Know medical costs before the procedure

by Jackie Norris

Rick Preston of Town 'n' Country, Fla., wasn't worried about saving money when he had a quadruple bypass and heart valve replacement two years ago.

"I have no idea what the total cost of the surgery was because I was only interested in my bottom line," says the Angie's List member.

But just a month prior, when Preston didn't have health insurance, he compared prices for extensive tests on his heart and got estimates ranging from $25,000 at a Tampa, Fla., hospital to $2,500 at a hospital in Panama City, Panama.

"If I didn't have insurance now, I would start checking prices again," says the 61-year-old.

Experts say patients historically haven't asked or cared about medical costs. But with an estimated 46 million Americans uninsured and an additional 10 million to 11 million with high-deductible plans, providers say they're seeing more patients today concerned about what they're spending out of pocket.

Results from a recent online poll back the growing trend, with 61 percent of Angie's List members saying they compare health care costs at least some of the time. That same percentage of members say they'd be more likely to compare costs if prices were more accessible.

Less 'Cadillac care' creates a need to know

Jeffrey Rice, a former physician and attorney in Nashville, Tenn., says it's traditionally been difficult for patients to find and compare prices on health care services due to a lack of transparency in the industry.

"People don't realize the same procedure may vary by 500 percent or more in the same town, or even on the same block," says Rice, who in 2008 founded Healthcare Blue Book, an online tool that is helping Angie's List members search for fair prices on health care services. "Because people had insurance or the government paying their health care bills, they weren't in the habit of asking about or caring about costs, and providers weren't used to discussing prices or explaining why things cost as much as they do."

Jonah Keegan of Decatur, Ga., says he's had to alter his way of thinking thanks to his health insurance plan with a $3,000 deductible.

"I didn't care about price when I had 'Cadillac care,'" says the Angie's List member. "Now it's a much bigger concern." While Keegan says he hasn't had to compare prices yet, he still has some apprehensions. "I'm afraid it may be difficult to find a doctor under my insurance who would offer a lower price," he says.

Rice stresses that in-network providers will charge a wide range of prices for the same procedure and recommends calling several for their fees before scheduling an appointment. Health care providers typically have standard fees, known as "billed amounts," or the sticker price. But they also negotiate with insurance companies to pay a fee, known as the "allowed amount," that is far less than the billed amounts but still considered as payment in full. This negotiated fee is what Healthcare Blue Book considers the fair price.

"You're very likely to find a provider who will be able to meet the fair price," Rice says, but notes a lot of patients don't want to switch doctors to lower costs. "Just tell your provider price matters," he advises.

Taking notice of consumer demand

While some doctors may be willing to help you pinch pennies, Dave Mordo, the legislative chair of the New Jersey Association of Health Underwriters, says others may be opposed to disclosing their prices upfront.

"Providers fall back on the competition nonsense," says Mordo, who believes transparency allows patients to make informed choices. "They may fear they can't let their colleagues find out what they're charging or their patients will leave them."

But some hospitals, such as highly rated Alegent Health in Omaha, Neb., have already started taking a closer look at pricing so patients can budget accordingly. In 2007, Alegent launched My Cost — an online tool that gives patients an estimate based on their insurance plan and personal information.

"It gives patients peace of mind," says Linda Waldmann, the business manager of Alegent Health. "It's no longer a big black hole you walk into sight unseen. You wouldn't buy a car without checking under the hood."

Insurance companies are also taking notice of consumer demand for price transparency. Aetna, a highly rated insurance provider based in Hartford, Conn., launched an online out-of-pocket estimator in April that's based on each customer's benefits and network of providers.

"People have more financial stake involved and want to know what they'll pay," says Wayne Gowdy, a senior project manager with Aetna.

Hospitals typically on the high end

Ginny Collins of Springfield, Ill., is happy her son's doctor suggested checking prices before going ahead with a throat procedure. The longtime nurse found it extremely difficult to get the information — but she's glad she was persistent. She compared prices with the hospital she worked for and a local clinic and was surprised by the vast price difference.

"It would have cost $6,900 at the hospital and $1,500 for the clinic," she says. "Guess where we went?"

Both Rice and Gerard Anderson, director of Johns Hopkins Center for hospital finance and management, say hospitals tend to be more expensive. "They usually charge two to four times more than other providers," says Anderson, who attributes the higher price to larger overhead.

