How Much Should You Pay for Medical Care?

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The biggest reason for the medical spending spiral is the lack of straightforward information on prices and actual costs.

As Ralph Weber of MediBid explains; “This is because the “product” changed from “medical care” to “healthcare coverage” after 1965, and third-party payment with “assignment” of benefits (paying providers, not subscribers) disguises and increase costs.”

Those feeding on the cash cow of third-party payment have a vested interest in keeping prices as high as possible—and true payment rates and costs a secret.

One consequence is that “we charge our best customers the worst price,” states Jeff Rice of Healthcare Blue Book.

The best customers are patients whose care is not burdened with bureaucratic rules and costly busywork—preauthorization, claims filing and re-filing, endless documentation, audits, clawback threats, formularies, and coverage denials and disputes.

The best patients pay cash at the time of service or in advance, and file their own insurance claims if insured. The doctors who care for them can give their full attention to patients’ needs rather than to the intrusive demands of middlemen.

Self-paying patients are often quoted and billed the “chargemaster” price. This is at least three times what Medicare pays, and perhaps far more. A generous-sounding “discount” of say 50% isn’t all that great when you’re starting with a price inflated by as much as tenfold.

How can self-paying patients protect themselves against bearing the brunt of cost-shifting?

Patients may resort to “re-pricing” or negotiation services or brokers. Beware: these services may be touted as “free,” but the negotiator collects a portion of the price or of the “savings.” We are aware of cases in which the negotiator got paid more than the surgeon!

If the patient deals directly with the physician or the facility, then the total amount paid goes to people who cared for the patient, and the total amount of savings is kept by the patient.

It is best to determine the price before having the procedure. But even after having an emergency procedure, patients need not accept the bill without question. Collection agencies and lawyers are expensive, and so is delay. Patients need to be armed with information about what a fair price would be. They need to talk to a person with the authority to make a deal, and offer prompt payment.

The pioneer in posting actual package prices is the Surgery Center of Oklahoma, http://surgerycenterok.com. They include surgeon, anesthesiologist, and facility fee. To get these astonishingly low prices, the patient has to go to Oklahoma City and pay cash in advance. Other hospitals have, however, been known to match these prices.

Some hospitals and physicians will agree to a package price for certain procedures. You need to search their website or ask the right person.
AAPS has found some resources to help you locate cash-friendly practices and obtain price information:

MediBid.com. MediBid technology matches patients and physicians or facilities for a nominal up-front fee. This is based on the cost of providing the service, not a percentage of the fee. Thus, there is no incentive to keep prices high, or concealed. Patients can request a bid, and physicians can offer various services for particular condition. An added advantage is that patients may learn of options for their condition that are innovative or not widely known.

Healthcarebluebook.com. Freely available to the public, the site permits a patient or physician to enter a procedure and search for a “fair” price. Pricing information is gathered from claims information. Expanded information is offered to self-funded employment plans, which pay an analytical fee plus a monthly fee per employee. Physicians can pay a fee to be listed, currently $100 per year, and the website can link to the physician’s on-line appointment scheduling system if he has one.

AAPSonline.org. Direct-payment-friendly and third-party-free practices are listed under the “patients” tab at www.aapsonline.org. The website also has links to Medicare carrier websites that list opted-out physicians by state (http://tinyurl.com/773547j).

Individual Facilities. AAPS members whose facilities list prices include anesthesiologist G. Keith Smith, M.D., who lists all-inclusive package prices for ambulatory surgeries in many different specialties (http://www.surgercenterok.com) and surgeon James Spearman, M.D., whose facility lists prices for a number of orthopedic and plastic surgery procedures (http://www.travelsurgeryusa.com). Another pioneer in direct-pay surgery is Keith Petersen, M.D. (http://www.noinsurancesurgery.com).

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