Today I contacted my health insurer to go over some policy changes they notified me by mail about for the upcoming year. After they answered my policy questions, I took this opportunity to ask them my standard question, “as a member of your health plan, how do I find out what my specific out-of-pocket costs are– before visiting a provider?”

Here is what I learned. This type of information is called a FORMAL PRICING REQUEST and consumers (health plan members) must obtain specific information from the provider and follow the outlined procedures below. Contact your provider’s office and find out:

1. Provider’s NPI #
2. The specific diagnosis code(s) for the procedures that will be provided (ICD-9)
3. The specific CPT code(s) for the services that will be provided
4. The amount the provider charges for these services
5. The location (place) of service. This could be lab, outpatient facility, office, hospital)

After the member has all this information from the provider, the member should contact the health plan’s benefits/claims department and be ready to answer all these questions. Within 48-72 hours after the request is made, the insurer will provide the member with a letter identifying the member’s out-of-pocket costs for the services. As a convenience, the insurance plan has offered to read the letter over the phone, rather than mail it out to the member. Contact the Benefits/claims department.

Happy New Year!

NPR ran an interesting story in November 2009 on price disparities in our health care system.

When it comes to our health care system, the basic economic rules do not apply. Prices for identical goods and services are usually the same or very close at competing businesses. That's not the case when it comes to health care — not by a long shot. In Pensacola, Florida there are huge price disparities for MRI tests. It's not a matter of greed or poor decision-making by MRI providers or a lack of consumer awareness.  For better or worse, it's the way our insurance-based health care system works.  Read the full story.

The Wall Street Journal published a story this week on websites to help patients shop for medical services.  The article mentions Outofpocket.com and lists 17 other tools/websites consumers can use to research prices.

Read the complete story, “Lifting the Veil on Pricing for Health Care” by Anna Wilde Mathews.

It's not necessary to get on a plane to India to take advantage of the savings that medical tourism can provide. Patients can realize savings of 25-70% or more just by shopping around via the Internet. Yes a road trip might be necessary, but isn't it worth your time to drive 50 or even 200 miles to save $1000 or more? Maybe the wrong people are reading this, but unless you make over $250,000 per year; a day of work doesn't pay $1000. Saving $1000 on high end diagnostics or an operative procedure is easy.

First you need the tools to find the real price; the price that you will actually pay, not what a provider charges. Insurance companies and providers have a contractual relationship that disallows most providers from sharing negotiated discounts. If you don't have insurance the process is easier, but either way, you'll need to do your share of the research. The best place to start is the Internet.

Websites like outofpocket.com or your insurance company's site are the best places to start. They'll provide local prices for common procedures. If you don't like what you find there, then use search engines to look for the service you need based on price. Questions like "How much does an MRI cost?" will likely yield the results you need. I mention MRIs because it's something I know a great deal about. I own/run an MRI clinic that offers any MRI for a flat rate of $600 to every patient regardless of how they pay, insurance or not.

We have patients travel from out of our area on a regular basis. Recently we had a patient drive all the way from Minneapolis (We're located in Milwaukee). She reports to have saved almost $2500 for her trouble. In the past, patients have flown in from Texas, Colorado and Canada. American patients said that they were able to fly into Milwaukee, rent a car, stay in a hotel, go out for a great meal, and still have money left in their pockets from the savings. Canadian patients were happy to pay the $600 to have their scan months before they would have in Canada. The one thing that all of these patient/consumers have in common is that they found us on the Internet.

MRIs are just one example of a medical product where shopping around can save thousands. Nearly every medical procedure has an enormous range in price. Research is the key to savings, and the Internet makes shopping over a larger geographic area feasible. One word of warning, be certain to confirm any price you find on the Internet for any medical product or procedure, and be certain to verify quality before you travel anywhere (even across the street) in an effort to save money. Low quality medical services are not a value at any price.

Don't forget to buy me a T-shirt if/when you do decide to take advantage of medical tourism, my favorite is the old standby- "My friend went to Milwaukee and all I got was this lousy T-shirt" The savings will be all yours!

-- Contributed by Eric Haberichter

Eric Haberichter is co-founder of Smart Choice MRI, an outpatient health care facility that specializes in MRI services.  Eric is passionate about quality and value in healthcare.  He enjoys spending time with his family, practicing martial arts and enjoying the outdoors.  Be sure to check out Eric’s new blog, The Debunker- Truth in Healthcare. 

If you need to have a non-emergency MRI and live within driving distance of Milwaukee, Wisconsin, be sure to contact Eric at Smart Choice MRI.  His outpatient facility will only charge you $600 for your MRI, regardless of who is paying the bill.

 

Ed Bennet, a hospital web manager, has developed a public hospital search tool using the Google Custom Search engine.  The search tool allows you to search more than 2800 hospital websites in a single search query.  The hospital websites included in the search results, provide much more information than just prices for services.  This tool this can be useful to find/access hospital price data that is hard to find using the standard Google search engine, and elminiates the need to individually search each hospital.  

For example, using his hospital search engine, if you type in:

 

MRI price (results returned = 86)

price x-ray  (results returned = 197)

emergency room price (results returned = 91)

 

Unfortunately, most hospitals publish their “list price” for services, rather than the true out-of-pocket price for their services.  The list price often has nothing to do with the actual price you are expected to pay for services.  If you pay cash and are uninsured, you should expect (and demand) that you receive a discount from the list price so make sure you inquire about a discounted price.  If you are insured, you will pay a lower, contracted rate that your insurer has negotiated with the hospital provider.

 

 

I spent two years demystifying my emergency room bill only to uncover that I was being gouged for 800% profit by the hospital.  During that time, I learned how to calculate fair and reasonable prices, as determined by the industry standards.

Here’s what I learned:  the two most blatant culprits of the overcharges were due to Secret Prices and Coding Errors/use of an Internal Coding System…I’m sure that’s no surprise for OutOfPocket Blog readers.

A little background

It was suggested that I go to the Emergency Room by my doctor who had prescribed a course of oral antibiotics for an infection. I then came down with a stomach virus and was unable to keep down the medication.  My infection progressed, so my doctor instructed me to go to the ER for IV antibiotics.  I went, received excellent care, stabilized within six hours, went home and had a full recovery.

Then I received my first billing statement.  Those antibiotics and basic blood tests cost $7,051.  Then my PPO policy negotiated it down to $3,525, with no explanation.  These prices seemed so arbitrary to me, I just wanted to know they were fair and reasonable, as determined by industry standards. 

By working with a patient advocate at Southwest Bill Review, I learned that up to 90% of all hospital bills are coded incorrectly.  My patient advocate told me that there is supposed to be transparency in the billing system – and that there are definitive coding guidelines that apply to each hospital.  However, this hospital administers their own coding system – making it impossible to determine exactly what is being charged.    I learned that this is very common.

I then developed a 10-step-process to hospital negotiation. My hope is that this information will help people navigate through the current medical billing system.

The 10-step-process can be found at my blog, Hospital Overcharges 101. Also be sure to check out the Youtube video of my experience.

Free Medical Cost Savings Tips For All

I can be followed on Twitter at: MedOvercharg101 and the Facebook Fan Page, Medical Overcharges 101 – when the 140 characters on Twitter just isn’t enough. 

--By Lynn Jordan

Lynn Jordan is an award winning freelance producer and writer having worked in the television and live event production industries.  This is her first time with the hospital billing system and her hope is that what she has learned will help other people confront their medical bills.

 

Jeffrey Seguritan is a twenty-something, enthusiast, blogger and critical mind in all things health care.  It’s refreshing to hear Jeff’s opinions and thoughts on our health care system.  We so often hear the opinions and stories of elderly Americans and middle aged adults, but here’s the voice of a bright, 25-year old writing about our dysfunctional health care system.   His recent blog post, “Healthcare prices – where’s the sticker shock?” discusses the lack of transparency in our healthcare system.  

I look forward to reading more of Jeffrey’s posts on the Nuts for Healthcare blog.

Minnesota residents have a new tool to help them comparison shop for health care services. Last week, the state of Minnesota launched the Cost Report tool on the Minnesota HealthScores website.  This new tool allows residents to compare prices for health care services and shows the lowest provider cost for a procedure, the highest provider cost, and the average cost per medical group for 103 common medical procedures from 110 providers across the state. This project was a collaborative effort with state health providers collecting the data from health insurance companies.

