Faced with high deductibles and ever mounting hospital costs, patients are being forced to behave like shoppers and negotiate the price of services:
Amy Freedman's 16-year-old daughter was having a major flare-up of Crohn's disease and needed a CAT scan, read by a radiologist with pediatric expertise, to see if emergency surgery was called for. She got it quickly at St. Christopher's Hospital for Children.
The bill came to $14,359. Aetna paid the in-network hospital its negotiated rates, which totaled $9,645. Freedman's coinsurance was $846.
"Because I was a doctor," said Freedman, who works for a drug company, "I knew immediately that number was outrageous."
Hospital mergers are leading to increased health costs, as monopolies are leveraged through secret pricing deals:
Sutter’s price for the knee scan was $1,271, payable by Logsdon and his insurer. Exactly the same MRI at one of the local imaging centers owned by Radiological Associates of Sacramento would have cost $696 -- 45 percent less.
It turns out that Logsdon didn’t know something that his insurance company does: Sutter Health Co., the nonprofit that owns Sutter Davis, has market power that commands prices 40 to 70 percent higher than its rivals per typical procedure -- and pacts with insurers that keep those prices secret.
Sutter can charge these prices because it has acquired more than a third of the market in the San Francisco-to-Sacramento region through more than 20 hospital takeovers in the last 30 years, according to executives of Aetna Inc., Health Net Inc. and Blue Shield of California, who asked not to be named because their agreements with Sutter ban disclosure of prices.
Rising costs of medical tests
such as imaging compound the financial pain of
overpriced drugs which often come with
worrisome side effects that can lead to
additional visits.
Some states are attempting to repeal certificate of need laws that prevent new entrants into the hospital market, while others target false price reports of drug companies as medical bills continue to be the leading cause of bankruptcy.
Individuals are often charged higher prices than insurance companies who hold greater bargaining leverage. However, choices remain to reduce cost. Chronically ill patients may consider care at home. Those needing surgery may look at outpatient services. Medical tests can be cheaper at independent labs. For drugs, go generic. Before accepting treatment, ask about prices or even use comparison tools.
How do I ask about price?
To get over the fear of asking, prepare in advance.
- Know specifics: Write down the exact name of what you will be inquiring about. Also ask your doctor to provide billing codes, known as CPT (for doctor's office visits) and DRG (for hospital treatment).
- Find out what others charge: Call around. Web tools, while far from perfect, offer examples.
- Call the office: Ask for the person who can discuss pricing (generally not the doctor).
- Insurance: If you have it, tell them your company and plan. If you don't, ask for a self-pay discount.
- Be thorough: Ask for all components of care; for surgery, that would include at least the surgeon, hospital, and anesthesia. Ask if there is more.
- Get documentation: You may want to get the price in writing, or via an e-mail that you can print out.
- If it is after the fact: Unexpected sticker shock can still be addressed. Try to get the bill reduced following some of the above steps. If you can't afford it, say so. If they say no, ask for a higher-level manager.
An alternative option if surgery is needed is to go overseas, where medical equipment can be 25 times cheaper with procedures going for 80% less,