Healthcare Soundoff. Tracking Today's Vital Issues.

Hospital Pricing Part Three (4/21/2008)

Recent studies show that what you will pay for hospital services varies widely.  A study in California showed that the Public Employees Retirement System, the nation’s third largest purchaser of health benefits, paid 30% more for hospital services in Sacramento than the statewide average for the same mix of services.

Essentially, we as consumers have little say in what we pay for hospital services.  Hospitals are basing their prices to private insurers on what they can get away with.  If you have a high deductible or higher co-insurance healthcare policy it would be wise to shop for hospital services or you might pay a higher price because your health insurer has not negotiated a favorable price for you.

Minneapolis is a good example of big differences in the cost of certain services. At the Mayo Clinic the cost of cataract surgery is approximately $11,000 per eye.  At the local Fairview Hospital the cost is $9,000 per eye.  At Minnesota Eye Consultants, the cost is $5,000 per eye.  If you have a high deductible Blue Cross Blue Shield insurance policy in North Carolina and need a colonoscopy you will pay on average $2,040 at the hospital, $1,203 at an ambulatory center, and $889 in a physician’s office.

The lesson is, we need to know what a procedure is going to cost and we should do our research before deciding where to receive the healthcare service.

Non-profit hospitals generally pay no taxes on their income and for the real estate they occupy.  They receive tax breaks that are greater than the charity care that they deliver.  Their pricing policies discriminate against those who have to pay out of their pockets.  Hospital policies do not favor the consumer.  Take a look at www.wherethemoneygoes.com for some examples of hospital abuses.

A good starting point for hospital prices is the Medicare data base.  See how to use that data base by referring to our archives article Hospital Pricing Part 2.  That post will give you way to find out the lowest hospital price for most procedures in your area.  If you have a problem, contact us at info@healthcaresoundoff.com.

If you need a procedure and will pay a large amount out of pocket, it is wise to negotiate that amount before you go to the hospital.   By paying beforehand, you can often pay what Medicare would pay, which is generally the lowest price available for that procedure.

Many hospitals are now checking your credit if you have inadequate insurance or no insurance.  They are often in partnership with companies that will offer you medical credit.  The interest rates and deadlines on those plans are excessive in general.  It is better to negotiate a deal with the hospital up front.  In order to negotiate up front deals you will need to reveal you credit history to the hospital by releasing to them you credit report.  If you do not want your credit report revealed to the hospital you will need to put a freeze for that purpose on your credit history with each of the credit bureaus.

Equifax, one of the credit bureaus, has developed a separate credit score for healthcare which attempts to predict if you can be expected to pay medical bills.  There are other companies that gather credit data on payment of medical bills on behalf of hospitals.  Hospitals use these services to determine whether certain patients qualify for medical assistance, but they also use the reports as an aid to get faster collection. 

Privacy laws do not bar hospitals getting this information, so the freeze on your credit history is your only way to maintain the privacy of these records.  Often hospital admission papers bury an authorization to your credit history in admission papers you sign that will override your freeze.

If  you get into a problem after your hospital admission regarding the payment of the bill we would advise you to go to www.fairnessfoundation.org or www.hospitalvictims.org where you will see a number of aids that will allow you to exercise the rights you have under the law to help you negotiate a fairer settlement of any claims.

We all need to be better educated healthcare consumers.  Hospital profits and prices are very excessive and we will not drive them to a reasonable level until we are aware of the abuses.

Drug Cost Savings? (4/21/2008)

Question:  My health insurance keeps changing my prescription drug benefit. It always seems to raise my costs for the drugs I need. How can I save money on my prescription drug costs?

Answer:  Tough question.  Most health insurance drug plans have raised the co-payments for the most popular drugs.  Now drug plans have four separate benefits.  Each benefit has different co-pays such as $10, $20, $30, and then a fourth level that requires you to pay full price.  If you are seriously ill, have a chronic disease, or mental health condition you are likely looking at a 50% increase in your drug costs. You do not have many options other than raising your deductibles and paying for drugs from a health savings account.

Another option we have read about is to look into a pharmaceutical discount card.  Certain Medicare Part D programs issue these cards along with the benefit card knowing that many Medicare recipients depend on the highest costing drugs.  Many of these cards generate a savings of 20% off the retail price of brand name prescription drugs.  Search for the websites of large “pharmacy  benefit managers” for information on these cards.