Recently, my employer switched to a high-deductible health insurance plan, which means I’m paying at the margin for most of my health care. As a result, I have become more aware of the true cost of the care I receive—and more aware of how difficult it is to figure out that cost.
As it happens, I need to get a new primary care doctor, because my old doctor doesn’t take my new insurance. Since I’ll be paying for my own office visits, I’d like to find a doctor who is inexpensive. But there is no good way to figure this out. I know that my old doctor was charging just over $80 for an office visit, but I can’t easily find out what other doctors charge.
I have also found that, if you ask doctors how much a service costs, they tend not to know. I once had an argument with my doctor, who did not want to give me a blood test for fear that my insurer would deny the claim for the expensive test. I later found out that this test costs all of $9.48 at my insurer’s negotiated rates, despite a list price of $169. When I got orthotics, my podiatrist told me they would cost nearly $600. But that was the list price; the actual insured price was less than $250.
The extreme opacity of medical pricing undermines the high-deductible plan model. High-deductible plans are supposed to help control medical costs, because consumers, with “skin in the game,” will make frugal medical choices. But how can we exercise frugality if we have to make the choice to buy medical services before we know what they cost? How can we comparison shop if we can’t easily find out competitors’ prices?
It doesn’t have to be this way. We could legally obligate hospitals and medical practices to disclose their full price lists—both the inflated list prices and the rates negotiated with each insurer that the practice accepts. This would enhance price competition between medical providers and significantly strengthen the Health Savings Account model. HSAs and high-deductible plans give health care consumers an incentive to impose price discipline. Pricing transparency would give them the tools they need to do so.
It can be done. Look at Solantic. They list their prices on their website, for crying out loud. I hope more doctors start doing it.
Reply to this commentLinkReport AbuseThis is the exact conundrum my girlfriend and I ran into when she was also switched to a high deductible plan, and opted to start an HSA. We are big fans by the way, and I'm jealous my employer doesn't offer this option.
She pretty much just started asking for prices on things ahead of time. Which was funny, because instead of a set price for a regular doctor visit, she would get a range. Usually something like $80-$120. And like you, often they wouldn't be able to tell her what things cost.
Another tactic she has started to use is asking just how necessary labs, medicines, and other tests are and if she's putting herself at risk without them. Dramatic, I know. The doctor would usually look at her funny and say something like, "Well, do you want to put a price on your health." To which my girlfriend would usually respond, "Well no, but I'm not the one setting the prices. I'd be more than happy to pay less than what your charging if you're willing to lower the price." All of a sudden, "necessary" became a relative term.
Reply to this commentLinkReport AbuseLack of universal coverage and the tax code are the real problem. Even if prices are listed for the insured, they will fluctuate based on the amount of uncompensated care they subsidize at any given moment. And hospitals/doctors have an incentive to charge really ridiculous prices to the uninsured because they can write off the difference when they inevitably receive less than that inflated figure (I once was charged 4000 for a stay in an emergency room, only to later have the entire bill forgiven).
But of course, none of this really matters that much in terms of controlling health costs, which mostly stem not from routine care but from waste, reduplication, and redundancy in the treatment of major illnesses. Because the deductible has presumably already been satisfied in those cases, its a matter of insurance companies and Medicare establishing best practices guidelines. Of course, Republicans wanted to block precisely that sort of change by sabotaging Berwick's appointment so that hospitals can continue to extract huge rents from tax payers and insurance companies. But I suppose saving $20 on the occasional doctor's appointment will make up the difference.
Reply to this commentLinkReport AbuseSorry to be so flip but... you're discovering this NOW? Holy crap, what sort of insular bubble do you live in?
The content of what you say is great and accurate, but it feels like this is something that should have been written in 2001, not 2011.
Reply to this commentLinkReport AbuseThis is a simple pricing strategy question - why charge everyone the same price if you can charge some people a higher price? Its annoying as hell for the average healthcare consumer, but in most cases, the consumer isn't paying, so their lack of understanding is irrelevant.
If a provider publishes their actual price list, then they would have to offer the same deal to a retail, cash paying client as they do to a giant insurer with buying clout. Providers of everything from airline tickets to consulting fees price discriminate, and in most cases the consumer has no idea what other people are paying.
To be honest, I'm a little surprised to see a blogger at the NRO suggest that the government "require" price disclosure from private market participants. This goes well beyond the market interference that some other odious "mandates" require. Why don't we mandate that everyone disclose exactly what they pay each employee? This sort of disclosure is
If you have an HSA or High-deductible policy, i would suggest its incumbent on the insurance provider to help you figure it out. If consumers want it enough the system should respond, right? Why not switch to an HDP that is more transparent?
I'm partial to the complaint, as I couldn't determine my co-insurance burden prior to a knee surgery, but to be fair, more than half the billing codes my surgeon and anesthesiologist used were not pre-determined - they were reacting and making decisions once I was under. So maybe there was a range of costs that could be projected, but i wouldn't have been able to know that head of time, and that was no one's fault.
More transparency would be great, but a published price list that everyone paid would make private insurers in a community rating environment useless, so why not have a single payer system.
Wait, i think you can disregard my whole argument except that last question.
Reply to this commentLinkReport AbuseFirst of all the insurance company has no interest in helping you. They are only interested in shifting cost to you. If you have a $2500 deductible then whether you pay $400 or $500 for a MRI is practically irrelevant. Why should they have time and staff devoted to this. It is just added cost.
Secondarily there certainly is price discrimination but the co argument is that there is no transparency. Airlines are a perfect example. I can search a dozen sites to find the right deal for my trip to Dallas. I can't find one that tells me what the MRI costs.
As a provider I try to give the best estimate that I can so people ocean make these decisions but it is nearly impossible. There is change on the fly but to just be able to compare apple to apples in a gross way the cost of a procedure is not a fundamental infringement of liberty. It is an aide to it.
Reply to this commentLinkReport AbuseIf I want to know what I am responsible for and take charge of it and I can't because of an unending maze of purposeful obfuscation. This is not an undo burden to business it is fairness to everyone. No one would dare run a business in a real market where no one knew the cost until the bill came. Another example of why healthcare is not a real functioning market.
I switched over to a HDP with HSA last year and like it, but yes, the lack of transparency is extremely frustrating and an example of how screwed up our health care system is.
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