People don't typically question why hospitals charge more, says Dan Perrin, an expert in health savings accounts and head of the HSA Coalition. "There's a perception hospital prices need to be high," he says. "But you walk into these places and they've got marble floors and basically gold-handled toilets."

While hospitals may charge more, experts say it isn't always possible to avoid getting care there.

"Any time-sensitive or emergency care doesn't lend itself to price comparison shopping," says Kathleen Stoll, the director of health policy at Families USA — a nonprofit health care advocacy organization.

Stoll warns patients may also find it difficult to do cost comparisons for complicated elective procedures. "The degree of injury and the patient's health may influence [price]," she says and recommends having a frank discussion with your provider.

Put the focus on quality care

Dr. Robert Garrison, a highly rated dentist in Columbus, Ohio, says he fears the shift toward transparency and shopping will demote health care providers to the same status as a technician, like a car mechanic. "It's the wrong basis to decide on your medical care," Garrison says. "It should be about sixth on the list of deciding factors."

And even though price is quickly climbing as a priority for consumers, others agree dollar signs shouldn't sway your decision.

Dr. Rita Stec, an internist in Palm Desert, Calif., who publishes her fees online, stresses patients also need to seek the best care. "Do the legwork and check up on their reputation, training and experience," says Stec, who suggests looking at Angie's List ratings. "Once you've identified a good provider, then ask about price."

After a dental exam, Evan Austill found out he needed a root canal, and his dentist, Dr. Allen Blourchian of Franklin, Tenn., gave him an estimate of $1,300. Since Austill was without insurance, he logged on to Healthcare Blue Book's website after his visit and found the fair price listed at $900. He printed the page and presented it to Blourchian.

"As a general rule, I don't allow patients to walk into my office and dictate my fees," says Blourchian, who adds he did make an exception because he had no other appointments scheduled and could fit Austill in immediately.

Regardless, Austill says he's glad he asked. "I got to put $400 back in my pocket," he says. "I think a doctor that offers me a better price cares about my economic and health status — that's the type of doctor for me."


Comments

How odd that Alan W has reopened this discussion 3 months after it ended. While I understand the sentiment, we can't fully appreciate Mr Preston's situation because the article fails to explain how he got coverage. Did he take a job at a company with group health insurance where all employees are eligible without regard to pre-existing conditions? Did he take out a private policy with the insurance company accepting him as a customer at their own peril? That's an option that's hard to believe. Did he pay a rider for a pre-existing condition? Or did he grow old enough to qualify for Medicare? We may never know. What we do know is that very few doctors would welcome a single payer system because it is the equivalent of becoming a government employee without any of the benefits of paid holidays, vacations and/or pensions! In other words, "All the bad without any of the good!" If that were to happen, I predict that so many doctors would retire early that it would force American healthcare into a tailspin! And just when soooo many citizens (Baby Boomers) are about to enter their twlight (read less healthy) years! It's common knowledge that the health of Senior Citizens decline as they age. Gutting the best healthcare system in the world just before this completely predictable strain is placed on the system would be incredibly unwise and short sited. Best thing to do first is encourage the purchase of insurance across state lines. My family left an insurer in Florida because they had underwritten so many Senior Citizens and so few younger, healthier patients, that our rates were three times the cost of what BCBS was able to offer us! Just because we were with a small company with few clients in Florida to spread the risk across! Allow folks to shop across statelines before something as drastic as a single payer. Many doctors are already saying the risk benefit ratio is already impossibly strained. Let's don't put the final nail in the coffin just yet!

Your November "Price Check" article has bothered me ever since my first read. 61-year old Rick Preston is certainly a poster child candidate for what's wrong with the domestic health care system. He carried no health insurance until faced with major cardiac surgery and then somehow found a health care insurer who, without regard to a preexisting medical condition calling for major surgery, would allow him jump aboard just days before his surgery? Preston is quoted as saying that (since being insured) he has no concerns about the bottom line costs of his surgery. Based on how Preston dealt with health insurance before his diagnosis, I think that we can assume that since his surgery, he has stopped paying his premiums. Based on horror stories like these, is it any wonder why health insurance is as expensive as it is? I can't think of a more powerful argument for a single-payer, government managed health care system.

