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Location, Location, Location:  Comparing Prices Matters

Tales from the Mailbox is a blog by Health Cost Matters.  We relate stories of billing mistakes and mischief, and what steps you can take to prevent overpaying for healthcare.  Today we discuss lack of transparency in pricing.

At Health Cost Matters, we believe an informed consumer is a prudent consumer.  Two of our many mantras are: ‘Know ahead what your procedure will cost’ and ‘Compare costs because provider prices vary widely’.  Not the catchiest of mantras, but after spending decades auditing claims for insurance companies I’ve seen how common it is for simple lab, radiology or outpatient procedures to vary by as much as 60-fold and even more between hospitals and free-standing providers in the same zip code

How Hard Can It Be To Compare Provider Prices?

I spent a morning recently discovering the answer to this question.  My friend Jennie underwent a Hysterosalpingogram (HSG) recently and was surprised at the charges and her payment responsibility for this 30 minute, common radiological procedure.  I wondered if Jennie had gotten a reasonable deal, so I decided to price compare.  In my scenario, I was price-shopping for an HSG in the DC area, I had a high dollar deductible and would probably be paying out of pocket.  (Spoiler alert: I learned after my research that Jennie paid $1,455.51 for the procedure at the third provider, listed below.) 

Here’s what I found with my timeline:

9:30 – 9:45am.  Free standing radiology center with locations throughout the metropolitan area.  The clerk informed me that the total billed for the HSG was $1,172; self-pay would be $332, and my insurance company’s maximum payment was $283.  Easy, fast, transparent.

9:50 – 10:05 am.  Women’s Fertility Clinic, Regional Locations.  Here, if I pay cash, my cost is $350.  What if I have insurance?  Depends on the insurance, but the average fee for those with insurance was $1,325!  If I have insurance and a $1,000 deductible they’ll collect the $1,000 from me + any copay, and the balance will be billed to my insurance company.  While my $350 cash payment will not count towards my deductible, I'm wondering why would anyone with a deductible 'charge it' to their insurance company if they knew the cash price.

10:20 – 11:50am.  Major healthcare system with hospitals and free standing locations throughout DC and Baltimore.  I called the number on their website (x9729).  There they transferred me to x2330 who transferred me to x2424 who transferred me to x7000, the billing office.  X7000 transferred me to x1292, the “Estimate Verification Department” (EVD), which sounded like exactly what I needed.  X1292 rang a while and then just stopped.  When I redialed x1292 directly several times I got a fast busy signal.  I called x7000 back. Whoever answered next had never heard of the EVD, so she transferred me to another billing office, and the number there rang 3 times and stopped.  I called x7000 again and the next person connected me to x 8585, Medicaid billing.  Medicaid billing told me I needed customer service, so she connected me to x2424 (seven numbers ago).  X2424 transferred me to the women’s health practice where I got an automated attendant (unfortunately I did not write down this number).  The auto attendant told me to press #3 for the billing office, but I got the prescription line instead with options only to leave messages.  I called back x2424 and the person this time didn’t know the number for the women’s health practice; instead, she told me I need the EVD, and gave me a different number, x8200.  Here I reached someone! 

The very helpful person at this EVD looked up the ‘average payments’ at 5 facilities.  Those average payments ranged from $175 – $9,000.  In all fairness the facility with the $9k average payment had performed only one of these procedures.  So the real range in their 4 facilities was $175 - $1,000, an almost 6-fold difference within this one hospital system in the same region!  While this was instructive, all these facilities were in Baltimore, and I was looking for a DC facility.  She did not have access to the DC rates, so she transferred me to x1152 (EVD for DC).  The person at x1152 was not available and I should leave a message. 

This process took 90 minutes partly because each conversation with a human was preceded by recorded messages “your call is very important to us” and “this call may be recorded to ensure quality service”.

12:00 – 12:15pm.  Major teaching hospital in DC.  I called patient accounts and got 3 options:  1) customer service, 2) payment on account, 3) payment by phone.  I chose #1, customer service. The recorded message informed me they were very busy, my call was important to them, please continue to hold.  After 10 minutes I hung up.

12:15 – 12:30pm.  DC Hospital, member of a DC & Baltimore health system.  I called the DC number listed on the website.  That number is no longer in service, referred me to call x3017.  When I called x3017 the automated attended said this was for Baltimore facilities only and gave me two options: 1) to make a payment and 2) customer service.  When I selected customer service, the message was that the office was closed for an off-site meeting.  I called the main number for admissions from the website and was transferred to ‘insurance’.  Insurance forwarded me to x4161 to talk with a financial counselor.  The financial counselor who could help me (my last name begins with H) was not in the office and would have to call me back.

Three hours of my life I can never get back.  But three takeaways:

  • Pricing at the free standing facilities was transparent and pricing at hospitals, not so much.  Perhaps the lesson is if a provider won’t give you a price, go elsewhere.
  • It pays to inquire about ‘cash price’.
  • This was harder than I thought it'd be.  If this had been pricing for myself, I would not have had the stamina to continue past provider #2.

There’s an opportunity here and new businesses are emerging to address it.

One business, ‘The Zero Card’ is an easy-to-use, ingenious service that provides employers a supplemental network to their healthplan.  This supplemental network gives employees and dependents direct access to consultative, surgical, imaging and lab services with no copay, coinsurance or deductible. Employers pay remarkably low prices, allowing them to cover all employee out-of-pocket (hence the name “The Zero Card") and still experience significant savings. The Zero Card currently operates in the Midwest and plans expansion to the Northwest, Rocky Mountains and Southwest starting in 2017.

Another emerging business, Asserta Health’s "medEcash app saves 20-50% by enabling consumers to pay the full transparent cash price when they receive care, even when all or part of the funds comes from their employer or health plan. Because providers are paid cash at the time of service, they don’t spend time or resources on claims, billing or collections.  Asserta's concierge guides consumers through the entire process and creates an administrative record so that no important data is lost."

Consumer demand for transparency in pricing will be the drumbeat that drives consumers and employers to increasingly bypass, whenever possible, the closed networks and business-as-usual approach purchasing health services. 

Please post your ideas that have helped you control costs.  Do you have experience with, know about, or own a business that helps consumers find transparent prices and value-driven providers?  Please let us know.

Overwhelmed by healthcare costs and confusing claims?  Is it easier just to pay the darn bill than try to decode it and fight the system?  You are not alone. 

Please send your personal ‘tale from your mailbox’, and ideas how healthcare consumers can control their costs.  Watch this space as we learn new approaches to address readers’ concerns and questions.

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