Estimates for medical procedures can be hard to track down, though comparison shopping is getting easier.
If the orthopedist tells you it’s time for a knee replacement, your next question is probably: What will it cost? The answer is often elusive, and may vary greatly even if you’re able to get quotes from different practices around town. But there are a growing number of tools to help you shop around.
Unlike many industries, healthcare providers and insurers have struggled to come up with estimates for what procedures or tests might cost. That’s largely because each case is different, they say. It depends on the specific service, healthcare provider, insurance coverage and other factors.
“I think the time-honored reason—and one that’s still true today—is the complexity of disease and illness. If you’ve seen one [case], you’ve seen one,” said William Jacott, MD, a retired family physician who is chairman of Stratis Health, a Minnesota-based nonprofit that focuses on healthcare quality.
“With some situations, you might quote a cost to a patient and it comes in double because of complications,” said Jacott, who previously headed the U.S. healthcare accrediting agency called the Joint Commission.
Greater Cost Burden Impels Patients to Shop
Another reason many providers don’t offer detailed estimates is that patients, until recently, haven’t asked. Since most patients have relied on insurance to cover the bulk of their care, the overall cost of their colonoscopy or MRI wasn’t as relevant.
But that is slowly changing. More consumers now get health insurance coverage through health savings accounts or high-deductible medical plans.
Last year, 25 million Americans—or 14.6 percent of the insurance market—were enrolled in either a high-deductible or consumer-driven plan, an increase from 12 percent in 2011, according to a survey by the Employee Benefit Research Institute in Washington, D.C. That number continues to climb, reports Towers Watson, a New York–based benefits consultant that surveyed more than 500 large employers last year. Nearly one-fifth said high-deductible coverage would be the only option they offer employees this year.
As greater numbers of consumers pay for more of their healthcare expenses out-of-pocket, they are starting to demand pricing information. That way, they can shop for the most affordable lab test, office visit or hospital care.
It’s still no easy task, though. Researchers from the University of Iowa recently discovered just how hard it is to obtain pricing. Calling more than 100 hospitals—at least two in every state—about elective hip replacement, they found that about 15 percent never provided pricing even after five phone calls; 25 percent didn’t provide cost information until the third call. When the researchers did get an estimate, the cost of a hip replacement ranged from $11,100 to $125,798, according to the study, which was reported in the February edition of the Journal of the American Medical Association Internal Medicine.
Another roadblock for many doctors, hospitals and clinics has been acquiring the technology for building databases of procedures, compiling every charge that goes into providing them, and developing average costs to share with consumers.
“Transparency is still lagging because computerized medical records and computerized prescribing is lagging,” says Jacott. “Electronic health records are just beginning to infiltrate hospitals and clinics, and then once you build that in it can be very easy” to provide accurate estimates.
Comparison-Shopping Tools Emerge
Meanwhile, other parties are stepping up to give consumers cost information. Cigna, the Connecticut-based insurer, recently posted pricing on its web site for 200 of its most common procedures. The project was more than 10 years in the making, says spokesman Joe Mondy.
Cigna customers now can compare cost information and quality ratings for various physicians, hospitals and clinics. A mobile pricing app will be available this year, as well.
“We provide information to the penny for how much they charge—not just the doctor but the hospital, radiology, anesthesiology—all of the pieces,” Mondy said. In addition, consumers can see Cigna’s discounted rate, what their insurance covers, how much deductible they have left to pay, what health savings funds they have available, and what their total out-of-pocket cost will be.
Private companies are getting in on the action, too. New Choice Health lets consumers compare costs of nearly 20 common tests and procedures, offering data for scores of providers in about 25 cities. It also will enable consumers to request comparative price quotes to spur competition for a patient’s business.
It pays to shop around for prescription medication, as well, because costs vary widely by pharmacy. GoodRx stocks a database of 1 billion prices for more than 6,000 brand name and generic medications at pharmacies across the country. Consumers key in their requested medication and ZIP code—using a computer or smartphone—then get a free list of all the nearby druggists’ prices.
At Healthcare Blue Book, consumers can enter a procedure and their ZIP code; the site tells them a total price that includes fees for the surgeon, the anesthesiologist and the hospital. Its “fair price” is based on what the typical provider in that area accepts for that procedure, compiled from industry data. The company’s goal is to arm consumers with information they can use to negotiate for better pricing.
Slowly but surely, consumers will be able to obtain healthcare estimates so they can shop around for life-saving medical care just as they would for any other product or service.
Photo courtesy of Robert S. Donovan via Flickr