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Your Health

Consumers losing in health care pricing games

Apr 05 2016
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young consumer researching on her laptop

Would you pay ten times more than needed for a routine medical procedure? Be a smart consumer.

Your knee pain is not getting any better and your doctor recommends a test that can reveal more information about the source and extent of your problem. Next you want to know how much will it cost.

The answer is, it depends.

Where do you live? If you live in Dallas, the same procedure could cost $210 at one place and $2,906 at another just down the road. In Phoenix, the cost could be $299 or as much as $1,329. Living in Cherry Hill, New Jersey? You could be looking at $325 or 10 times that cost for the same procedure. (These are actual prices from Aetna claims.)

Yes, within the same zip code, the price for a single test can be 10 times higher at one location than at another a few miles away. In today’s health plans, where people often pay a percentage of the total bill, those price differences can mean hundreds or even a thousand or more out of your wallet.

In today’s health plans, where people often pay a percentage of the total bill, those price differences can mean hundreds or even a thousand or more out of your wallet.

So what is a smart shopper to do? Shop! And chances are you have your shopping tools right on your phone or computer.

The power to save money is, literally, in your hands. Specifically, it’s in your smartphone (or on your computer, at the click of a mouse). Online cost tools and apps from health plans and other sources now give consumers the power to choose a doctor or hospital based on cost and quality.  Shopping for health care services may not be quite as easy yet as comparison-shopping for a coffee maker at local stores, but the process is getting easier.

consumers of health care“Until a few years ago, health care costs were a black box to consumers. There was no easy way for them to find out what hospitals and health care centers charged. What’s more, consumers had no incentive to ask since they often paid a set amount under their health plan, no matter where they got care,” said Chris Riedl, who leads Aetna’s Institutional Businesses Product Management. “Over the last several years, we’ve been able to open up the box with cost transparency tools, so consumers can see what we see as a health insurance company.”

Now people can compare costs before they schedule a procedure, Riedl said. “That’s especially important because most health plans today have a high deductible to keep premiums down. If someone hasn’t met their deductible yet, they may have to pay the entire cost of a procedure themselves. Even if they have met their deductible, they will likely be responsible for some of the cost. That’s when a huge price difference for the same procedure at two different facilities really hurts consumers.”

How to get help

  • Check your own health plan’s tools first. A study in the April 2016 issue of Health Affairs says many health plan tools like Aetna’s Member Payment Estimator can tell members exactly what they will pay based on their health plan details and how much remains of their deductible.
  • People can check for hundreds of common procedures or visit costs in a specific geographic area.
  • Many tools also include quality information along with cost.
  • Tools like iTriage are available right on smartphones, making it easy to get answers anywhere, any time.

So how much can consumers really save?

The study found that people who had high deductibles were the most likely to use cost transparency tools. But they’re not the only ones who would benefit.

Let’s assume a family has already met their plan’s deductible, and now they are paying 20 percent of the rate the insurer has negotiated with the hospital or doctor. How big a hit does that 20 percent take from consumers’ wallets for the example above?

  • In Cherry Hill, the parent of a child with a sports injury could pay $65 out of pocket – or as much as $642.
  • In Dallas, a runner with knee pain could pay anywhere between $42 and $581.
  • In San Francisco, someone plagued with knee pain after a fall could be left with a bill for $90, or up to $572.

“After they do the research, consumers may still choose a more expensive option, but they will know going in and will have made an informed choice,” Riedl said.