America's Health Insurance Plans (AHIP) just published a report that identifies physician out-of-network charges for 30 states.  The report provides a state-by-state snapshot of excessive charges billed by out-of-network physicians, and compares these charges to what Medicare would have paid for these exact same services.  This report demonstrates huge disparities in the cost of various medical services that were in some cases tenfold higher than Medicare reimbursements for the same service in the same area.

 

Here are some examples from the report, of the price disparities for common procedures. 

 

·         A patient in Illinois was charged $12,712 for cataract surgery.  Medicare pays $675 for the exact same procedure. 

·         In California, a patient was charged $20,120 for a knee operation that Medicare only pays $584 for. 

·         A New Jersey patient was charged $72,000 for a spinal fusion procedure that Medicare covers for only $1,629. 

 

What is obviously missing from this report is the insurer’s average contracted price for in-network providers. Wouldn’t it be remarkable to see how prices compare for a specific service side-by-side including: 

·         List price (the inflated charges)

·         Negotiated price (discounted price contracted with in-network providers)

·         Government CMS Medicare price (lowest contracted price)

 

Comparing provider health care prices across different health insurance plans for the exact same service is what we are trying to accomplish with the OutofPocket.com directory.  If you want to look up some of these prices, be sure to check out our directory. 

 

The best advice I can share with consumers regarding these “inflated” out of network prices – is to make sure you do your research.  If you are uninsured, or if you are insured looking for an out-of-network provider, make sure you don’t pay the inflated charges.  Instead you should do your research, understand what the “fair” contracted rates are for this service and know what Medicare reimburses for this service in your area.  Then you can confidently ask the provider for a discounted price.  On average, Medicare pays about 80 percent of what private insurers pay for the exact same service.  If you want to look-up what Medicare pays for specific services -- use the AMA CPT online tool.  If you want to find out what the average insurer reimburse for specific services --- use Healthcarebluebook’s tool.

 

If you are still confused, feel free to contact me and I’d be happy to walk you through these steps to help you become a more informed consumer.

 

Be sure to read the article that appeared in The New York Times, Survey Finds High Fees Common in Medicare Care that discusses this AHIP report data.

 

 

New hope for damaged knees.  After more than twenty years of competitive running, the cartilage on my knee was destroyed and I could no longer run.  My determination to run again and to continue being active for many more years to come led me to Dr. Brian Cole, head of the Cartilage Restoration Center at Rush University Medical Center.  Dr. Cole has been performing the osteochondral allograft transplant procedure on athletes for 12 years and his outcomes are very successful.   This type of procedure offers an alternative to total joint replacement and enables patients to maintain an active life 12 months after the surgery.

 

In November 2008, a donor match was identified and I had elective knee surgery to repair my damaged cartilage.  Prior to the surgery, this procedure was preapproved by my health insurance plan and I was fortunate enough to have very good insurance to help cover most of the costs of this expensive procedure.  I have a high deductible health plan, along with a health savings account so I am required to pay $5,000 out-of-pocket before my insurance kicks in.  I knew this much going into surgery, but had no idea what my specific out-of-pocket costs were going to be after the surgery. 

 

During my preparation for surgery and my long rehab following surgery, I maintained a list of all my out of pocket expenses related to this procedure.   Below is a breakdown of these expenses including the provider’s list price, insurance plan’s contracted price, and my out-of-pocket expense.

 

(1)    Total LIST price                                           $ 71,138.21

(2)    Total INSURANCE CONTRACTED price      $ 20,187.03

(3)    My total OUT-OF-POCKET expenses          $  7,093.87

 

Item	List Price	Insurance Contracted Price	My Outofpocket Price	Notes
Office Visit	$162.00	$70.00	$70.00	Dr. referred me to specialist
X-rays	$136.00	$50.00	$50.00	x-rays to diagnosis injury
MRI knee	$1,116.00	$706.00	$706.00	MRI to diagnosis injury
Office Visit - specialist	$198.00	$116.00	$116.00	Office visit w/specialist
Office Visit - specialit	$109.00	$70.00	$70.00	follow-up office visit
X-rays	$153.00	$50.00	$50.00	diagnostic x-rays
Blood/urine lab tests	$193.78	$50.00	$50.00	blood tests for pre-surgery
X-rays	$125.00	$39.00	$39.00	x-rays post surgery
Surgery anesthesia	$1,440.00	$576.00	$576.00	anesthesia for surgery
Surgery Physician's fee	$22,676.06	$3,221.50	$1,845.00	partial applied to my deductible
Surgery Surgical Assistants	$5,668.00	$547.65	$109.51	paid 20% of contract price (met deductible)
Surgery Facility Fees	$32,444.37	$11,160.88	$2,232.16	paid 20% of contract price (met deductible)
DME - Knee Brace	$897.00	$603.00	$118.80	paid 20% of contract price (met deductible)
DME - CPM machine	$3,225.00	$972.00	$194.40	paid 20% of contract price (met deductible)
DME - Ice, Compression Unit	$595.00	$595.00	$595.00	not covered under insurance plan
Physical therapy (10 sessions)	$2,000.00	$1,360.00	$272.00	paid 20% of contract price (met deductible)
TOTALs	$71,138.21	$20,187.03	$7,093.87

For many of us, the most unbearable part of going to the doctor is when the series of “post-visit” EOBs, bills, statements and paperwork start to arrive in the mail.  Wouldn’t it be nice to know your out-of-pocket costs BEFORE you visit a health care provider? 

In order for consumers to make informed choices, we need tools that provide accurate price and quality information.  Unfortunately, our current health care system lacks transparency and waiting around for health insurers or health care providers to solve this problem could take a long time.  In the meantime, we are starting to see some new tools that consumers can use to look-up price estimates for health care services and get an idea of a fair price for service.  The tools are not perfect, but it’s better than not knowing at all how much things cost.  In fact, whether you are insured or uninsured, it would be helpful to know up front what your out-of-pocket expenses will be --- before you visit the doctor!

 

So the next time you need to have an MRI, x-ray, mammogram, CT scan, colonoscopy, dental exam, eye exam, lab test or office visit, ---be sure to take a few minutes to visit some of these free websites so you have a better idea of fair prices for specific services.  You might even be able to use this information to negotiate a discount with your health care provider.

 

Tools to look-up prices for health care services

 

Healthcare Blue Book

Leslie’s List

MainStreetMedica

NewChoice Health

OutofPocket

Spectrum Health

USA HealthCare Costs

Vimo

 

An article in CNNMoney, Biggest Medical Mystery: The Bill, discusses obstacles and price transparency.

 

If you are a savvy consumer you probably review all the bills you receive before you pay them, to make sure they are accurate. This is a really good habit. Have you ever received a bill that was not yours, or a credit card statement with charges that are not yours, or the wrong discount/sale price taken off your retail purchase, or cell phone charges that you should not have been billed for? This happens to consumers all the time. Human errors, billing errors, software updates – there are lots of reasons these errors occur. Whenever you receive a bill for health care services, utilities, charge card statements, electronic purchases and sometimes even groceries – you should take a minute to review the bill for accuracy. When you purchase an item on sale, or use a coupon, don’t you always look at your receipt to make sure you were charged the right amount? This same "double checking" rule applies to medical services. When you receive a bill (or statement) from a provider or an EOB from your insurer, take a minute to review the information to make sure it is accurate. If you have a health insurance policy that covers screenings, office visits and lab tests, make sure you are not being billed for these services.

You also need to review your health plan coverage very carefully so you know exactly (1) what services (exams and lab tests) are covered at 100%; (2) what services you will be billed for; and (3) what percentage you are expected to pay for these services. Some employer health plans are starting to cover 100% of the full cost of routine exams and preventive services (such as physicals, colonoscopies and mammograms) to help employees stay healthy. This can be a great benefit, but if you’re not careful, you might erroneously get billed for these services. Patients are sometimes billed for preventive screening exams that their health plans cover at 100% because of errors in billing/coding at the doctor’s office. Patients can unknowingly receive care that their health plans don’t consider preventative.

Always review your bills for errors. An article in the Healthy Consumer in last week’s Wall Street Journal discusses why patients may be billed for free exams.

If you have major medical bills and need assistance in making sense of these bills, there are a number of bill review services available that will provide you with advice.  Some of these organizations provide assistance before services are provided, others help review medical bills after the services were provided, to determine if you were overcharged.

 

Here are some resources that can help you make sense of your bills.  Keep in mind that some of these organizations offer help -- for a fee.

