Surgery Price Shopping With A High-Deductible

Cost Shifting

The term “cost shifting” can have several meanings in healthcare and one of those meanings is very pertinent to the topic of high patient deductibles.

Cost shifting can refer to the way employers and insurance companies shift healthcare costs to employees. High deductibles are a fundamental way that employers and insurers can make patients pay a higher proportion of their medical bills. What is frustrating about high deductibles is that they are supposed to make patients more cost conscious consumers, but insurance companies and medical providers are largely unwilling to disclose prices to patients who are shopping for services.

I have yet to see a major insurance company that shares the prices of services for each medical provider in a community with their enrollees. The insurance companies have written payment agreements with every provider that accepts their insurance, but this pricing is not shared.

A patient with a high deductible is highly inclined to call around to shop for the cheapest deal they can get. Unfortunately, medical providers really don’t want patients to price shop their services either. There is a negative stigma in the industry associated with price shopping and I have had billing office staff tell me directly that they do not want their patients to making decisions based on cost. This is a real shame because patients could save the insurance companies and employers millions, if not billions of dollars by doing the price shopping.

I find it very unfair that patients are burdened with high deductible health plans, but that the health insurance companies do not provide their patients with access to tools or resources to help them make the most cost effective decision. If the insurance company does not share provider pricing with their covered enrollees and the providers do not share their pricing with prospective patients, how exactly are high deductibles making patients more cost conscious?

Online Medical Price Shopping

I’ve been watching two medical price shopping websites very closely this past year.

HealthcareBlueBook.com and NewChoiceHealth.com have emerged as the two leading resources for patients trying to shop and compare costs among medical providers. While these websites have information that will benefit uninsured patients, I have to say I do not see very much value in these services to high deductible patients.

HealthCareBlueBook.com

Unfortunately for HealthCareBlueBook.com, the Affordable Care Act will eliminate the vast majority of their uninsured users in the next three years. The primary function of their website is to provide good “target” pricing for self-paying, uninsured patients who do not have access to insurance company discounts on medical care and therefore need to negotiate down the “sticker price”.

HealthcareBlueBook.com’s functionality is less useful to high-deductible patients who want to price shop local surgery providers and do surgery cost comparisons between different providers. While their website provides good overall target pricing for medical treatments like colonoscopy and knee surgery, it does not enable high-deductible users to compare out-of-pocket costs unique to their health insurance plan and coverage levels. This is what high-deductible patients need.

NewChoiceHealth.com

NewChoiceHealth.com is more focused on high-deductible patients than the former, but the validity of their surgery price shopping information seems to be largely based on “estimated” fees and “sticker prices” at this point in time. This website actually identifies the medical providers in your community that provide the service you are seeking but their numbers are highly questionable. For example, the last time I checked, their website says the cheapest price of a colonoscopy in the Cincinnati is $1,850 and the average price in Cincinnati is $2,025. I know for a fact this is erroneous because the surgery center I ran in that region averaged less than $600 for colonoscopies (cpt 45378).

Based on this I would speculate that NewChoiceHealth.com has acquired “gross charge data” from Medicare’s public unidentifiable data set to find out the “sticker prices” for medical treatments performed by providers around the country. These “gross charges” or “sticker prices” are of little use to high-deductible insurance patients, because these highly inflated prices do not take into account the various pricing discounts that virtually all insurance companies have negotiated on their patients’ behalf.

My surgery center treated patients covered by over 100 different insurance plans and different “insurance prices” were negotiated for nearly every insurance contract. Even patients with the same insurance company would pay different amounts because every employer set different deductibles, copays, and coinsurance for their employees.

In reality, high-deductible patients need to see their insurance pricing for different providers to perform a real surgery cost comparison. They could care less about the “sticker price”.

Why online medical price shopping can’t work

The bottom line is that most medical providers are disinclined to make their “insurance pricing” available on the internet for every type of service and insurance patient they see. Aside from the massive time commitment it would take to get all the information together for every single type of insurance accepted, providers are also bound by confidentiality agreements in their insurance contracts. The insurance pricing rates established in the contracts between insurers and providers are deemed legally confidential because neither providers nor insurance companies want their competitors to know their pricing. Many providers do make their “sticker prices” public, but this is useless to someone with health insurance.

Ideally, it would be great if insurance companies provided tools for identifying the lowest cost providers on the personal insurance websites to which nearly every enrollee has access. For example, I can go to myuhc.com to find in-network providers, view my claims, or check my benefit plan. However, I am not aware of any insurance company that shows their enrollees the difference in pricing between different providers for the same service. The largest commercial insurer, United Healthcare has a generic cost estimator that estimates the overall costs of treatments, but it does not assist patient in identifying the lowest cost providers in their community or doing any sort of medical cost comparison for different locations. Insurance companies do not want competing insurance companies or other providers to know how much they pay each provider.

The medical price shopping solution

True medical price shopping for patients with high-deductibles requires the patient to “get their hands dirty” and actually call the medical providers in the community.

Providers can calculate patients’ out-of-pocket costs if they know the exact treatment you’re having, your insurance company, your benefit plan coverage, and your deductibles, copays, and coinsurance. Imaging centers, ambulatory surgery centers, and hospitals do this anyway for patients that have been scheduled. Providers usually have dedicated employees called “benefit verification specialists” who look up patients’ insurance benefits all day long.

If you tell the provider that your health insurance is Cigna and you want to know your out-of-pocket costs for a colonoscopy, they can check their Cigna contract relatively easily to see what Cigna’s contract rate is for colonoscopy. Then you or the provider just have to apply your benefits (i.e. deductible, coinsurance) to the contract rate to determine your out-of-pocket costs.