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Shopping for health care? New tool can help

"Today" financial editor Jean Chatzky offers some insight on a new service that can help consumers negotiate costs of medical procedures.

In today's high-tech world, a savvy shopper can research prices and then comparison shop for almost any good or service. Travel? Check. Cars? Check. Dishwashers, diamonds, even puppies. Check, check and check. But medical procedures? Not a chance.

Prior to a medical treatment, 85 percent of consumers have no idea how much it will cost, according to a 2005 Great-West Healthcare survey. Most consumers do not find out until the medical bill arrives, and 10 percent — because bills continue to roll in for months and insurance reimbursement comes sporadically — say they never know.

That may finally be changing. Consumers can now obtain average prices for more than 55 hospital-based procedures around the country, ranging from baby deliveries to liver biopsies to bypass and cataract surgeries. HealthGrades, a health care ratings company, released these Medical-Care Cost Reports on its Web site — — last month.

Each report is for sale for $7.95. When you buy one, you input your personal information including gender, region, insurance and co-pay so the database can personalize your report. And you're given prices (which reflect the entire episode of care, including a breakdown of hospital and lab costs and doctor and drug fees) three different ways.

The first is the list price, which is the average amount charged by the care provider. No one pays this except for the uninsured because they haven't negotiated prices the way health plans do, explains Scott Shapiro, HealthGrades vice president for corporate communications and marketing.

The second is the amount negotiated, on average, by health plans in your specific region. On average across the country, this tends to be about 45 percent of the list price, but there are regional differences.

The third are the average out-of-pocket fees for insured patients.

Why should you want this information? Because health care is negotiable. Most people don't understand that right now. But as high-deductible health plans — the sorts that typically come with health savings accounts — become more popular, you will.

With a high-deductible policy, in most years all of the money spent to keep you well will be your own and not your insurer's. That will make you more careful about how much you spend, says William Custer, director for Center for Health Services Research at Georgia State University. "There are two things consumers lack when shopping around for health care — information on prices and quality of care. So a service like this is one small step in the direction of giving consumers the information they need to make better choices."

One small step is actually a great way to put it. Even HealthGrades acknowledges the information is not perfect.

"Look at these prices only as a benchmark, not your actual dollar cost," suggests Shapiro. HealthGrades based the prices on data received from 80 different health plans. The cost is an aggregate of many different types of patients with varying levels of health. Your bill will depend on the inputs for your procedure, which will vary by severity of illness, fragility of the patient, and other risk factors. For example, the physician may need to do more preliminary tests on one patient than another, which will affect the price. But it does give you something you were lacking previously: A place to begin negotiations.

And of course, before you have any significant medical procedure or treatment, it is wise to research the quality of care you can expect from a particular doctor, hospital or health care plan. Some quality indicators do exist. Check out the National Committee for Quality Assurance and The Leapfrog Group. Some state health departments, such as New York, publish physician profiles that include items like malpractice and criminal convictions. HealthGrades also publishes quality reports for hospitals and physicians. These types of reports have come under some fire, however. For example, a 2002 Yale study of HealthGrades' hospital ratings found that low-rated hospitals sometimes outperformed the high-rating hospitals. But, the authors of this study concluded that these hospital rankings are at least better than no information at all. 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, .