 

Claims Assistance Professionals

HealthCare mediation LLC

Health Proponent

Health Champion

Hospital Bill Review

ICS Healthcare (Ingenix)

Medical Cost Advocate

INSNet

Patient Advocate Foundation

Patientcare

 

 

To shed some light on health care prices, Anna Wilde Mathews wrote an interesting article in last week’s Wall Street Journal about how much it costs to have a baby.  She researched prices at hospitals in advance and broke down the different expenses she incurred after her baby was delivered.   She certainly takes the mystery out of how much it can cost to deliver a baby as she reviews some of the itemized costs that appeared on her invoice from the hospital.

 

If you are expecting a baby and have the opportunity to research prices in advance, take her advice and do your homework to eliminate the guesswork on how much out of pocket expenses you will be responsible for.  Here are some interesting charges from her report:

 

ITEM	CHARGE
Total delivery charge for three days in the hospital	$ 36,625
Aetna’s negotiated (discounted)  total	$ 17,300
2006 average nationwide negotiated total	$   6,898

 

Miscellaneous items and charges on the hospital bill:

 

ITEM	CHARGE
Epidural anesthetic injection	$    530
Hospital’s resources for providing the epidural	$ 2,152
Anesthesiologist’s fee	$ 1,530
90 minutes in recovery after delivery	$ 2,382

 

Your actual costs will be based on your deductibles, co-pays co-insurance, the new baby’s deductible, out-of-pocket maximum and the specific services provided by the hospital.

 

Thank you Anna for sharing this information with other consumers!  If you have some interesting prices to share with consumers, please add them to the OutofPocket.com directory by clicking here.

 

COPAYs, co-insurance, deductibles, list price, discounted price, contracted rate, negotiated price, cash price.  Do you know in advance what amount you will be charged for health care services?

If you have health insurance, your health plan has negotiated discounted rates with each of your providers in the health plans network.   These discounted rates are called “contracted rates.”  When you visit a provider in the network, and show them your insurance card, they will charge you (or your health plan) the contracted rate for services.  The “list price” for services is reserved for people without insurance, and without a doubt, is an inflated price.   The Medicare rate for services is the rate the Government has negotiated for services under the Medicare plan.  Medicare is the lowest rate for services and often does not cover the provider’s true cost of delivering the services.   If you do not have health insurance, be careful because providers will charge you the “list price” for their services.  This list price is an inflated price, and if you pay cash, you should expect to receive a discounted rate, but remember ---you have to ask for it.  Everything is negotiable – including your health care bills.  It varies from provider to provider, but I have seen cash-pay discounts that range from 20% to 60% off the list price!

 

Bargaining down those medical bills

 

I conducted an experiment to find out if it was more cost effective for me to pay cash for visiting a provider, or to pay the contracted rate my insurance plan has negotiated for services.   To give you some background, I have a high-deductible health plan and this looks like a very healthy year for my family so I doubt we will come close to meeting our deductible this year.  In other words, we will most likely pay for all our health care expenses out-of-pocket.  Our high-deductible health plan is really a good deal for us because we save about $8,000 a year on less expensive premiums for this type of plan.  So if I spend less on health care out-of-pocket expenses throughout the year by being a cost-conscious consumer, I have more money in my pocket to spend on other things like vacations and get-away weekends.   That’s a topic for another day.

 

Last week I visited a specialist for a follow-up office visit. No tests.  No equipment. No supplies were used.  Just a follow-up consultation.  When I checked in for my appointment, I inquired about paying cash for my doctor visit rather than have the office staff bill my insurance plan for the service.  The office staff was very confused by my request.  They consulted with three office staff, including the billing manager, and concluded that I needed to wait until after the doctor visit to know what the price is.  This makes sense. They cannot give me an estimate for services until after I see the doctor so they know what level of office visit to charge me for.  After I saw the specialist, I went back to the front desk and asked them what today’s charges would be if I paid cash.  They looked up the CPT code for today’s visit and said, “the cash pay rate for today’s visit is $86.”  I know from earlier visits to this provider, that my insurance plan negotiates a contracted rate of $70.  The list price for this visit is $109.  So here’s what I learned:

• $109.20 is the list price for an office visit with this specialist 
• $ 70.00 is the contracted rate my insurance plan has negotiated with this provider
• $ 86.00 is the cash-pay price the provider charges if you do not have insurance

After all that, I decided to have this office visit processed through the regular insurance claims process, because it provided me with a larger discount. 

 

Conclusion

 

My health insurance plan has negotiated some terrific discounts with their network providers.  The best part is that I directly benefit from these discounted rates for services.  When I signed up for my health plan, this topic never came up with the insurance agent that sold me this plan.  These network discounts appear to be one of the strongest selling points for this high deductible health plan since I end up paying 100% of the negotiated price for these services (until I meet my deductible.)  If there was more transparency in our health care system, consumers would be able to look-up provider prices for services for specific health plans, and determine upfront what their out-of-pocket expenses would be.  In today’s health care system, this is impossible to know ahead of time.

 

Wondering why your medical bills are so high?  New Hampshire Public Radio’s health reporter, Elaine Grant, revealed some interesting information about hidden facility fees in an interview last week with New Hampshire State Senator Jackie Cilley, Joe Loring, Executive at St. Joseph Hospital and James Unland, President, The Health Capital Group.  Click here for the full transcript.

 

Let’s face it, health care has a lot of “secret pricing”, but state lawmakers are starting to tackle one of the best kept secrets in health care – facility fees.  These facility fees can add hundreds and even thousands of dollars to your medical bill.  Hospitals say the fees are essential to their bottom line, but critics point to these fees as a major contributor to the high cost of health care.   

 

When you are paying out-of-pocket costs for health care services, these prices can make a huge difference.  For consumers that are uninsured or that have high-deductible plans, knowing the difference between an independent practice lab or one owned by a hospital can save you hundreds and possibly thousands of dollars.  When consumers go to a hospital-owned practice or facility, their bill includes the cost of the hospital’s overhead – aka “facility fee.”  This explains why hospital outpatient services usually cost more than the exact same services offered by an independent  stand-alone facility.  For example, an independent diagnostic facility charges $65 for an x-ray, while the hospital charges more than $260 for the exact same service.  The average consumer has no idea these fees even exist.   In many cases, the facility fee is simply included in the total cost of the visit, making it impossible to see.  Many consumers are not even aware that the provider they’re visiting is owned by or affiliated with a hospital.   So be sure to call and ask before you make an appointment at a facility.

 

In 2006 facility fees made national headlines when patients brought two class action lawsuits against Seattle hospitals.  One of the patients had a five-minute procedure performed at a clinic owned by the University of Washington Medical Center and was billed more than $8000.  Nearly $7000 of this bill was for the facility fee.  The medical center settled the case and agreed to disclose its prices.   Interestingly, once the prices were made public, the hospital could no longer justify the unreasonably high prices so they discounted their fees by 40% for about 1400 outpatient procedures.  Here is a link to the hospital’s public prices.

 

Let this be a lesson for all:  you can save a lot of money by asking providers what a procedure will cost – beforehand. 

Over the past few years, I have researched most the price transparency tools that are available to consumers.  Some of these tools can be accessed only by members of health insurance plans.  Some tools require a subscription or fee to access the pricing report data.  There are many other free tools that enable consumers to look-up prices of health care services.

 

Here is a short list of free public tools that consumers can use to look-up price of health care services.  If you would like the list of URLs to access these tools, please send us an email info@outofpocket.com

• AMA CPT Online
• Carol
• Cost Helper
• DoctorPricing
• Healthcare Blue Book
• Health Pricer
• LesliesList.org
• MainStreetMedica
• MyHealthScore
• New Choice Health
• OutofPocket
• Spectrum Health
• State Hospital Websites
• USA Healthcare Costs
• Vimo

Healthcare Prices:  Looking Behind the Curtain is a new blog that you should follow. Jeffrey Rice, CEO, HealthCare Blue Book, covers healthcare transparency news and discusses issues that you will find interesting.  His recent post discusses the disparities in health care pricing and how paying more doesn’t always mean better quality.  The fact is that the price for an MRI can range from $500-$2500 in the same geographic area.  Let’s take a look at some of the real out-of-pocket savings when consumers choose a provider that charges $500 for an MRI, rather than the provider that charges $2500 for the exact same diagnostic test.

