine. "You never talk about cost. That is demeaning to the profession."

Mills, the Laguna Beach plastic surgeon, said that when prospective patients make price inquiries, his staff provides a range, because the same procedure isn't identical for different people.

"I can't think of one that's always a cookie-cutter (price)," Mills said.

Medicine Online hopes to eventually charge pharmacies a commission for business from the site. Company officials say their revenue comes from Internet advertising, which includes Wal-Mart's pharmacy, American Express and AT&T.

"It's almost like an auction type of Web site," said Loc Dao, a pharmacist in Pennsylvania who signed up as a provider. "It carries a heck of a lot more credibility than any of the online pharmacies I've seen. When you bid, they actually post the pharmacy, their state license number, address and Web site. It's very legitimate."

But other pharmacists say patients should not lose the face-to-face relationship of a local pharmacy. For one thing, splitting prescriptions among various pharmacies could reduce the chances of catching harmful drug interactions.

"Everyone is so geared to the commoditization of drugs, just getting the cheapest price," said Michael Negrete, a pharmacist and vice president of professional affairs for the California Pharmacists Association. "People aren't realizing these are powerful medications. When not used appropriately or monitored, they can kill people."

Puffer said consumers are directed to enter all their drugs, not just the ones they're seeking to purchase through the site. And pharmacist Dao said the goal is to offer the kind of prices that will entice customers to do all their business with one pharmacy.

But other questions remain.

For instance, in a recent consumer query for Botox, the name of a retired doctor popped up as a potential provider. Another doctor, who performs LASIK eye surgery, said the price listed on the Web site was inaccurate.

"These (prices) are very misleading," said Dr. Richard Weiss, a Newport Beach ophthalmologist. "When someone comes in, they don't really know what they need. They don't know what the best procedure is for them."

Moshayedi said doctors have the responsibility of keeping the information and prices current.

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