Your November "Price Check" article has bothered me ever since my first read. 61-year old Rick Preston is certainly a poster child candidate for what's wrong with the domestic health care system. He carried no health insurance until faced with major cardiac surgery and then somehow found a health care insurer who, without regard to a preexisting medical condition calling for major surgery, would allow him jump aboard just days before his surgery? Preston is quoted as saying that (since being insured) he has no concerns about the bottom line costs of his surgery. Based on how Preston dealt with health insurance before his diagnosis, I think that we can assume that since his surgery, he has stopped paying his premiums. Based on horror stories like these, is it any wonder why health insurance is as expensive as it is? I can't think of a more powerful argument for a single-payer, government managed health care system.

Your November "Price Check" article has bothered me ever since my first read. 61-year old Rick Preston is certainly a poster child candidate for what's wrong with the domestic health care system. He carried no health insurance until faced with major cardiac surgery and then somehow found a health care insurer who, without regard to a preexisting medical condition calling for major surgery, would allow him jump aboard just days before his surgery? Preston is quoted as saying that (since being insured) he has no concerns about the bottom line costs of his surgery. Based on how Preston dealt with health insurance before his diagnosis, I think that we can assume that since his surgery, he has stopped paying his premiums. Based on horror stories like these, is it any wonder why health insurance is as expensive as it is? I can't think of a more powerful argument for a single-payer, government managed health care system.

A year ago I tried to obtain the pricing of a prescribed medical procedure. I could use several facilities, and as it was the end of the year and open season, I considered changing insurers to obtain the cost. No facility could give me an actual price, I was told that I would have to have the procedure and be billed to find out the cost. That made sense (NOT). So, then I called my insurer at the time as well as one I was considering changing to, and each of them said that the price would depend on the facility and they did not have one single price they paid for this procedure (it would depend on the facility). My outrage cannot be politely expressed. While of course it is a great concept to know the cost of a procedure, and I exerted much effort to do just that, I have found (with this experience and others) that it is simply not possible to do so. Until these practices of insurers and providers are outlawed, we are all pawns of the current insurance practices and forced to pay prices which will not be revealed to us until after the fact.

Doctors are basically good people but they are like everyone else, in business. So shopping around is crucial. Ratings like those on Angies List are rare, which makes them all the more important. I agree with those who comment on dentists. I have had drastically different costs with different dentists, and even had some fees charged for services I supposedly received but did not know I was getting (e.g., "Oral Cancer Screening" which the dentist did without telling me and then charged me $35 for it!). I refuse to pay for what I am not told in advance for a dentist, unless it's truly emergency service: in an emergency I don't expect a physician or a dentist to be able to predict costs.

Would be more useful if it gave some table information on costs at various locations by procedure, and provider.

Great article and comment stream. The fact is that many doctors are willing to come to the negotiating table. New online systems are enabling this. Angie's list is great for finding ratings and quality data about doctors is readily available. Sites like HealthcareBlueBook.com enable us to determine a fair price. Finally, new sites like FairCareMD.com let you get the care you need in seconds. Yes, you need to do something more than just look in a book, but at least on our site I can tell you that you will save over 35% on average. Doctors get paid better too and don't have to fight the insurance company to be paid a pittance to "care" for you. For those of you who have had to shop for care like I did a few years ago you know it is not easy. That is why we made this system. We hope you like it!

Yes, Kelly, not only the many years of schooling and practical for doctors, but they have to pay back outrageous sums of student loan money, also. And because of insurance allowable charges, I have always wondered how a physician ever pays this loan back. Doctors have paid their dues to do what they do, so I do not begrudge them the charges they make. However, I do have to say that dentists have become out of control, and most people have inadequate dental coverage or qualified dentists to even be allowed to go to by dental insurance companies. I cannot afford to go to the dentist; every checkup and cleaning seems to cost me a lot because they always seem to find something wrong, and I take good care of my teeth. I don't know why there is always something wrong!

yes it would good to know up front cost

I can understand why dentists would object. They've gone way over the top with no one to set limits for them.

I completely agree with Kelly H. A physician can charge a million dollars for removing a splinter, but will only be paid what the negotiated amount is with the insurance company. This is why consumer driven health care is a complete misnomer. For example, say you need a procedure and call Dr. A to find out his/her charge and you find that he/she charges $100 for that procedure. Then, you call Dr. B who charges $80 for the procedure. But Dr. A is paid $50 for that procedure while Dr. B is paid $70. If you chose the "cheaper" doctor you have actually paid more for the procedure. The catch twenty-two in this whole equation is that insurance companies are not allowed to disclose what they pay to physicians because of Stark Law which was designed to prevent price fixing as Kelly mentioned. Another factor that should be evaluated is what are the outcomes for each physician? If Dr. B has traditionally worse outcomes, you may have to go back for another visit. Hence costing you, the patient more in charges.