• An individual with a co-pay would save $100 out-of-pocket by selecting the $500 MRI , rather than using the $2500 provider
• An individual with a high-deductible would save $2000 by selecting the $500 MRI
• Employers that are self-insured would save ½ million dollars a year just on MRIs of the knee, if they encouraged employees to use the cost-effective provider that charges $500 for their MRI.
• Total dollar amount of claims would be reduced, and this could result in lower premiums
• Just imagine how much $$$$ insurers would save if consumers adopted cost-effective behavior 

One of the greatest challenges in getting people to use cost-effective providers is how do we encourage and enforce this cost-effective behavior?  One of the few unquestionable principles of economics is that people respond to incentives.  If you give people more of a reason to do something, they will do more of it.  If you make it easier to do more of something they are already inclined to do, they will also do more of it.  Reducing my out-of-pocket expenses is enough of a reason for me to select the provider that offers the best value. 

 

Many of you are struggling to make ends meet while your health care expenses continue to rise. If you are well informed and you do your homework, you might be able to reduce your medical expenses by following some simple tips. Just remember A-B-C-D.

Ask the provider upfront (before services are delivered) for a price break. Each provider has their own rules about negotiating bills, and you should always ask. Explain your circumstances and offer to pay cash at time of service or develop a payment plan.

Bill review. Be sure to review your medical bills for possible errors. I can’t tell you how many times I found small errors on my medical bills just by casually browsing through the detail. As soon as the bill arrives, read through all the line items and make sure that you are being charged the correct price and charged only for services you received. Medical billing errors occur all the time. Why pay more than you have to? I am assuming you already review many of your household bills (cell phone, utilities, cable, appliances, groceries, auto insurance) for accuracy. Treat your medical bills with the same level of scrutiny.

Compare prices using online tools. Insurers sometimes provide their members with tools to look up out-of-pocket costs for a specific plan. Other online tools are available to give you an idea of a fair or estimated price for a specific service. The more you know about fair pricing, the better price you will be able to negotiate. In addition to outofpocket.com be sure to check out healthcarebluebook.com, AMA CPT online, and costhelper.com to look up prices for services. For a more complete list of price tools, refer to the this list of price transparency tools. Remember also that where you go to receive care can also make a big difference in your costs. Emergency-room visits tend to cost $300 to $1000, compared with $150 at an urgent-care center, $65 to $75 at a doctor’s office, and $35 to $45 at a convenience-care clinic. For non-emergencies, it pays to call your insurer’s 24-hour advice hotline for guidance on where to go for care. Make sure the facility and provider are in your health plan’s network. In fact, don’t wait for an emergency to find the nearest ER or urgent care center in your network. Look it up now and keep this information handy so you can easily refer to it in case of an emergency, when it is often difficult to make cost effective decisions.

Discounts can make a big difference. You should make the most of discounts that are available to you from your insurer, dental/vision programs, prescription medications, and incentives from your employer. All these discounts help reduce your medical bills. Many insurers offer discounts on services to promote healthy lifestyles, including gym memberships, smoking-cessation and weight loss programs, chiropractic service and acupuncture. Ask your insurer or employer about these programs. Providers also offer discounts for paying in cash, or paying at time of service.

You’ve heard of the Kelly Blue Book, a trusted resource for looking up new and used car prices. Now there is a Blue Book of health care prices. A new website recently launched to help consumers look-up fair prices for health care services. The website, Healthcare Blue Book is an excellent resource to help consumers make informed choices. If you have ever wondered if you were being overcharged for health care services, or what a specific service might cost - this website can answer those questions. The health care Blue Book fair price is the cash price consumers should pay for a service or product at the time of treatment. It is the payment amount that many high quality health care providers accept from insurance companies as payment in full. Americans can’t control the economy, but they can do a much better job of educating themselves about what they should pay for health care.

Price variations for healthcare services, even within the same market and provider network, may be thousands of dollars. So knowing what the fair price is can help consumers better manage the cost of their health care. Unlike many other health care price tools, Healthcare Blue Book is very easy to use.  Type in the kind of healthcare service needed plus a zip code and the Healthcare Blue Book pulls up the fair price based on fees paid by Preferred Provider Organizations (PPO) to doctors for services in that market. Consumers can then use the suggested Healthcare Blue Book price to discuss prices for services and treatments with their doctors and other healthcare providers.

Americans do price/value comparisons for their homes, cars, vacations and the majority of goods and services they buy. “Why not healthcare?” asks Dr. Jeff Rice, Healthcarebluebook.com founder. The former CEO of CareSteps, Rice has a long history in the healthcare industry of developing innovative products for consumers.

“Patients should not assume that a high price means good quality,” says Rice. “It is up to patients to ask about the cost of services and to learn about the quality of their providers. Doctors and hospitals that charge a fair price, often provide the best value. Healthcarebluebook.com can help consumers figure out what they should pay.” Consumers need better education about the healthcare services they purchase and 2009 is a good year for them to start. Using the Healthcare Blue Book can help people learn how to obtain fair prices for their healthcare.

In addition to fair pricing, the website provides information on useful resources for patients including a list of websites by state that provide health care pricing.

You might have noticed that a lot of prices are missing from our OutofPocket.com directory.  OutofPocket is currently under construction and we appreciate your patience.  We are making some enhancements to the site and in this process; the majority of our price data is temporarily not searchable.  During the construction phase, what you will see when searching for prices on OutofPocket is a link to websites that publish health care prices.  Please be patient and check back in a few weeks.  In the meantime, I would like to encourage as many consumers as possible to post/share prices you paid for actual services, contact us about a great site to add to the directory or link to, or if you are a provider – send us your prices so we can include them in the directory.

Making Sense Out of Existing Data

Did you know that health care price data exists today --it's just not available to the public. I am passionate about bringing consumerism to health care, and dedicated to promoting price transparency.  My goal is to make sense of the existing price data to help consumers make informed choices. 

For CONSUMERS

• Hunting down true out-of-pocket expenses for health care services – in advance, can be frustrating.  Unless you are an experienced data minter, this type of hunting can be intimidating and time-consuming.  If you are uninsured, under-insured, looking for an out-of-network provider, or have a high-deductible health plan, you are probably trying to make cost-effective choices before purchasing health care services.  And you are probably interested in knowing your true out of pocket cost for the services BEFORE you visit the provider.    That’s just being a good consumer.  You need useful and relevant tools to help you make good choices.

For INSURERS

• You are the keeper of all the claims data for your members.  You know exactly the negotiated (contracted) price for every provider, for every service, for every different insurance plan you offer.  You also know how much of a member’s deductible has been met.  You have databases of prices paid for every service for every member and could make life a lot easier for your members and possibly change health care if you agreed to share this data to make it publically available.  Yet you insist on keeping this data a secret. 

For OUTOFPOCKET.COM

• I am inviting consumers to post/share prices they paid in the directory.   Everyone wants to look up prices, but very few are willing to take a minute to post/share their prices.  We could wait years for legislation to pass, insurers to agree to make prices public, or we could do something today.  Consumers are invited (and encouraged!) to collaborate and share prices they paid on OutofPocket.com.  If enough consumers participate and share prices, consumers collectively will create a very powerful directory of true out-of-pocket prices.

For PROVIDERS

• You have an opportunity to transform health care as we know it today.  You can help promote transparency by publishing your prices for services.   Why not let consumers know up front what your services will cost them?  OutofPocket.com invites you to include your prices/services in the directory - free of charge.  This not only promotes your practice, but also helps consumers understand what they will be required to pay for services at your facility.

Imagine how easy it would be to comparison shop for health care services if relevant data was available. If consumers had access to true healthcare price data, comparison shopping for health care services could be a lot like your experience shopping for a book on Amazon.com, booking a vacation on Travelocity.com or purchasing an item on eBay.com. 

Tell a friend about OutofPocket.com and be sure to add prices you paid for health care services to this directory.   Not only will you be sharing data, but you will be contributing to a powerful directory of prices that will help promote more affordable health care services.

Are these tools useful?

Doctor Review Websites

The November 28 edition of Slate.com included an interesting article by Dr. Kent Sepkowitz.  His article sheds some light on all the doctor rating websites available today.  Dr. Sepkowitz spent many hours reviewing doctor rating tools, including free sites and sites that require subscriptions or fees to obtain this information.  His conclusion:  the online doctor rating tools are very lean, content-free and lack any useful information. 

Last month I posted a blog about finding the best value (understanding the quality side of health care in addition to finding the best cost) and listed 25 different websites that offer doctor ratings.  I neglected to mention that I never use these doctor rating sites because they are not useful.   They lack meaningful data.  All of them.  Instead, I ask my doctors, family, friends, and community for their personal recommendations.  Then I go online and start to research the doctor’s certifications in more detail using many websites, tools and blogs to read other patient’s comments and experiences.  Since this is user generated content, you need to be able to read between the lines.  Sometimes people just have a bad day and they should skip writing reviews online until they have 24 hours to think about what they want to write and their mood stabilizes.

