Over the last few months, you may have started to hear — emanating from the White House and your employer — the words "consumer-driven health care." What they mean is that there's now a movement underfoot to give consumers both the incentive and the ammunition they need to negotiate for medical care much as they would a house or a car.
The incentive comes from the rise in high-deductible health plans (the sort that often accompany a health savings account.) Today, 20 percent of employers offer these, up from 10 percent in 2004 and 5 percent in 2003, according to research from the Kaiser Family Foundation. A person with a high-deductible plan is typically responsible for paying the first $1,000 to $2,000 of his or her health care needs out of pocket — if not more. That makes it important and meaningful to get the best price for that health care possible.
The ammunition to actually negotiate comes from several sources. In the past, the prices doctors and hospitals charged insurance companies weren't known. But because insurance companies (including Medicare) negotiate to buy procedures and care for thousands of patients, they were much lower — sometimes as much as half — as the "list prices" doctors and hospitals would charge the rare patients who were paying cash.
Now those prices are starting to emerge. The U.S. Health and Human Services Department has been instructed by the White House to begin publishing the prices Medicare pays for common medical procedures on the Internet. Private insurers like Aetna have started programs in parts of the country (Cincinnati is an early example) where they'll publish online the exact prices they've negotiated with doctors in the area for hundreds of medical procedures and tests. The company hopes to replicate this program in other areas of the country — and other insurers are talking about doing the same. Finally, and most recently, Healthgrades, which is the largest provider of quality information on doctors and hospitals, is now publishing information on 55 different surgeries and procedures and what they cost on average, all in, across the country. Their information comes from the real prices paid by 80 different insurers. A report on a particular procedure or surgery is available for $7.95.
Whether you're on a high-deductible plan today, or are just trying to make the most of the dollars you spend leading up to your own deductible, negotiating for health care is a skill you will need in your arsenal in the very near future. Medical economists call consumer driven health care a bigger revolution than managed care.
Here's what you need to know:
Before you go in for care, if at all possible — and in an emergency situation it may not be — understand what this should cost. Get the difference between the list price (what doctors and hospitals bill for, on average) and the discounted or negotiated price that a health plan negotiated (and you and your insurer typically share). And make sure that you've got all the costs factored in. Evaluating the costs of medical care is a little like evaluating the options packages on a car — there are separate prices for all the doctors and nurses, the facilities, anesthesia and a host of other things. You'll want to look at as many of those prices as you can. For example:--------------------List Price-----Negotiated Rate Knee Replacement:--$42,118------$19,781 Gastric Bypass:-----$43,826------$18,558 Defibrillator Implant:-$93,184------$44,248 Cataract Surgery:---$5,666-------$2,665 Source: Healthgrades Medical Cost Reports
It's tough to ask a doctor — a person who commands your respect and deference — for a better deal. Understand, you're not the only one doing it. According to a Wall Street Journal Survey from the end of last year:-13 percent of American adults have negotiated with a pharmacist to see if they could pay less. -12 percent have negotiated with a doctor.-10 percent have negotiated with a dentist.-And 9 percent have negotiated with a hospital. That negotiation pays off big.-70 percent of adults who talked with a hospital say they were successful in negotiating a lower price for their medical bills.-64 percent who negotiated with a dentist were successful.-61 percent who negotiated with a doctor were successful.-And 56 percent who negotiated with a pharmacist were successful.Ask about cheaper options
There are often less costly choices to what the doctor has prescribed. Lew Randall, 64, from Seattle, Wash., recently suffered a shoulder injury. His doctor originally told him an MRI, at $1,200, would be in order to assess the damage. When the doctor heard Randall would be paying the bill himself, he recommended a $300 barium X-ray instead? Is it just as good," Randall asked. "If it were my shoulder, that's what I'd have," the doctor replied. "So why recommend the MRI?" Randall continued. "It's newer technology," the doctor shrugged. "That's what patients want." (Randall went with the X-ray and not only spent $900 less, but found the injection from the X-ray cured his shoulder as well.) A second question is whether all tests and procedures are necessary or overkill. Sometimes a doctor knows he's being overly cautious and will take a wait and see approach if he knows you're paying the bill.
Finally, have a back-pocket alternative or two. If you are only willing to use one doctor or one hospital, as in any negotiation you don't stand — as great — a chance of success as if you're really willing to take your health care business elsewhere.
And last: If you're one of the millions — 40 million — people without health insurance you should know that one of these high deductible plans may in fact make insurance affordable for you. The Web is a great place to start shopping. Go to www.ehealthinsurance.com.
Jean Chatzky is an editor-at-large at Money magazine and serves as AOL's official Money Coach. She is the personal finance editor for NBC's "Today Show" and is also a columnist for Life magazine. She is the author of four books, including "Pay It Down! From Debt to Wealth on $10 a Day" (Portfolio, 2004). To find out more, visit her Web site, .