It is important to check ahead of time to shop for the most inexpensive health provider like your life depends on it

I really love the quote from the Dentist "It (cost) should be about sixth on the list of deciding factors." Trying to get reliable information for the other five factors (?) on the doctors participating in my insurance plan is about as easy as getting the costs. Angie's list is a start but it is still a very tedious process at best.

True, Lee - nobody expects to win the lottery by suing a plumber for unexpected complications on a shower renovation. Nor is a plumber required to go to school for a minimum of 9 years before taking the first paying customer. A General Surgeon studies 13 years before taking his first job. During the last 5 years of that training, residents earn less than minimum wage. Apples and Oranges, for sure.

I have to agree with Kelly H.'s comments. Doctor's are not the evil money grubbers that people always try to make them out to be. As for being compared to a plumber; a plumber is not going to be sued for a client dying! Apples and oranges.

If you are having surgery, you need to know all the providers so you can find out if they are contracted with your insurance. Even something as simple as a colonoscopy can have a surgeon, an anesthesiologist, an OR and a lab, and they usually don't tell you upfront that all of them bill separately. I've found out the hard way you need to ask about ALL of these and it may be hard to find a doctor you trust who uses a contracted OR with contracted anesthesia and lab. It's not like you get to choose those things.

Mandym, Pharm and Medical are NOT your local private practice physician! Most doctors are in private practice and are small business owners, not part of some giant lobyist system. Kindly, don't lump them in with the lobbyist lot. While we're at it, the AMA does Not represent American doctors by any stretch of the imagination! They have a paultry percentage of physician's as members, less than 20% last I heard. Your local doctor doesn't deserve this kind of wrath. However, if he does treat you or your loved ones disrespectfully, don't label all doctors as a result.

Thank God I've never been to a doctor that didn't value me as a customer. Nor have I seen a doctor use a God Like demeanor with me or any other patient for that matter. Gosh George, where do you live that many doctors act that way? It sounds like you need to find better doctors.

I love George’s comments. The biggest lobbyists in Washington are pharmaceutical and medical industries. Is it possible all laws that have been passed have something to do with the profit of these corporations - and not too much to do with our health?

Also, if your doctor is a participating provider for your insurance company, it doesn't matter what he charges, only the negotiated fee that matters! That means your 20% responsibility is taken on the allowable charge not the billed charge, same for deductibles. This article is quite misleading.

Yes, Claude! As I understand it, it's actually a Federal Anti Racketeering law to prevent price fixing. This article seems to be yet another attempt to paint doctors as evil. Unfortunately, the government also has laws which allow them to sue a physician for insurance fraud if they provide discounts to non Medicare/Medicaid patients. Perfect examples of unintended consequences of poorly drafted legislation! God Save Us!

Physicians fear being compared to plumbers, carpenters and other skilled labor -- and for good reason! Many of them rely on a God Like stature and superior demeanor in order to intimidate their customers into following their orders without question. A good physician, like a good plumber, provides his customers with adequate information and choices as well as providing quality service at reasonable prices. Physcians greatly fear being placed into that scenario where they actually have to treat their patients as valued customers. the same could also be said for outpatient facilities such as blood labs and such.

Are there not laws in some states essentially forbidding physicians from discussing their fee?

I somewhat disagree with KellyH. One reason seniors' health declines is poor life choices and dependence on prescription drugs. I'm 72 and take NO medications. Anyone starting one med will likely be taking a dozen more. One med requires another for symptoms the first one causes. It's a vicious cycle; I've seen it in too many times.

This article was not helpful, although it had common sense suggestions, the health care system is too complicated for simple "shopping around". How about a checklist of questions to ask so that a person knows how to get an apples-to-apples comparison? A list of commmon vocabulary to use to get complete information would be helpful; otherwise I still won't be sure that I have good information.

Yesterday, came from a follow-up from a specialist who did not deal in the relevant details. Got out of her Board Certification. This has happened to me many times Dr. get paid for doing no work.

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