Price Transparency Tools

I am dedicated to promoting price transparency in health care.  This is what I do and that’s why I launched OutofPocket.com almost two years ago.  If I can help consumers make more informed and cost-effective choices before visiting a provider, then I have accomplished my mission.   When consumers start making more informed choices, become active participants in their own health care and demand greater transparency  --- good things result including lower costs, more innovation, more choices and improved access to medical care.
 
OutofPocket.com is not the only price transparency tool available.  Dozens of others are out there and I research all the new tools to evaluate their usefulness so I can talk about these tools in my next presentation.  Unfortunately, the price transparency tools seem to have the same disease as the doctor rating tools.  Each has some amount of data, but not enough to be meaningful and comprehensive.  Wouldn’t it be interesting if these tools collaborated and consolidated their data to produce a robust tool where shopping for routine health care servcies would be comparable to the experience of shopping for items using eBay or Amazon.com, where you can easily compare quality, prices and recommendations?

Here is the short list of 20 price transparency tools.  If you would like my comprehensive list and review of each tool, please send me a note and I’d be happy to forward this information to you.

Alijor
AMA CPT Lookup Tool
Carol
CostHelper
DoctorPricing
HealthcareBlueBook
HealthPricer
HospitalVictims
MainStreet Medica
MedcareCompare
MyHealthScore
MyMedical Costs
MyRegence
OutofPocket
PatientCare
RemakeHealth
Spectrum Health
UCompreHealthCare
USA Healthcare Costs
Vimo

Do you know how to find affordable lab tests?

 

Fortunately I have good health insurance.  Four years ago I signed up for a high-deductible health plan for my family in order to keep our premiums down.  My deductible is $5,200 and as a result, I am getting really good at shopping around for the best value, negotiating cash prices with providers, calling around to get prices and using available tools/resources to comparison shop/understand fair prices.  The more money I am able to save on finding affordable health care, the more money I have to spend on family vacations.  That’s enough incentive for me.

 

My health insurer has negotiated special deals (discounts) with providers in my network.   When I use these network providers, I am charged the discounted rate for services.  This carefully guarded rate is difficult to find out until after services are provided because health insurers keep negotiated prices a secret.  That’s why I encourage consumers to post/share rates they paid for actual services in OutofPocket.com directory, to share with other consumers.  If insurers and providers will not reveal these prices, consumers should!

 

I recently had a series of blood tests done that were required for my upcoming surgery.  I realized if I went to my doctors office to have these blood tests taken, my out-of-pocket costs would be much higher, so I selected a stand-alone lab testing facility that offers affordable lab tests.  I went online to find Quest Diagnostics and scheduled my appointment.  I just received my EOB and here’s what I discovered

 

Prices For My Lab Tests for Comprehensive Blood Test

Total Quest Labs billed to my insurance plan      $ 193.78

Total discounted by my insurance plan                 $ 143.78

Amount of my out-of-pocket for my lab tests         $   50.00

 

If I wasn’t careful, I could have easily ended up paying a lot more for my lab tests.  If I did not have insurance, I would have negotiated a cash discount with the lab when I scheduled the service, to make sure I get a fair price.  Because of my cost-effective choices, I saved about $144.

 

Here are some resources you can use to find affordable lab tests in your area.

 

www.PrivateMDLabs.com

www.MedLabUSA.com

www.DirectLabs.com

www.LabSafe.com

www.MyMedLab.com

www.QuestDiagnostics.com

 

 

A recent blog post on Health as Human Capital Foundation shares an interesting research summary on hidden health care prices. The research focuses on an employer that analyzed their employee health care costs and spending patterns for MRIs of the knee. They analyzed MRI costs from six local facilities in one metropolitan area and here’s what was identified:

• Amounts paid by the employers two health insurance companies for MRIs ranged from below $700 to more than $2,400
• Amount billed to the employer’s insurance companies (before discounts were applied) ranged from $1,100 to over $4,000
• Approximately 300 MRIs were done annually in this population. If employees were to choose the lowest-cost provider for an MRI instead of the highest-cost provider, it would save the employer about a half a million dollars per year for just one type of diagnostic procedure
• If an individual consumer shops around for the best price for an MRI, they can save themselves hundreds of dollars on this diagnostic test. If all employers/employees in one city shopped around for the best value, imagine how many hundreds of millions of dollars per year could be saved on health care costs just by choosing the lowest-cost providers?
• Why don’t employers simply require their employees go to the lowest-cost provider? The employees don’t know who the lowest-cost provider is. This information is not available. Health plans carefully guard ‘secret’ payment information because they have different negotiated prices with different providers. They don’t want one provider to discover that another provider is being reimbursed more for the exact same procedures. So when an employer chooses a health plan for its employees, the negotiated prices for services are already set. Services provided will be reimbursed at the plan’s negotiated amount (whatever that is).

Other interesting facts

• The rate of MRIs has tripled over the past ten years
• One-third of the MRIs provided are considered unnecessary
• MRIs generate significant revenue for health care facilities. Often there are financial incentives encouraging their use
• Studies indicate that radiology costs (includes x-rays, MRIs, CT scans) have risen faster than any other category of health care costs

Consumers --- do your homework and research prices BEFORE visiting a provider. Use available tools, make phone calls and compare prices and quality before you decide on a provider. You can save yourself hundreds, and possibly thousands of dollars annually.

Employers -- provide comparison shopping tools for your employees to use to help them make informed choices. Employers can also encourage and incent employees to make cost-effective choices. This not only reduces health care expenses for employees, but also reduces employer health care costs. A win-win situation.

If you have a health insurance deductible to satisfy, or if you are enrolled in a consumer driven healthcare plan, or if you have out-of-pocket costs that add up to more than $25/visit, I am sure you try to make the most of your health care dollars by finding low-cost providers that offer  the best value.  How do you find these low-cost providers?

 

Starting November 1^st, I am polling the community to find out how you search for health care prices.  I am interested in understanding how different consumers search for low-cost healthcare prices. What tools do you use to compare prices for health care services?  What “search terms” do you type in Google to find prices for health care services?

 

Let’s assume you visited your doctor and you need to have a non-emergency test or procedure performed.   How do you go about your search to compare prices for services like MRIs, x-rays, mammograms, vaccinations, lab tests, or a colonoscopy?  Do you ask your doctor for estimated prices?  Do you call the hospital or facility and ask for prices?  Do you ask your family, friends or neighbor to compare what they paid?  Do you call your health insurance hot-line for prices and recommendation on where to get the best value for this service?  Do you use Google to search?  If so, what search terms do you use? 

 

Send me an email to let me know what search terms you would use (or have used) to look-up and compare health care prices for specific services.   The first 1,000 people to respond will be entered in a drawing for a chance to win a $50 Amazon.com gift certificate.  Email entries will be accepted through November 30, 2008.

 

Here are the details to be included in the drawing for the $50 Amazon gift card.  Send an email to info@OutofPocket.com  and in your email message be sure to include:

 

(1)   What specific resources you would use (search engines, websites, online tools)

(2)   What search terms you would use to find prices for health care services

(3)   An email address where we can contact you, to notify you if you win the drawing

 

Good luck and thanks for sharing your search tips with us. 

 

Here's the scoop on the true price of an appendectomy.

If you are wondering what the true cost of an appendectomy is, keep reading....  Jaz-Michael King’s blog, A Scanner Brightly, provides the most thorough detail I have ever read on a patient’s charges for an appendectomy.  He wrote this blog earlier this year, and itemized the specific charges related to his appendectomy procedure.  A huge thank you to Jaz-Michael for sharing this detail with everyone to help us become better health care consumers.  I am glad everything turned out fine for Jaz-Michael and I would like to encourage him to keep up the great blog.  The data he shares is a wealth of information for consumers.

You definitely should read his blog entry, Hospital Bill: Appendix Ultimatum - it includes his comments and other useful information on the breakdown of costs for this procedure. 

 

Here are the itemized charges for an emergency appendectomy.

