An Idea to Control Medical Expenses
Everyone talks about medical expenses spiraling out of control. While the notion is not entirely true for a variety of reasons, it is certainly true that medical expenses — even with insurance — can be very high. Let me first hedge by saying that I am not an expert on this subject. On the other hand, the experts certainly haven’t done us any good in a long time. So let me offer my idea on how to control medical expenses.
About a week after I tore my ACL, I went to the UW Roosevelt Medical Center for an MRI of my knee. At the time, I asked how much it would cost. “That will depend on your insurance,” came the quick, prepared answer. Yes, I pressed, but what about a ballpark? Again, “It depends on your insurance” with a little edge this time. Not wanting a confrontation, I accepted that and went on with it. The MRI itself was almost pleasant — listening to Pearl Jam and laying supine, I almost drifted off to sleep. I soon forgot about it.
Then came the surgery. It seemed so necessary at the time that I didn’t even think about asking the question of how much it would cost. Besides, I had insurance, so I was covered, right? Well, then the bills started showing up.
As it turns out, the MRI and Radiologist’s opinion cost about $1800 — most of it paid for by insurance, but not all by any means. Then there were the other bills. UW Medicine. UW Sports Medicine. UW Medical Center. Hospital Bill. Physical Therapy Bill. Bills for each of the two braces I now possess. A separate bill for the Cryo Cuff (which I thought I paid for at the time with a $95 bill to my credit card, but after much finagling, apparently not). The list goes on and on. I’m not quite sure at this point how much I have paid out (Quicken is my next activity), but it is certainly well above $1000 at this point — most of which I had absolutely no idea was coming.
Had it been fully disclosed what each part of the process would cost before making the decision to go forward, I may have still chosen to go through the process. But maybe not. And this, in my opinion, is why medical expenses are so high — people have no idea what they are getting in to when they go in for a procedure, and the people who might know either don’t know (because it really does depend on the insurance) or don’t care enough to help everyone figure it out.
Take, for example, a convenience store. What if no prices were marked on anything, but everything you put into your basket seems necessary to your health. Then when you check out, no amount is shown. The cashier simply tells you that the store and each supplier will send you a bill later on. Sounds pretty good until the bills start arriving and you find out that you’ve paid $30 for a book on exercise and $300 for a thermos. If this is how most stores worked, then everyone would be paying huge amounts of money for even trivial things. Without the foreknowledge of cost, rational economic decisions cannot be made.
So, my idea is simply this: state all medical expenses up front. Before the patient signs anything saying that he or she will pay, the form should say how much. There are enough paper pushers in every medical establishment to make this happen before the exam or procedure instead of happening only after the procedure as is now done. This way, people know what they are getting into before it is too late, and people can make better decisions about their own medical care.
But it gets better than a go or no-go decision. When prices are stated up front, the customer (like me) can then shop around. If I don’t like the $1800 MRI offered at the Roosevelt Clinic, then I can go down the street to Seattle Sports Medicine and see if they offer it for $1700. Or maybe $600. Who knows? By enabling customers to shop around, up-front pricing introduces market forces to the medical services world in a way that they have not had to deal with in a long time. The competition will force prices down, just like it does between QFC and Safeway. The consumer of medical services will be better off.
While this approach won’t work to lower the costs of products protected by government-granted monopolies (ie, patents on drugs), it will, I believe, reduce the cost of many medical procedures. I would not be surprised by a drastic reduction of up to one half of the current cost. Furthermore, it will let blokes like me know what they are getting into before they get there.
January 28th, 2008 at 04:42:06 am
Very good observation. But what about emergency medical services? In a life-threatening event, one would be hard pressed to shop around. Other then that hopefully rare situation, I would definitely like to know the costs up front.
January 28th, 2008 at 08:41:29 pm
it’s a great suggestion – when I came down with MRSA in December, medical bills were the least of my worries as I hit the emergency room twice a day for almost a week straight.
When I started feeling better, I began worrying about how much all the antibiotics and surgical procedures would cost – luckily I have a pretty decent plan and I escaped with just a $350 bill (insurance covered the other 1200ish). I was thinking, too, that it would’ve been nice to have some of the information up front.
When looking at the bills and explanation provided by my insurance company, I noted that sometimes, the hospital would bill for (example) 48.13 and insurance would only cover 44.78, but the difference in the cost was never transferred to me which seemed rather confusing.
Oh well, I’m a newb as well.
January 29th, 2008 at 10:05:39 am
So I’ve been noticing the same thing too — but I think the difference is made up in what are called “adjustments.” First, there is the normal cost that the hospital or doctor charges to insurance (there is an entirely separate rate for charging customers directly, I believe). Then, depending on which insurance you have and what kind of contract that insurance has with the health care provider, there are adjustments made to the bill. After that, the insurance pays some amount, and the rest is up to you.
January 29th, 2008 at 05:38:46 pm
Also, in response to Ben, I can foresee some circumstances where it would be difficult to impossible to get all the necessary knowledge beforehand. But right now, I have no idea how much an ambulance ride and visit to the ER would cost me. I doubt anyone really does. Do you? Why not? Why is this information so hard to come by?
Could it be because if the information were easy to come by, prices would be driven down?