“Buyer beware” is necessary to help contain health care costs

value-and-priceSome people, who had never cast a ballot before, voted in this past election solely as a protest to the financial burden that Obamacare had placed upon their families. Voting is a good tool, but there’s something more immediate that can produce good results in containing health care costs—taking personal responsibility.

Consumers think in terms of caveat emptor, or buyer beware, when purchasing all sorts of goods. Not much is purchased without asking, “What’s this going to cost and what value will I receive?”

That basic question gets left out many times when purchasing (non-emergency) health care services. In the past, individuals didn’t see the need. Most insurance plans had small deductibles.

But that’s changing, particularly in the individual health insurance market. Opting for $5,000 or $10,000 deductibles is necessary, just to get the monthly premium down to an affordable rate.

There are, though, a couple of things that all individuals can do to help reduce health care costs.

Get used to asking your doctor for an estimate on what a particular procedure will cost. Having the money talk with your physician might feel a bit uncomfortable, but those feelings dissipate when you realize the damage that can be done to your pocketbook by remaining uninformed.

For example, knee and hip replacements are becoming increasingly common among our aging population. What’s not common is any type of standardized pricing for this procedure. Insurance provider, Blue Cross Blue Shield, in its report called, “A Study of Cost Variation for Knee and Hip Replacement Surgeries in the U.S.,” found that total knee replacement surgeries could vary between $16,772 and $61,585 within the same geographical market.

Asking a few questions could save not just hundreds or thousands of dollars, but tens of thousands of dollars.

After receiving an estimate from your provider, utilize price transparency websites as much as possible to verify that estimated costs are within an acceptable, average range. Although price transparency in the health care field has been met with some legal challenges, most states are continuing to move forward with providing or referring some type of informational system.

The Health Care Incentives Improvement Institute monitors states and their health care price transparency efforts. In its annual “Report Card on State Price Transparency Laws,” it gave Iowa a “F.”

Iowa is not alone. Only seven states were given passing grades. Many failed because pricing data collected was insufficient or in an incorrect format, quality of care data was left out, websites were not easily navigable, or sites were not even up and running at the time the report was issued.

Iowa does not have a state all-payer claims database. The Iowa Hospital Association does provide some pricing comparisons on its website, www.iowahospitalcharges.com, but its data is based upon prices charged, not actual payment received from negotiated insurance contracts. It also lacks quality of care comparisons.

Still, it can be of some help. After first searching for “musculoskeletal system,” and then selecting knee replacements, its data show that even within the Cedar Valley there can be a $10,000 swing in average charges for knee replacements of comparable difficulty.

More information is better, but having some comparison data is better than having none at all. It’s a start.

A knee replacement surgery is a high-cost procedure. Patients may fall into the trap of thinking that pricing doesn’t matter because the $5,000 or $10,000 deductible will be exhausted, and insurance will pick up the rest. But many insurance plans require a patient co-pay percentage of ten or 20 percent, after the deductible has been reached, which can become quite costly. Many other procedures will fall below the deductible threshold, meaning the patient will pick up 100 percent of the tab.

If all health care consumers got into the habit of making smart purchasing decisions, premiums and deductibles could come down for everyone.

It may seem harsh to arm yourself with a “buyer beware” mentality in the health care field. Health care, after all, is no more onerous than any other industry.

At the same time, it’s no less.

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