Wednesday, November 2, 2016 | One comment

How much do you pay for your health care?

By Audrey Mortensen

Price shopping for medical services can be very difficult and time consuming, as prices aren’t generally accurate, and they vary depending on who’s paying the bill. If you have to price shop through an insurance company, it gets even more difficult.

Health care providers rarely disclose their prices. For those that do, consumers are often not informed as to whether the posted price is for cash, with insurance, a co-pay, Medicare, etc. At times these disclosed prices do not incorporate all necessary costs—for example, an anesthesiologist’s fees.

Insurance companies often post general price ranges for their customers and contract with care providers to change pricing, which is often hidden from consumers as well.

This lack of cost transparency impedes the choices of consumers by preventing price discovery—the determination of a product or service’s price relative to supply and demand.

A few websites offer access to health care prices, such as HealthcareBlueBook, which offers a suggested “fair price” for services in your general area, just like you would look up a recommended price for you car on KelleyBlueBook. However, these prices are just a general average for the area, and are not specific to a particular health care provider.

Another website offers cash back for choosing to go with a less expensive facility to perform the procedure you need. Vitals SmartShopper offers state employees the opportunity to choose a quality facility to perform the same procedure for a fraction of the cost, saving the insurance companies money. In turn, the consumer receives a cash benefit of up to $500 for choosing to go with a less expensive facility to perform the exact same procedure. Unfortunately for Utahns, this program is not currently available in our state.

The 2014 passage of Obamacare included a requirement for hospitals to publish a list of their standard charges, updated annually. This list, known as the “chargemaster,” tends to publish the highest prices. Many consumers have lower prices negotiated through Medicare or their private insurance health plan, based on the at-cost price of treatment. Those with little or no insurance end up getting hit with the inflated costs.

Having the freedom to easily shop for the best health care prices is something that has become very limited in today’s marketplace. Pricing is seldom straight forward and difficult to obtain upfront. Most of the time a consumer never knows the full price of any given procedure until they receive a bill. Websites like these are a helpful (though incremental) resource for individual consumers, insurance companies, and healthcare providers to cater to an audience demanding a free-market style health care shopping experience.

Because of this lack of transparency and its effect on the market, some doctors are pushing back by operating cash-only practices in which total costs are disclosed up front. Two family clinics in Utah operate this way—one in Provo and another in St. George. Both explain on their website how they are able to keep their prices low by not going through an insurance company, and by being paying directly, rather than through a third party. All of their prices are posted online for ease of shopping. This makes it so much easier to decide which clinic to use based on price and quality of care.

With prices more easily accessible to the end consumer—as is the case with all products and services—a competitive downward pressure on prices will result, alleviating the burden not just on individual patients, but insurance companies as well.

A freer market in health care, and a reduction in costs, cannot occur without price discovery. As consumers can access this information, compare prices, and vote with their wallets, health care providers will help lift the veil of hidden costs and allow consumers to obtain the treatment they need at a price they can afford.

Tagged in: , , , ,

About the Author

Audrey is a policy analyst at Libertas Institute. Previous to Libertas, she worked in legislative and gubernatorial offices in New Mexico and for the Republican Party at state and national levels.


1 comments
Doersmom
Doersmom

We do not have health insurance. We opted to pay the penalty. We added our out of pocket costs for 10 years prior to obamacare and it totaled less than 5000.00. We could not justify spending upwards of 12,000 a year in premiums and a 10,000 deductible when we only paid less than 5000 in 10 years. Since obamacare was instated we have had braces, 2 pairs of glasses, 3 operations and a handful of MD visits to the tune of 6900.00. All procedures we negotiated since we were paying cash. We also shopped around. A most recent surgery which was done at st marks Hospital was the most expensive at 1800.00. It was an emergency. The anesthesiologist was 600, the doctor was 400 and the surgery center was just shy of 800. People say they cannot afford not to have health insurance. I say i cannot afford to have insurance. We could have paid out almost 66,000 in 3 years. As it was we paid out less that 6900 in 3 years and paid the penalty of less than 800 so far.

Featured