 

Appendectomy -- Itemized Charges	Charges	Actual Negotiated Price
Emergency Room:	$1,185.00	$419.68
Emergency Room Physician:	$1,461	$460.60
Cat Scan:	$2,015.00	$713.64
Operating Room:	$3,250.00	1,151.03
Surgeon:	$1,740.00	$626.81
Anesthetist:	$1,601.00	$787.50
Recovery Room:	$3,100.00	$1,097.91
Pathologist:	$35.00	$35.00
Semi-Private Ward:	$5,000.00	$1,770.81
X-Ray:	$127.00	$44.98
Per Diems:	$5,850.70	$5,850.70
Labs, Supplies, Medical Services	$1,627.04	$652.65
New York State Service Charge	$523.64	$523.64
Total Hospital Charges:	$22,718.70
Total Paid:	$12,078.38
The hospital visit was reimbursed at 53.2% of charges
Insurance: CIGNA

Are you shopping around for a CT scan but have no idea how much your out-of-pocket costs will be? You are not alone. A new type of CT scan, called “virtual colonoscopy”, offers a noninvasive and less expensive alternative than the traditional CAT scan.

A virtual colonoscopy test can cost anywhere from $500 to $1,500, depending on where you go to have the test done. Another reason to consider a virtual colonoscopy test – it is half the cost of a standard colonoscopy. Before you make any decisions, make sure you check with your insurance plan to see if the virtual test is covered for routine cancer screening.

Wall Street Journal published a story on CT Scans and included some price comparisons at different facilities. If you have insurance or are paying cash, make sure you talk with the billing department before you have the test done, to understand your out-of-pocket costs for your specific situation.

Hospital or Clinic	Location	Price
Invision Sally Jobe	Denver, CO	$800
Johns Hopkins Hospital	Baltimore, MD	$1,000
M.D. Anderson Cancer Center	Houston, TX	$1,500
Virginia Commonwealth University Medical Center	Richmond, VA	$750
Mayo Clinic	Rochester, NY Scottsdale, AZ	$1,400-$1,500
Ronald Regan UCLA Hospital	Los Angeles, CA	$505
University of Chicago Hospital	Chicago, Il	$1,153
University of Wisconsin Hospital	Madison, WI	$1,200
Beth Israel Deaconess Medical Center	Boston, MA	$1,017

Finding the best value for health care is not just about finding the lowest cost provider.  Value has everything to do with price and quality.  Today it’s very difficult for consumers to find useful and meaningful information on doctors.  To help you make informed health care choices, I’ve identified four online tools to help you do your homework ---before choosing a hospital or medical professional for your surgery, procedure or treatment.

 

Quality Check

 

This tool provides hospital performance reports with information by medical specialty. The Joint Commission on Accreditation of Healthcare Organizations (JCAHO) obtains information about accredited organizations not only through direct observations by its employees, but also through direct communications from those accredited organizations and from measurement companies hired by accredited organizations and accepted by The Joint Commission as sources for performance measure data. 

 

Hospital Compare

 

This Government online tool on the U.S. Department of Health & Human Services website provides information on how well hospitals care for patients with certain medical conditions or surgical procedures, and the results from a survey of patients about the quality of care patients received during a recent hospital stay.  This information can help you compare the quality of care hospitals provide. 

 

American Nurses Credentialing Center

 

This online directory is provided by the American Nurses Credentialing Center (ANC).  The directory identifies hospitals and health care organizations that are part of the Magnet Recognition Program, which identifies centers of nursing excellence.  This designation is considered to be the gold standard and many hospitals don’t make the cut.

 

Board Certified

 

This helpful online tool on the ABMS website allows you to confirm if your physician is board certified in his specialty.

 

Doctor Information

 

The Federation of State Medical Boards (FSMB) online tool provides professional information on physicians and physician assistances licensed in the U.S., and includes information on disciplinary sanctions, education , medical specialty, license history and locations. 

A recent visitor to OutofPocket.com contacted me because he couldn’t find prices for a specific procedure he was looking up in our directory. This is a great question and I want to share my response with others.

It’s important to understand that the OutofPocket.com directory is a collection of user generated content. Because insurance plans and providers are not willing to make their true prices public, we rely on consumers to post/share prices they paid for actual visits – to share with other consumers. Our database is limited to the prices/services supplied by other consumers. As awareness for OutofPocket.com builds, we will have a more comprehensive directory of services and prices supplied by consumers – including services like the one you are looking up but cannot find in OutofPocket.com.

If you do not find your service in OutofPocket.com there are several other tools you can use to research prices for specific health care services, procedures or tests. The Government CMS website includes a tool that can be very useful. If you know the specific CPT code you will be able to match the exact procedure to determine what CMS reimburses providers for that procedure. CMS Medicare payment data is always a good starting point if you need to know the lowest possible payment for any CPT code. I'm not sure insurance plans have negotiated rates as low as Medicare, but it's a good benchmark.

Here are links to four tools you might find useful to look up prices for specific health care services.

AMA CPT Code Search Tool to look up CPTs to determine Medicare reimbursement amounts

MyHealthScore online tool to look up fees for specific procedures

USA HealthCare Costs online tool to look up what Medicare pays for specific CPTs

VIMO search tool to compare medical procedure prices at hospitals

Beware of out-of-pocket costs

 

When you sign up for next year’s health plan during the open enrollment period, beware of out-of-pocket costs.  The key to making an informed decision is to understand the (1) real costs you will be expected to pay and (2) the specific coverage your health plan offers.  Unfortunately, many of the costs are not obvious and you really need to read the fine print to understand exactly what is covered and you will need to ask a lot of questions to know the specific costs you will be expected to pay.

 

With health care costs rising every year, you will be paying more for your health plan benefits in the form of increased monthly premiums, co-payments, co-insurance and deductibles.  Many employers are encouraging workers to select consumer driven high-deductible plans (CDHPs). These plans require employees to pay more out-of-pocket charges for visits and services, but have a much lower monthly premium.  CDHPs can save you hundreds of dollars on premiums per month and very often high-deductible plans are paired with health-savings accounts (tax free dollars)   When you select a high-deductible plan, you will be financially motivated to make the most of your health care dollars and you will be more than willing to shop around for the best value before visiting a provider.  Most people don’t realize this but it is possible, with a high-deductible plan, to actually spend less out-of-pocket dollars during the year.  Here’s how.

 

Plan	Monthly/Annual Premium	Deductible	Co-Pays throughout the year	Out-of-pocket health care costs for  the year	OutofPocket Amount Spent
High-deductible	$300 month,  $3,600/year	$5,000	$0	Premiums + Deductible	$8,600
Traditional plan	$900 month, $10,800/year	$0	7 co-pays @ $35 = $245	Premiums + Deductible + Co-pays	$11,045

 

Here’s what you need to know before choosing a new health plan. 

 

Identify what your co-payment amount is for health care service like doctor visits, hospital stays, outpatient procedures and diagnostic tests.   Be aware of co-insurance charges, which typically require you to pay a percentage of the total cost of service. 

 

Understand what services are NOT covered.   Read the fine print and don’t assume anything. 

 

Before you sign up for a health plan, you should try to understand how your insurance plan’s contracted rates (with health care providers) compares to other insurance plans contracted rates.  In other words, what amount are you expected to pay when you visit your doctor? Is the fee $100, $70 or $50? If you need to have an MRI will your plan require you to pay $600 or $2000? I should warn you that this is very difficult information for consumers to obtain, but it can save you hundreds of dollars on out-pocket expenses when you understand these negotiated prices.  A provider typically has many different prices for the exact same service because insurance plans negotiate different prices for the service.  Your health care dollars will go a lot further if your insurance plan has negotiated low rates with health care providers. 

 

Consumers are starting to find more cost-effective options for elective surgery by traveling to foreign countries where they have the procedure done and save themselves tens of thousands of dollars. A Wall Street Journal story in late September reported that an open heart surgery in the U.S. can cost about $100,000 and can be done an at internationally accredited hospital in India for only $8,500. A hip replacement surgery in the U.S. averages $45,000-$50,000 but can be performed for $12,000 in Singapore.

According to the Deloitte Center for Health Solutions, 750,000 patients traveled abroad in 2007 for in-patient and outpatient procedures. A private health-care provider in Singapore says the number of U.S. patients they treated in 2007 doubled from a year earlier.

What’s interesting is a growing number of insurers are starting to realize the cost-savings of medical tourism. Not only does the insurer save money, but the employer and the employee also benefit from the reduced costs. For the complete story on Paying Workers to Go Abroad for Health Care, be sure to read the article in the Wall Street Journal

One excellent reason to purchase health insurance is so that you do not have to pay full price (list) for services.  When you have health insurance, you get the discounted (negotiated) price for services that the insurer has negotiated with the health care provider.  If you don’t have insurance, then you are on your own to negotiate a price with the health care provider – and you should definitely ask the provider for a discount. 

