Healthcare scheduling website Zocdoc announced earlier this year that it has decided to shift away from its long-standing subscription-based model in favor of a new pricing system that charges healthcare providers for each new patient booking. This change represents the New York-based company’s first pricing model change since 2012.
The new pricing system was announced to New York State providers in January, and Connecticut, Colorado, Georgia, Pennsylvania and Washington providers have also transitioned to the per booking system. The company plans to continue to roll out the pricing changes state by state.
Under the new model, providers will pay a per-booking charge for each new customer, ranging from $35 for primary care physicians to $110 for dentists. This fee will be charged whether or not the patient actually attends the appointment and regardless of what services are provided. Providers will also have to pay an annual licensing fee to Zocdoc, though this fee will be less than the typical annual subscription fee of $3,600 under the old model.
Zocdoc estimates that about half of New York’s participating providers will pay the same or less under the new pricing model as they did under the old. According to Zocdoc CEO Oliver Kharraz, the changes to the pricing structure were deemed necessary as the old subscription model made the service too expensive for certain healthcare providers to participate in: “Providers who receive a greater volume of bookings from our Marketplace have benefited the most from this flat fee structure. However, it has been a less sensible economic decision for the many providers who received fewer bookings via our Marketplace — particularly those in less densely populated rural and suburban markets or sub-specialized areas of medicine.”
The payment model changes have not come without controversy. Many physicians claim that a model that charges per booking is unsustainable as they will not be able to recoup the costs incurred with each new patient. For example, one New York dermatologist told CNBC that he estimates his costs will increase seven-fold.
Other healthcare providers are worried that the booking fee-based system will run afoul of state and federal regulations that bar doctors from paying third parties for referrals. Kharraz stated that Zocdoc’s model fully complies with the law, though the company plans to stop admitting Medicare and Medicaid patients in New York “until we have affirmative confirmation that it’s okay.”