$10.99 for Almonds - What?! … An MRI at the Hospital – OK.
Many people like to shop and find bargains. Some may check which grocery store has meat on sale or buy certain items at a discount grocer or large box store. Others check features and prices of TVs online to find the best deal. But when it comes to medical services – not so much.
I acknowledge shopping for grocery items or a TV is quite different than medical services. But stop and think about the things you purchase where you ask questions, look at alternatives and decide which item to purchase given the value or satisfaction it will give you. Almost all things I imagine.
In my opinion the biggest reason for not asking questions and assessing alternatives in medical services consumption is because people don’t pay for it directly. “Insurance will cover it so why bother.” Run extra tests? Have all tests done at the hospital? Run to the emergency room for the sniffles? “Why not if I’m not paying for it” many say.
This is why I am a huge fan of high deductible health plans paired with Health Savings Accounts. I will save the triple-play tax benefits of HSAs for another time (deductible, tax-free growth, tax-free withdrawal for medical expenses). The biggest benefit of high deductible plans is the first few thousand dollars of health expenses are on your dime. Suddenly shopping instincts kick in and questions are asked of your health professional to see if alternatives exist or what extra information will be gathered from a more expensive set of tests that a less costly approach wouldn’t provide.
Let’s suppose you have a high deductible plan and are looking to begin applying this strange concept of cost comparison and cost-benefit thinking in healthcare. The first place to begin is with your medical professional. Let them know you are paying for most of the care out of pocket and want to discuss the procedures costs and any alternatives.
Another place you can look is from published prices for services. Starting January 1st hospitals are required to list standard charges for various procedures – something called ‘chargemasters’. This is only the first step and not all hospitals make it very clear what the various codes mean as this article highlights. But it is a step in the right direction and I expect further refinement.
You can also check with your insurance carrier. Some carriers offer price lists to get an idea of different charges. The best time to review is before a procedure, but even verifying costs after that fact can be helpful and checking with the insurance provider if there were better alternatives for next time.
Give it a try. You will likely not come close to the expertise of medical professionals, but that doesn’t mean you can’t have an informed discussion about alternatives while relying on their expertise - like you do with everything else.
Posted by Kirk, a fee-only financial advisor who looks at your complete financial picture through the lens of a multi-disciplined, credentialed professional.