Want to Trade? Physicians See Bartering as Added Revenue Stream

March 25, 2009

When you think of bartering, the image you might conjure up is of one farmer trading two cows and a horse to another farmer for his prized pig. But, that was then. Today, bartering has become a very sophisticated yet flexible form of doing business, and doctors are active participants.

When you think of bartering, the image you might conjure up is of one farmer trading two cows and a horse to another farmer for his prized pig. But, that was then. Today, bartering has become a very sophisticated yet flexible form of doing business, and doctors are active participants.

According to barternews.com, in 2007, International Reciprocal Trade Association (IRTA) member companies using the modern trade and barter process made it possible for over 400,000 companies worldwide to utilize their excess business capacities and underperforming assets to earn an estimated $10 billion dollars in previously lost and wasted revenues.

“I think everybody has been kind of brainwashed over the years that you can only pay with cash, check, or credit card,” says Todd Gerry, senior vice president of marketing for Tradebank, a global trade network. “And really, all we are is just another form of payment.”

How barter works

Bartering today utilizes a trade dollar currency approach that enables any business to provide its services in exchange for trade dollars as opposed to cash dollars. Krista Vardabash, marketing director with International Monetary Systems (IMS), explains that in the past, individuals needed the incidence of coincidence in order for a successful barter to take place. In other words, if you wanted to trade with somebody, they had to want something you had to offer or nothing would happen. Today, however, that incidence of coincidence is no longer necessary.

“You can purchase things from somebody who isn’t necessarily trading directly with you because you’re trading within a network of products and services,” Vardabash explains. “Maybe you want to have some cleaning done at your office, or you want to advertise. You can use your trade credits that way as opposed to cash.”

Barter companies like Tradebank and IMS assign their network members a broker who not only works to promote the member’s business, but acts as their purchasing agent. Whatever the member needs, their broker can help put together a deal for them. And members receive monthly statements, as well as 1099B forms at year’s end, indicating their balance and exactly how much they spent or took in via trade dollars. The latter is especially important, because in the eyes of the IRS, trade dollars are taxed the same as cash.

Doctors benefit

Brent Wakefield, MD, and Brian Lewis, D.O, have been using bartering exchanges virtually since they opened their family practice in Jenks, Oklahoma, almost three years ago. Wakefield says the main reason for joining the BXI (Business Exchange International) and ITEX networks was the need to build a patient base. “We started with zero patients on day one,” Wakefield recalls. “What you’re trying to do [through barter/trade networks] is reach out to people who wouldn’t otherwise see you. Now, they’re coming to see you because you’re in this network.”

Hansel DeBartolo Jr., M.D., J.D., a board certified plastic and reconstructive surgeon in Illinois, has been a member of the IMS trade network for more than 10 years. He admits he was a bit skeptical at first, but “what you do when you’re skeptical is you just do a small amount.” In other words, DeBartolo limited the number of trade dollars he accumulated “because we didn’t want to get more points than we could ever use.”

Budgeting, echoes Wakefield, is critical to making the barter/trade system work. “You’ve got to find a balance between how much you’re bringing in and how much you’re able to use within the network, because you can’t spend [the trade dollars] other than in that network.” Wakefield, whose practice has traded for office staples like printer ink and paper as well as meals in restaurants to give to employees as bonuses, says it’s also important to consider network pricing. “It doesn’t make any sense to be spending more for the same item in network than you would be out of network.”

Scratching the surface

Gerry says that Tradebank—with 47 offices in the U.S., 18 in Canada and about a dozen in Europe—is looking at adding several hundred more offices in the U.S. alone. “The interest [in bartering] today is greater than it has been since I’ve been in this business, and I’ve been in it for 13 years. We’ve hardly scratched the surface.”

Vardabash says that in today’s economy, barter networks can be a great way for physicians to extend their practice’s reach. “Some employers can’t afford health insurance for their employees,” but through barter networks they’re able to help employees obtain a physical or get needed dental work done. “That’s a great story of how people are tapping into healthcare services utilizing their trade dollars.”

Echoes Wakefield, “The majority of the people who use the networks with us are people who don’t have insurance.” The network enables them to meet their healthcare needs. And for Wakefield? “We’re getting business we wouldn’t have had otherwise.”

Ed Rabinowitz is a veteran healthcare writer and reporter. He welcomes comments at edwardr@frontiernet.net.