 

Insurers and health care providers consider t the “negotiated prices” proprietary information that they don’t want this price publicized.  These negotiated prices are what insured consumers are expected to pay for services, but they are kept a secret and it’s difficult, if not impossible, to find out what these prices are until after you have visited the provider. 

 

From what I have heard, Blue Cross Blue Shield negotiates the best discounts from provider list prices.  Where BCBS negotiates 60% off list, other insurers negotiate 40% off list.  Knowing this can help consumers make informed decisions when purchasing health insurance.

 

Office visit list price:  $100

BCBS negotiated price for office visit: $ 40

Other insurer negotiated price for visit:  $ 60

 

It’s also very interesting that a provider can have up to 100 different prices for the exact same service, one for each type of insurance they accept.  Most price differences have more to do with a doctor’s negotiation power than with the quality of care from the provider.  Wouldn’t it be nice to know up front what providers offer the best value?

 

The perfect health care system is based on transparency. The Healthcare Infomatics blog posting by Michae Craige titled, Healthcare Transparency – a vision of change, shares some interesting thoughts on how transparency, if done correctly, will create incentives at all levels, and motivate the entire health care system to provide better care for less money.  Transparency is a major component of a perfect health care system.

Providers Paying Consumers $$$ for Sharing their EOBs

Here’s an interesting approach to exposing “true” health care prices (the negotiated price providers really charge for their services).  As you well know, most providers and health plans are unwilling to share pricing information before services are delivered.  In a bold move, two innovative health care providers are collecting contracted prices for services from consumers - for a reward. In April 2008, Alliance Community Hospital in Ohio launched a program offering consumers $100 if they share their EOBs so the hospital can find out how much health insurers paid for health care services received at rival hospitals. They received a lot of participation and this program is still active today. Just recently, Wuesthoff Health System in Florida announced a new transparency initiative offering consumers $100 in gas cards if they share cost information on health care services from providers in the surrounding area. This is an attempt to provide consumers with meaningful information on the true cost of health care services.

Transparency brings good things for consumers like:

1. lower prices
2. more innovative services
3. expanded choices
4. better patient care

Wouldn't it be nice to see more providers sharing true price information with consumers?

Today, HSAeducator.com, an online community and educational website on HSAs, posted a blog entry about a consumer's personal experience using OutofPocket.com to look up prices for a strep throat culture. 

" I typed "strep throat" into the OutofPocket.com website and POOF, it gave me pricing for strep throat testing in my area. The tests ranged from $10.00 to $55.00. Unfortunately, the locations listed were really not that near my house, so I couldn't hit the $10.00 strep test store. But I will have an idea of whether the price of the test was good, bad or ugly. "

Thanks for sharing your story.   We invite everyone to use this search tool to look-up prices for routine health care services (MRIs, vaccinations, x-rays, lab tests, office visits, mammograms, dental, vision) and don't forget to post/share prices you paid for actual visits after you receive your statement or EOBs for the service.

SmartMoney just published an article, Top 5 Times to Haggle for a Better Deal.  The article incudes useful tips on how you can get a better deal the next time you purchase health care services. 

Pay cash upfront.  Providers sometimes will offer you the same lower rate that they negotiate with insurance companies, or possibly even a cheaper rate if the consumer agrees to pay cash at the time of service.  I tried this and it worked!  Just be sure to ask up front.   

Compare Costs.  Check your providers rates against other doctors in your area.  You can look this information up through tools provided by your insurer, or by using the community search tool, OutofPocket.com to view patient posts of actual prices paid for services.  Providers have been know to lower their fees to stay competitive so be sure to do your homework and research prices before you visit the provider.

Last month the Wall Street Journal forum, Doctors Charges, had an interesting discussion on consumers experience comparison shopping for health care services.  Everyone seemed to agree that is is practically impossible to find out beforehand what patients are expected to pay.    Read what other consumers had to say about their experiences shopping for health care services. 

AOL recently posted tips to help you save money on health care costs.  Consumers should not have to pay full price for services.  One of the tips recommended that consumers should use OutofPocket.com as a tool to help them compare costs and find out what other consumers paid for similar services.  "Providers are often willing to negotiate, with both insured and uninsured patients and those whose insurance only covers a portion of their health expenses", says Jonathan Pletzke, author of "Getting a Good Deal on Your Health Insurance Without Getting Ripped Off."

Paying cash up front helps consumers save money because providers do not have to process billing and insurance forms, and are often willing to discount prices in return for payments at time of service. 

Be sure to compare costs before purchasing health care services.  The more you know, the better informed you will be to negotiate a fair price for services.

If you think you were overcharged for health care services, you should contact MYINSNET.com, an insurance negotiating service that offers consumers assistance in negotiating medical claims.   This company states they have saved insurance companies millions of dollars and an average savings per claim is about 25%.  The same techniques and resources they’ve used to save insurance companies money are now available for individual consumers.  Any patient with a medical bill greater than $200 is eligible to send their bill to INSNET for negotiation.  Consumers can use services such as INSNET to determine if the amount they paid for health care services is reasonable.  If the charges are deemed excessive, INSNET will attempt to negotiate directly with the provider and INSNET charges a fee based on the amount saved on the patient balance.  There is not risk for consumers because they charge no fee if there is no savings.   When you visit the MyInsnet, be sure to indicate you heard about their service on OutofPocket.com and they will offer you an additional savings.

 

Bottom Line Secrets published an article several years ago on tips you can use to fight back if you think you are being overcharged for health care services.  This article was recently brought to my attention because this information still applies today.  Here is a brief summary of some of the tips.

To avoid paying more than you should for doctor bills

1. Remember to negotiate.  Try asking your doctor for a discount. 
2. Have blood tests done at a lab, rather than at your doctor’s office. 
3. Don’t pay for follow up visits. 
4. Ask your doctor if tests prescribed are necessary. Doctors often order unnecessary diagnostic tests including MRIs, CAT scans and X-rays. Ask what these tests will determine.

Tips on how to spot over billing on hospital bills

1. Request a daily itemized bill. 
2. Avoid using the hospital pharmacy.  Have your prescriptions filled at your local pharmacy.
3. Watch out for double billing and review your bill detail carefully.
4. Don’t pay for the last day at the hospital if you are discharged before noon. 

A recent article, Click here for the best health care, offers some very practical advice on how consumers can make smarter decisions when selecting doctors and hospitals - and how to plan ahead for medical expenses. 

Selecting the right doctor

Consumers can find out about a doctor's experience and a hospital's success rates, and even find information on what these services cost.  First, get to know your doctor.  Do some research to find out what other patients have to say about the doctor.  Personal recommendations carry a lot of weight and people trust what other consumers have to say.  Check if your doctor is board certified.  Search the American Board of Medical Specialties to find out.  Make sure your doctor has done this procedure before.  Use Vitals.com to find out how many times a doctor has performed certain procedures in a year, and look up historical data to determine if there are any sanctions or malpractice claims.  If you cannot find this information on public sources, call the doctor’s office and ask. You want a doctor that has lots of experience.  Know the price before you visit the provider.  If you have out-of-pocket expenses, it’s well worth your time to call your doctor and your insurer to determine the amount you are responsible for.

Selecting the right hospital

Hospitals provide a lot more performance data.  Just like doctors, hospitals get better with experience.  You can use Vimo.com to find out how many times a hospital has performed a procedure.   RevolutionHealth.com also provides similar information.  HealthGrades is an excellent source of quality ratings for hospitals. You can purchase a report from HealthGrades to obtain cost and quality information. 

I am pleased to announce the new release of OutofPocket.com, version 2.0.  Our new search engine enables consumers to look-up prices for health care services, and allows providers to list their prices/services in the directory - free of charge.  In addition, the search engine features expanded search technology and searches for health care price data across other public price transparency tools.

I welcome all your feedback and comments on this new release and I would appreciate if you could help us spread the word.  As you know, the more people that contribute and use this tool, the more powerful it will become for everyone.

Thank you for all that you do to help promote health care price transparency. 

