The healthcare system is phenomenal at obscuring how much things cost and where your money goes once it leaves your pocket.
Using a healthcare service today is similar to walking into a supermarket, going down the aisle, and as you put food in your cart, other people put food in your cart too — sometimes without you even knowing it. Then, instead of checking out, you just leave and put the groceries in your car. You drive home and eat everything you bought. Six months later, you get a bill for the groceries. It’s often just a single number. You have no idea how much each item costs or even if you received every item for which you’re being charged.
Can you imagine a website saying, “Give me your credit card, use all of these paper towels, and when you’re finished, I’ll tell you how much they cost.” No one would ever use this service — yet this happens in healthcare every day.
On the other hand, outside of healthcare, unrivaled levels of transparency have permeated the consumer experience. Right now, you can read about the factory that makes your sweater or see the goat that provided the wool for your new pair of shoes.
Patients deserve the same, if not an even higher, level of price transparency in healthcare as they receive in other aspects of their life.
As I’m sure many of you have seen, over the last 3–4 years there has been an influx in Direct To Consumer (DTC) telehealth companies that not only provide access to a doctor but also enable you to have medication prescribed by your doctor shipped directly to your door.
While DTC companies are far more transparent in terms of the cost borne by the patient, which is a dramatic improvement on the status quo, rightfully so, questions still remain to better understand these new channels to receive care.
People are curious about:
- How are doctors on Ro’s platform compensated?
- How does Ro make money?
- How is the Ro Pharmacy involved?
Let’s dive into each one.
HOW PHYSICIANS ON THE RO PLATFORM ARE COMPENSATED
When a patient comes to Getroman.com, QuitwithZero.com, or HelloRory.com they start by engaging with an adaptive, interactive patient intake process. (We call this the “online visit.”) Ro’s adaptive online visit intelligently collects information about a patient’s unique medical history, symptoms, medications, most recent physical, allergies, and includes patient information and patient images that are stored and forwarded to their physician.
Our software analyzes patient responses in real time and highlights key information, flags contraindications and potential risk factors, pings a national third-party database for additional patient medication information, and then presents all of a patient’s health information to their physician for review. You can read more about our adaptive online visit here.
After completing their initial onboarding, patients pay $15 for a physician consultation and on-going support. The entire $15, minus credit card transaction fees, goes to a physician-owned entity (i.e., the physician’s practice).
Physicians on Ro are compensated directly by their patients.
This is the exact same process as if you walked into a provider’s office in person, handed the front desk your credit card, and were charged $15.
In exchange for the $15, the physician provides an online consultation and ongoing support. If safe and appropriate, the physician may also issue a prescription to the patient. Ongoing support includes 1 to 1 messaging, consistent follow ups, and any titration of medication or update to their treatment plan.
HOW DOES RO MAKE MONEY?
Ro makes money in two ways:
- Providing software and administrative services to providers
- Fulfilling patients’ prescriptions if they choose the Ro Pharmacy Network
It might be helpful to think of Ro through the analogue of a hospital. A hospital might offer both healthcare services and pharmacy services. Obviously, a hospital offers a near infinite number of services compared to Ro, but the idea of connecting a patient to different service providers to provide a seamless experience has existed for a long time. In fact, we’ve recently seen wonderful innovation in this space from CVS (e.g., Minute Clinic), Walgreens (e.g., telehealth kiosks), and Walmart (e.g., Walmart Care Clinics) by offering health care services for some of the most common ailments, in addition to pharmacy services, in order to provide more comprehensive and continuous care to their patients.
If you visit one of these health clinics or telehealth kiosks and your physician recommends a prescription, you’re able to have it dispensed at the pharmacy just a few steps away, which is incredibly convenient. However, you are not required to have your prescription dispensed by the adjacent pharmacy and can choose whichever pharmacy you prefer.
In an industry that is incredibly disjointed and where data can often be siloed, having the ability to seamlessly access multiple healthcare services during a single visit (e.g., health clinic and pharmacy) can provide tremendous convenience and the opportunity for greater continuity of care.
In this instance, a patient compensates the health clinic for the consultation and, if a prescription is written, they can pay the pharmacy to have it dispensed.
Ro functions similarly. We’ve provided patients with access to a digital health clinic and an online pharmacy.
1. Providing software and administrative services to providers
Physician practices pay Ro to use Ro’s software. Using this software, providers are able to offer high quality care via telemedicine. In addition, Ro also handles other non-medical, administrative tasks to make their lives easier — e.g., software maintenance, payment processing, background checks, provider credentialing, and malpractice insurance procurement.
In essence, Ro provides the backend operations of running a digital health clinic “as a service” to providers.
Here is a quick visual:
At Ro, a physician is compensated $15, regardless of whether a prescription is written. The patient is paying for a doctor’s consultation and ongoing support. This is to ensure that compensation never influences whether or not a patient receives a prescription.
Ro’s job is to make a physician’s life easier and to enable them to deliver high quality care. If we don’t build software and provide services that actually make delivering high quality care seamless, providers will stop using Ro’s platform and use another telehealth platform to practice medicine.
The physicians on the Ro platform must provide high-quality care to patients (practicing physicians do not hold equity in Ro). If they don’t offer a great experience to patients, just as in the physical world, patients will not continue to seek their advice.
2. Fulfilling patients’ prescriptions if they choose the Ro Pharmacy Network
If a physician on the Ro platform determines that it is safe and appropriate to issue a prescription, and a patient elects to use the Ro Pharmacy Network, Ro makes money by fulfilling the patient’s prescription (similar to the clinic/pharmacy example above).
In addition, a patient’s choice of pharmacy is not shown to their physician until after the physician has determined if treatment is safe and appropriate. This is to ensure that a physician is never incentivized to treat a patient differently depending on which pharmacy they choose.
And if at any point, a Ro member who is using the Ro Pharmacy Network wants to transfer their prescriptions to a different pharmacy (e.g., CVS, Walmart), they can simply contact the Ro Care Team or their physician and we’ll take care of the transfer.
Most members choose the Ro Pharmacy Network because it is often less expensive, it gives patients complete control over scheduling, it’s discrete, and it’s convenient to have their medication shipped to their door. But we also have many members who choose to have their prescription sent to their local CVS, Walgreens, Walmart or an independent pharmacy.
Because a patient can transfer their prescriptions to any pharmacy in the country, Ro’s pharmacy is perfectly aligned with our patients’ interests.
We need to provide the best experience or patients will go elsewhere.
Ro must compete on quality, convenience, and price with every single pharmacy across the country. It is on us to make sure we always provide value to our members. We must earn their business every single day.
When we put it all together, one thing should be abundantly clear — the patient is at the center and in control of their care.
They are paying their physician directly. They decide which pharmacy dispenses their medication. Everyone is in service of the patient.
- A physician is paid $15 for a consultation and ongoing care, regardless of whether or not the physician writes a prescription.
- A physician practice pays Ro for software and administrative help so they can focus exclusively on treating patients.
- If safe and appropriate, the physician writes a prescription to the patient’s pharmacy of choice, which they only see after they have made a treatment decision and, by doing so, ensure that the patient’s choice cannot influence the physician’s decision-making process.
This post is part of a larger series by Ro to demystify telemedicine. To show patients, providers, journalists, and healthcare nerds how Ro works at an atomic level. Please share your unvarnished feedback. We’re building this for you. My email is email@example.com