Doctor Booking App Zocdoc To Change The Revenue Model despite objections

One of the leading healthcare website Zocdoc which is being used by various health providers, including optometrists, dermatologists, and dentists, is planning to eliminate subscriptions and is going to shift to a model that charges for booking every new patient. THough there are many objections from various longtime providers, the company is planning to go ahead with the model.

The company officially sent an email to all users in New York on Tuesday informing them of the new model and the pricing rule it follows. The Zocdoc website predicts that in New York, where the company is based, half of its participating providers will pay the same or less amount of money for the pre-booking fee than they do now. It is said that a typical subscription charge might come to $3,600 a year per doctor.

When explaining about the change in the model, Zocdoc said that the purpose is to accelerate the company’s involvement in less-populated areas, where doctors can’t see the required number of new patients to justify the flat fee. But this change in the model has faced fierce resistance from many physicians in the New York area.

The physicians expressed their concerns about the company’s shift to a new model. The physicians claim that the pricing change made by Zocdoc will be very much unsustainable for their practices because it’s challenging to recoup the costs for every new patient since most patients don’t make regular visits. A dermatologist in New York, Peter Chien, told that he would have to pay $35 for every new patient and the cost goes to $80 if the person is seeing a procedural dermatology specialist. He says that this would make his prices go up seven-fold than the previous costs.

Multiple investors including Jeff Bezos back the Zocdoc decision, and the company has been valued at $2 billion. It’s a decision for changing the model initially came in last year but didn’t roll out, but is now going ahead with it. It is being reported that Changes in New York will come into effect on April 1, and all the current customers are allowed to keep their existing contract until it’s up for renewal. The rollout is supposedly going to happen state by state.

In a letter to all its users the CEO Oliver Kharraz wrote in “Providers who receive a greater volume of bookings from our Marketplace have benefited the most from this flat fee structure,” further he added “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.”

In the new model, the booking fee will apply even if patients don’t show up to their appointment. Some physicians are concerned that they might get in trouble for paying a booking fee to Zocdoc website since in some of the state and federal laws there are rules that prevent doctors from paying a third party for referrals. Kharraz mentioned that the model complies with all the regulations, though he said the company would stop admitting Medicare and Medicaid patients in New York “until we have affirmative confirmation that it’s okay.”Zocdoc mentions itself as a marketing base for doctors to grow their practices, that is it doesn’t offer any guarantees.

Richard Gallagher

Richard Gallagher has more than a decade of experience in writing. He started as a general news reporter before moving to FinanceStead's team as a financial news writer. He is passionate about stock trading. He also loves to travel a lot.

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