NEW FEATURES IN OUTOFPOCKET.COM VERSION 2.0

 

(1) Enhanced search engine provides more relevant search results

(2) Easy for consumers to post/share their own visits and prices they paid for services

(3) Comprehensive search results - searches other websites that publish pricing and websites that offer price transparency tools

 

PRICE DATA COLLECTED FROM MULTIPLE SOURCES

 

·         Providers can submit price lists for their services

·         Consumers are invited to post/share prices they paid for actual visits, along with their personal recommendations on the provider

·         Claims Data from Businesses, Health Plans or TPAs

·         Government CMS Medicare payment data

·         Websites that publish prices for health care services including hospitals, diagnostic testing facilities, clinics and physician practices

·         Price Transparency Tools on public websites including health plan tools and state price transparency tools

 

BENEFITS for BUSINESSES

 

·         Load your claims data into OutofPocket.com to enable your employees to search for their true out-of-pocket costs for specific service

·         Employees can use OutofPocket.com to search for prices for specific services in your network plan

·         Encourage employees to collaborate and post prices they paid for health care services, to share these good deals with other employees

·         Eliminate providers that overcharge - Use OutofPocket.com to direct your employees to affordable, low-cost providers

·         Avoid providers with poor performance by encouraging employees to share recommendations on provider visits

 

BENEFITS for CONSUMERS

 

·         Look-up prices, comparison shop and find the best value for routine health care services in your neighborhood

·         Tool makes it easy for you to post/share prices you paid for actual services with other consumers

·         Share your recommendations on a specific provider with other consumers

 

BENEFITS for PROVIDERS

 

·         Add your true prices/services to the directory – free of charge

·         Consumers can easily find your services and link to your website

·         Include additional information about your practice, services

·         Search results links directly to your website

·         Provides additional exposure for your services

 

 

The California HealthCare Foundation (CHCF) offers some great tips for consumers that are interested in comparison shopping for non-emergency hospital services.    The consumer tips provided by the CHCF are based on the results of a recent mystery shopper study conducted at 64 California hospitals.  Here are some of the highlights, but be sure to visit their site to read all the tips. Most important, be sure to ask the right questions before using hospital services.

 

1.     Call first.  Consumers should call a hospital to obtain pricing information, rather than wait to ask for pricing in-person.

 

2.     Know the CPT or ICD-9 code.  This is the specific American Medical Association (AMA) code assigned to each medical procedure or service and is used for billing purposes.  It’s actually a lot like a specific part-number for an electronics you purchase.   When you know the specific code (part number), you can compare apples-to-apples.  Once your doctor has explained the service or procedure you need, ask your doctor for the CPT code.  It will save you time and money.

 

3.     Ask about a discount.  If you don’t ask, it almost certainly won’t be offered.  Find out how much and under what conditions discounts apply.  You might find that paying by cash or using your credit card entitles you to discount.

 

4.     Find out what’s included.  There’s little consistency among hospitals in terms of the type of prices quoted, making applies-to-applies comparisons difficult.  You should ask as many questions as necessary until you are comfortable with the information about what specific services are included.  If you are not getting the answers you need, ask to talk to someone in Admitting, Financial Counseling, Billing or the Cashier’s Office.

Be sure to read the article When Consumers Are Driving Health Care, in the March 6, 2008 edition of the Raleigh News & Observer written by Max Borders, a Policy Analyst at the Civitas Institute. 

 

The seven million consumers with high-deductible health plans and HSAs, will definitely be able to relate to this story.

 

 

If you are one of the many consumers out there shopping around for an MRI because you have a high deductible plan and you are trying to manage your out-of-pocket costs --you are not alone.  How much will an MRI cost you?   Interestingly, prices for MRIs can range from $600 - $3500.  See for yourself, use OutofPocket.com to find out what other consumers have paid for an MRI.  Why the huge price difference for the same test?  Isn’t an MRI an MRI?  What’s the difference between a $600 MRI and a $3500 MRI besides $2900?  Personally, I’d much rather save the $2900 for summer vacation and find a trusted provider that offers me the best quality at the lowest price for the MRI.

 

If you live in the Milwaukee, Wisconsin area and need an MRI, you need to know about SmartChoiceMRI.com.  This independent outpatient MRI facility charges $600 for all MRIs, for every insurance plan.  They negotiated this rate with the 50+ insurance plans they accept.  How did they do this when all the other providers have “secret” negotiated pricing with insurance plans that can include sometimes up to 100 different prices for the same provider for the exact same service – but for different insurance plans?   I’d like to see more pricing models like www.smartchoice.com in the future.  It makes it so much easier for the consumer to compare costs, easier to budget, and makes the consumer feel like they are not being overcharged for the MRI.   

 

Results of this pricing model: 

• encourages competition
• creates more consumer-choices
• drives down prices, improves services
• encourages innovation
• increases patient care and improves the quality of care

This is a model we would like the health care industry to strive for!

 

Mona

This year there has been a lot of advice written by consumers, financial analysts, health industry experts, bloggers and even physicians, on how to lower your medical bills.  All the advice suggests that consumers should try to negotiate prices with providers for discounts.   Yesterday I worked up the courage to try out my negotiating skills with a pediatric specialist.  First of all, it was surprisingly easy and I definitely got the impression the office manager was asked this question enough that she had a prepared response.  

 

A survey conducted by the Consumer Reports National Research Center found only 31 percent of Americans have tried to negotiate the price of medical bills.  Of those consumers who tried, 93 percent have been successful at least once and more than a third saved over $100.  If you are insured with a high-deductible, uninsured, or under-insured, or looking out-of-network for services, you should ask the provider for a discount.   A physician I talked to from Mount Sinai Hospital suggested patients should offer to pay the provider the amount that Medicare reimburses and start negotiating from that amount.

 

I have a high-deductible health plan with Blue Cross Blue Shield.  This year my family was blessed once again with good health and we never got close to meeting our deductible.   During the last week of December, I scheduled an appointment with a pediatric specialist for a non-urgent consultation with my daughter.  This specialist came highly recommended and is out-of-network, and charges high rates for consultations -- a perfect opportunity for me to ask for a discount.  Before we saw the physician, I talked to the office manager and offered to pay cash for services even though I had health insurance.  The regular fee for a consultation is over $100 and they offered to charge only $50 for the office visit if I paid cash.  This is a great deal!  Benefits to the provider: they would not be submitting a claim to my insurance company for this service, they would not have to send me a bill for the office visit and they receive payment upfront.  Benefits to the consumers:  I saved more than 50% by writing a check at the time of visit.  Not a bad deal and for your new years resolution I recommend you try this out in 2008.

 

Happy New Year!

 

Last week I attended the AHIP Business Forum that was held in Chicago on November 12-14.  The conference had outstanding speakers, and some very interesting ideas were being discussed concerning transparency. 

 

Pete Neupert, Corporate Vice President Health Solutions Group, Microsoft Corp. shared some practical comments about transparency during his keynote speech.  He described transparency as enhanced customer service.  He also suggested the healthcare industry should start using copies of data since the data is already being collected and the technology already exists.  Peter said data should be shared in a meaningful way.

 

Some of the challenges and chief concerns for transparency include:

 

·         Who will be the first mover to disclose this “secret” data

·         Who is accountable

·         Existing cultures within insurance companies are a huge barrier– guts to let go and share data

·         Existing complicated pricing structures (result of the system)

·         Are the motivations in the industry aligned

·         What is our capacity for change

·         Who will develop the standards

·         How will health plans use the information to make it available to members

 

One of the presentations at this conference was an interactive session, “Preparing for Transparency: What it Means to You” and included lively discussions on transparency.  The discussions included understanding the vision behind a transparent health care system, how transparency promotes competition in a consumer-driven world and practical approaches and tools for achieving transparency.

 

The session was presented by:

Mark Ganz, President and CEO, The Regence Group

Luis Machuca, President and CEO, Kryptiq Corporation

 

Guiding Principles for Transparency

1.       Focus on the consumer

2.       Cover members, providers and organizations

3.       Requires historic collaboration across the industry.  Understand the difference between competitive differentiation and common infrastructure

4.       Must be forward focused and relevant and valuable to the consumer

5.       Requires significant culture shift  (control à empowerment)

   

The closing keynote speaker was Regina Herzlinger, professor of business administration at Harvard Business School, senior fellow at the Manhattan Institute and author of “Who Killed Health Care?” Regina is a powerful speaker.  She fills the room with compelling research statistics, bold statements, and her humor.  Regina is an advocate of market-driven, consumer-oriented health reform.  Her powerful closing statement was, “….the governments micromanagement of the prices of insurers and providers should be avoided, not emulated.  Instead the government should help lower-income people, enforce transparency, prosecute fraud and abuse---but otherwise get out of the way.”  I had the honor of meeting her in person after the event and I mentioned OutofPocket.com to her.  She said my price transparency tool using consumer collaboration to expose true prices is a great idea!