More on Prices

I have been thinking more about the price of health care services. I have already shared some thoughts about this, but this time I have a more personal story to tell.

I recently had an echocardiogram. I would score the indication as “uncertain” (not clearly appropriate or inappropriate) according to professional guidelines.  As a cardiologist myself, however, I would have ordered one in similar circumstances without hesitation. So I did not think the test itself was a problem — until I got the bill.

The charges came to $925 for the echo and an additional $121 for pharmaceuticals (an injection of echo contrast material). There was an “adjustment” of $413 reflecting the discount previously negotiated by my insurance carrier, leaving me responsible for the balance of $633.

As I paid the bill, a number of questions came to mind, none of which I could answer, but all of which I ought to be able to answer if the pricing of health care services made any sense:

  • Is $925 a reasonable amount to charge for an echocardiogram?
  • How much of a mark-up – if any – was there on the contrast, and does that have an impact on contrast utilization?
  • Was the “discount” negotiated by my insurer comparable to what other insurers had negotiated with the same provider?
  • What do we charge for an echocardiogram in our practice?

I think you can see where I am going with this. There is an utter lack of price transparency in the current health care payment system. That, in turn, creates the common absurdity of patients being completely unaware of how much they may be expected to pay for recommended services until after the care is rendered.

This has got to change. We, as providers, need to understand the financial demands we are making on patients. Patients should, and will, demand to know more about the price of services before they are provided, especially as high deductible insurance plans become more prevalent. Price transparency, and honest discussion of the charge for services needs to become standard practice.

What do you think?

5 thoughts on “More on Prices

  1. Dr. Nash,

    I totally agree with you, as a healthcare consultant/practice administrator and a cancer patient myself, I truly feel your pain as they say. Many patients can’t always afford to write a check for $633 on the spot and many practices and facilities demand payment at the time of service as we well know. I know sometimes it is hard to determine before the visit what types of services will be required but when is it overkill? Sometimes I myself was shuffled from specialist to specialist and many of the same lab tests were performed when I had just had them a week before. I never knew exactly what I might be paying that day. Also the sharing of information between physicians is not happening like it should with so many using electronic medical records. You would think it would be a simple process which should cut down on additional testing.

    Many times when a patient is seen by a physician that is in a hospital owned MSO you will end up paying more in coinsurance as the allowable rate that was negotiated by the hospital is always much higher than say a small group practicing on their own. I have actually told a few of my physicians that I will no longer be having any of my scans at the hospitals I can get them cheaper in a free standing facility and my out of pocket will be much less.

    Price transparency should be a standard for all practices and facilities as I feel it would make for a better educated patient in the long run and hopefully one that can pay their bill at the time of service. If we are going to look at the costs of healthcare we need to look at all aspects.

    Great article.

  2. My husband’s GP had him get the last echo he’ll ever submit to late last year. We were billed about $250 and thought we were done. For 2013, we switched to a high-deductible health plan. We felt safe in doing so since, following severe malpractice my husband had suffered in 2011, we were resolved to consume healthcare conservatively. A few months in, a bill showed up for almost $2000 from the hospital that owned the echo lab – kindly reduced from the $2600 that an uninsured patient would have been charged. Though we had been insured, it was almost completely uncovered. I called the hospital to complain and got nowhere. “We have more modern machines,” the man on the phone sneered when I noted that their price was tenfold above the Healthcare Blue Book’s. Omitting the details of the ordeal and hassle of paying, let’s just say that the HSA was cleaned out, plus several hundred dollars from the bank account. Then my husband needed major dental work, and there was another $700 or so from the bank account, since we hadn’t been able to accumulate any money in the HSA.

    We are always told “we could have asked” about the price, but when my husband was assigned by the same GP to get a bunch of lab tests, we discovered that at that lab, you cannot in fact ask the price – it’s against policy to tell you, and when they do try to guess, they’re way off. We were also forced to pay for the PSA test he had received against his will, having crossed it off the doctor’s list. More stress, more anger, more cash spent. “I won’t be doing this again,” he said.

    The only chance we have now of catching up and developing a health-care cushion is to go a couple of years with virtually no medical expenses aside from my husband’s regular drugs, so we’re sticking with the cheaper insurance plan and doubling down on the HSA bet. For my part, I’ve resolved not to see an MD for anything unless there is money already in the HSA to pay for it. I refuse to adopt the value system that tells us to place health – and specifically medicalized health – on such a pedestal that we will let ourselves be bled dry financially for its sake.

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