With the economy in a rut, it appears that more people are turning to old-school trading of goods and services in exchange for health care. The Associated Press reported yesterday that “old-fashioned bartering has seen brisk growth since the economy soured.” To illustrate this, they point to companies like ITEX Corp., a Bellevue, Washington-based bartering firm which, in the last year, has seen overall membership increase by 45%. (The company’s health care business increased 4% during that time frame, not the 45% originally reported by the AP.) So how does all of this bartering work, and what are people offering up in exchange for root canals and visits to the eye doctor?
As explained by Rob Benson, Vice President of ITEX, it’s a bit more complicated than the doctor showing up at the mechanic’s and offering to inspect his bum knee in exchange for a tune up. Instead, ITEX clients offer up their services—everything from massage therapy and legal counsel to fine dining and auto detailing—into the network, and as payment, they earn ITEX dollars. This currency, they can then turn and apply to other goods and services input by other ITEX clients. Signing up for the network is free, but the company charges 6-7.5% the cost of each transaction.
The benefit to barterers, of course, is that even if they don’t have real cash in hand, they can use the ITEX dollars earned by cleaning someone’s house, for example, to then go and take their son to the dentist. And, Benson says, there is the added benefit of being able to fill vacant windows in your time by seeking business in this less mainstream forum. “If you’re not able to fill a time slot it’s lost—like a hotel room left empty.” Because people can only use ITEX dollars with network members, it can also generate new, otherwise unlikely business. “I was driving about half an hour to go to the dentist because he accepted ITEX dollars,” Benson says, pointing out that he passed several closer, likely more convenient dentists’ offices en route.
When it comes to health care, the vast majority of services people are buying with ITEX dollars are visits to the dentist and eye doctor, Benson says, likely because these services are often add-ons to health insurance plans. And, while ITEX does get some primary care providers in the network, the vast majority of health care services people use are the optional variety, such as plastic surgery or specialist skin care, or tend to be more holistic, such as nutrition and massage. Yet even if people are just supplementing their care via the bartering network, it’s still big business: health and medical services through ITEX now account for $1 million each month.