Having had a lot of experience with the health care world lately, I’ve become amazed at how pricing is set. When trying to pick which insurance company to go with, I called my doctors and the hospital to find out what my expenses would be. I discovered that what they charge depends on what insurance you have!
Recently our doctor billed us $1230 for a visit and our insurance company agreed to pay $291.92 and the doctor’s office called it good! I wondered if I could have negotiated it down that much if I’d been paying without insurance. Well, this guy did too. He called several hospitals and asked if they would negotiate if he was uninsured. Here’s what he found out:
# The list price varies by 75% ($1,013 to $3,970).
# The best uninsured price varies by 92% ($204 to $2,600).
# List price discounts range from 0% to 86%.
# To get many of the discounts hospitals offer the balance needs to be paid in full at the time of service or a large down payment made, to receive it.
# Some hospitals are unwilling to divulge the price over the phone and others will not call back.
The details are at HealthCare Advocate Blog � Blog Archive � The Uninsured Patient Experiment.
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The reason that most hospitals do not divulge pricing information over the phone, and the reason that prices vary so widely from facility to facility, is due to supply costs, regional differences, operational efficiency, insurance contracts (which are supposed to be private information), skyrocketing drug costs, decreased reimbursement from Medicare and Medicaid, rising numbers of uninsured patients… The fact is, there are so many wrenches thrown into the healthcare system that it would take an entire course to explain to someone how hospital prices are set. Some individuals who work in the hospital and who are responsible for the chargemaster do not even have a full understanding of their hospital’s pricing methodology.
I think it’s time we stopped pointing the finger of blame at hospitals and take an honest look at our nation’s healthcare system as a whole to find the root of this problem. As I’ve said, there is a lot more involved than meets the eye, and much of the time, hospital’s fall victim to costly insurance contracts or outrageous pharmacy prices that force them to charge higher prices for procedures. After all, they have to make enough money to continue to operate and to care for those in need.
I definitely wasn’t saying it was the hospitals’ fault. My example was a doctor’s office. The whole system that is strange. I just think it’s strange that our medical system is one where you have to dicker for a price. I think individuals should get a price that is competitive with the one the insurance companies get.
I also think the reason that prices vary so much is that they are not published. It’s hard for people to shop and compare. (Plus, when you need surgery or emergency care, you usually want the closest hospital to your home, family and friends. Location means a lot.)