Payor definition: What it is and how to get out of it

When you visit the doctor, it should be just that – a doctor’s visit. Instead, there are lots of other aspects that make it miserable. One of them being a third party payer or a third party payor.

(Payer or payor? The spellings are interchangeable, according to the Merriam-Webster Dictionary.)

Third Party Payer Definition

So what are third party payers? They are the ones who pay.

When you visit the doctor, in many cases, you are using a 3rd party payer – your health insurance. While someone else paying for your doctor’s bills sounds great, there are a couple of problems with it.

payor-definition

Third party payers in healthcare

  1. You don’t know what they cover

When it comes to choosing a third party payer system, you probably didn’t have much choice. Maybe your employer decided which 3rd party health insurance you would have. If not, the decision most likely came down to price.

But what price? When it comes to a monthly premium, you may have options like pay now or pay later – meaning you pay a higher premium and lesser fees when you visit the doctor or hospital or a lower premium and higher fees when you are seen.

But what about those fees? Well, it depends on the doctor, on the service, and on the medication. They are all different.

  1. When you find out what is covered, it changes

Yes, it’s always changing. Not only are third party payors changing their coverage, but so are drug makers. What was $10 last year, could be $500 this year. Next year, you may need a prior authorization and may not even be able to get the prescription because the price has skyrocketed.

Take Novum Pharma as an example. In less than a year and a half, it increased the price of Aloquin 3,900% – from $241 to $9,561. As stated in this article, the cream contains two inexpensive ingredients.

Eliminate your third party payer in healthcare

Yes, you can cut out the middleman and still get the care you need, when you need it, without paying nearly $10,000 for an acne cream.

How? Prescriber’s Choice.

prescribers-choice

Prescriber’s Choice has introduced a model for dermatological prescriptions where medications can be customized and dispensed at the time of the office visit. The Prescriber’s Choice model promotes patient savings by only using the medications that are right for their patient and combining them if necessary to make one prescription.

While you will need a third party payer for most medical services, you don’t need one for all medical services. The possibility to eliminate a third party payor is a step in the right direction because it’s giving both physicians and patients another option in a broken healthcare model.