Whether you get your health insurance from your employer, Covered California or the open market, more of you are picking – or being forced into – high-deductible plans.
Although these plans come with relatively cheap premiums, you must spend thousands of dollars out of pocket before your coverage kicks in.
In theory, you’ll be less likely to pursue unnecessary doctor visits and treatments if you have a greater financial stake in the process, ultimately helping slow the runaway rise in health-care costs.
“Increasingly, people are spending their own money instead of someone else’s money, and they’re going to start paying attention,” says James Robinson, professor of health economics at University of California at Berkeley.
But paying attention to health-care costs isn’t easy.
The price tag for the same medical procedure can vary from provider to provider, sometimes by thousands of dollars. If you want to be a savvy consumer who shops around, “it is very difficult, if not impossible, for people to know with any precision what prices will be in advance,” says Betsy Imholz of Consumers Union.
True, it won’t be easy. But I’ll provide some tips to get you started.
Q: I have lower back pain and my doctor ordered an MRI. My health insurance has a $6,500 deductible. Should I go to the imaging center my doctor recommended or search for a better price elsewhere?
A: A survey by Castlight Health last year found that the price of a lower back MRI ranges from $589 to $3,076 in San Diego, depending on the provider. In Fresno, it costs between $636 and $921.
The potential for savings is great. But whether you should shop around depends on several factors.
Some health plans lend themselves to price-shopping more than others. You may have more flexibility if you have a PPO (Preferred Provider Organization) instead of an HMO (Health Maintenance Organization). I’ll explain below.
Second, price-shopping isn’t for medical emergencies. It’s most appropriate if you need what Jeanne Pinder calls a “discretionary procedure” that allows you choice in providers and time to research.
Pinder is a former New York Times journalist who started ClearHealthCosts.com in 2011 when she realized that people were being told to be active health-care consumers without having the tools – or reliable price data – to do so.
She warns consumers not to assume that high prices equate to better quality. “Study after study has shown that price and quality are not linked,” she says.
In California, ClearHealthCosts has partnered with NPR radio stations in Los Angeles and San Francisco to create PriceCheck sites where consumers can report – and search – costs for several common procedures, including mammograms and colonoscopies.
Before you start shopping, ask your doctor for the exact name of your treatment and the accompanying procedure codes. There may be more than one, and you’ll need them all for an accurate estimate.
Once you have that information, dive in:
First, read the Healthcare Financial Management Association’s consumer guide, “Understanding Healthcare Prices,” available at www.hfma.org/consumerguide. It will help you understand key terms and concepts that are critical to making informed decisions.
If you have job-based insurance, your employer may provide resources, such as Castlight Health’s price and quality data. Check with your human resources department.
Consider the provider’s network status, which may affect how much insurance coverage you receive and whether the amount you pay out of pocket will be applied to your deductible. With an HMO, for instance, “if you go out of network without the insurer’s approval, the procedure won’t be covered at all,” says Charles Bacchi, president of the California Association of Health Plans.
Call your health plan or check its website. Many have cost calculators that will help you compare prices at different facilities. “In some cases, health plans will be specific about the price of a service and other times, they can’t be,” Bacchi says. “That’s because of their contractual obligations to providers who don’t want price or quality data to be reported publicly.”
Sample several online resources to understand price range. In addition to ClearHealthCosts, FAIR Health has a “Consumer Cost Lookup” tool at FairHealthConsumer.org. This fall, Consumers Union, working with UC San Francisco and the state, will launch another site highlighting the costs of some common procedures by region, Imholz says.
If you can’t pinpoint the exact price, look for the amount that Medicare reimburses for procedures in your region, which is “the closest thing to a fixed benchmark price in the marketplace,” Pinder says. Find them at ClearHealthCosts by procedure code or by searching the Medicare Physician Fee Schedule lookup tool at www.cms.gov.
Call providers directly and ask about cash rates. They may give you a lower price if you pay up front and/or agree not to bill your insurance. “Don’t be afraid to ask for a lower price,” Pinder says. To be clear, though, if you pay cash, your outlay may not be applied to your deductible.
In all of these cases, when you’re quoted a price, make sure you understand what the figure means. Is it the full cash price? Is it the portion you would pay if your insurance were applied? Is it an average?
And remember, this isn’t foolproof. You may come across conflicting information in your search or contend with providers who won’t tell you the exact cost of a procedure.
Luckily, it’s getting better. “The information out there is incomplete. There are a lot of flaws,” Robinson says. “But it’s improving.”
Emily Bazar is a reporter with the California Health Care Foundation’s Center for Health Reporting. Contact her: AskEmily@usc.edu. The CHCF Center for Health Reporting partners with news organizations to cover California health policy. Located at the University of Southern California Annenberg School for Communication and Journalism, it is funded by the nonpartisan California HealthCare Foundation.