Comparing Health Care Prices: How to Access Data and Shop for the Best Prices on Medical Care.
Health care costs can vary greatly. There are tools, websites, and resources that allow patients to now search for the best price and quality for any medical service or treatment they need. This approach will allow households of all incomes to save money on their medical bills.
Unfortunately medical costs vary widely from doctor to doctor, insurer to insurer, hospital from hospital and from location to location. One facility in a county could be charging double what another charges for the same treatment, which could be a difference of thousands of dollars. There is more transparency and programs out there that can help you find the price for a medical treatment you need, whether a basic check up or surgery.
Very few people shop around when considering their health care expenses. That isn't a case of laziness; it's more of a structural failing of the system. Much of the information about health care or medical bills that you may expect to pay isn't transparent to the public, or is very hard and time-consuming to get.
Price comparisons can mean thousands of dollars in savings when it comes to deductibles and out-of-pocket expenses on your medical bills, however, so it's something that's definitely worth looking at. But how do you get started?
Comparing the Options
The place for any health care consumer to start shopping is with an understanding of the different types of insurance plans available. As a comparison to car shopping, this would be like understanding the advantages and disadvantages of the different models. The four most common types are:
- Health Maintenance Organizations (HMO): These plans limit you to a very restricted network of providers and require you to always visit your primary care doctor first for referral to a specialist. That referral is a great time to compare any future medical costs or get details on the quality of care. The advantages are that you do not have to submit claim forms when seeing network providers, and that these plans tend to be more inexpensive than the other options.
- Exclusive Provider Organizations (EPO): An EPO is like an HMO in that you're assigned to a network of providers and you'll have to pay entirely out of pocket if you want to go outside of it. This makes it more important to compare the prices. However, the networks tend to be bigger and they include the ability to go directly to specialists without a referral.
- Preferred Provider Organizations (PPO): Like an HMO and EPO, a PPO keeps you to a fairly limited network to reduce costs but doesn't require you to submit claim forms for your in-network care. Unlike these other plan types, you do get some of the costs covered if you go outside of your network, so shop for a low cost medical provider for out of network care.
- Point-of-Service Plans (POS): These plans are very flexible, assigning you a primary care provider and network but also covering some costs if you choose to go to other providers.
Of course, there is much more to each of these plan types - they aren't easy to summarize in just a paragraph or two. There are also some other options that are chosen more infrequently, like high deductible health plans (HDHPs), catastrophic coverage and health savings accounts (HSA). You can find a more detailed breakdown of these options at HealthCare.gov.
The other feature of health care plans that you need to be aware of is the coverage rating levels that are mandated by the Affordable Care Act: Bronze, Silver, Gold and Platinum if you purchase insurance in the private market. These give you a general idea of how much of your total health care costs (up to the maximum out-of-pocket cost) will be covered by the plan: 60% for Bronze, 70% for Silver, 80% for Gold and 90% for Platinum.
The Basics of Evaluating A Health Care Plan
That covers the basics of understanding what each health insurance plan type gives you, and getting a rough idea of how much of your costs they will cover. As the higher the deductible and out of pocket costs for an insurance policy, the more important it is to compare prices before any upcoming medical treatment. That's not the end of the evaluation process, however! There are a few more things to consider.
The first and biggest item to consider is the plan's deductible. This is the amount that you will have to pay out of pocket before the insurance begins covering additional costs. Usually a higher deductible means a lower monthly premium payment, and vice versa. However, there are some items that are not subject to the deductible. For example, a lot of preventative care (things like flu shots or a skin cancer screening) is available to all patients that are insured. Some plans also pay for prescriptions and certain types of physician consultations as well. Finding out exactly what each plan covers pre-deductible is a big part of comparison-shopping your health insurance.
Another big thing to consider is the actual costs of care. The medical sector in the United States very rarely does single fixed pricing. The price of care often varies depending on which insurer you have or what hospital or doctor you go to, regardless of what type of plan you have with them. The insurance companies basically negotiate "bulk rates" with providers, often getting a lower cost than usual by sending them lots of business. So even if your particular insurance plan doesn't fully cover a procedure, simply being with a particular insurer could still lower the cost.
Do you anticipate having to rely on prescription medication? If you do, it's very important to compare prescription coverage and costs for the medicines you need. There are many online tools for comparing prices and saving money on medications though as well as ways to get free prescription drugs. Plans vary greatly in how they handle prescription coverage. With some plans, a relatively high monthly payment will still save you money in the long run if it requires little to no co-payment for expensive prescription medications you'll need on a regular basis.
Finding Insurance Company Pricing Data for Treatments
If you're searching for data or pricing before you buy almost anything in your life, you can simply type the item name into Google and immediately get an overview of the prices. Unfortunately, nothing even close to that simple exists for health insurance plans. Transparency and ease of getting accurate price information has long been an industry problem.
Though it still requires a significant time commitment, there are some federal and state government tools that can help with health care shopping. These resources can be used prior to treatment or any medical care – thus saving you money, even if you are insured. There are even free government health insurance policies for the low income.
For example, dozens of states currently have an All Payer Claims Database. These databases generate raw data about health insurance claims and are not really user-friendly for shoppers on their own, but are sometimes made useful by local non-profit organizations who summarize and filter the data to help quickly display things like the average price range and patient satisfaction ratings for each medical facility in the area.
The federal Healthcare.gov site may also be able to help if your state health marketplace is operated by the federal government rather than the state (known as a Federally Facilitated Marketplace). The site allows you to enter your ZIP code and some basic personal data for a preview estimate of what each type of plan should cost you, but keep in mind that this tool does not factor in certain discounts available based on income and number of dependents.
One of the central problems with health insurance shopping is that the insurers and the patient care facilities usually hash out their prices in secret negotiations that are not open to the public. That leaves you needing to go to each individual insurer to get their prices.
If your insurance is not provided by an employer, the starting point is your state's public marketplace website (or Healthcare.gov). However, this won't show you options available directly from insurers or through private exchanges that might be available through your employer. You'll get a summary of the plan benefits and the cost of medical bills from the marketplace sites, but you'll likely need to do further research directly with the insurer to learn exactly what patient care facilities are in the network and the complete lists of benefits and out-of-pocket costs.
Fortunately, many insurers actually have useful price comparison tools on their websites. Unfortunately, the public doesn't seem to be very aware of them; most likely due to an assumption that all of the facilities in the network will charge the same price (in reality they could all be charging different prices). Which is a shame, as these tools often compare the prices and quality of regional hospitals. Once you have a list of insurers you're considering, it's worth poking around their website a little to see what tools they have to offer.
Helpful Internet-Based Tools for Comparing the Cost of Medical Treatments
There are some additional third-party websites and apps that can help to simplify the search process and save you some precious time.
HoneyInsured is basically an enhanced search engine that reviews the plans listed through Healthcare.gov and gives you a more thorough and user-friendly summary of the terms. The site also allows you to look at some private alternatives that won't be listed in the state marketplaces.
Healthcare Bluebook is a search tool that lets you search for costs of specific procedures or treatments in your area. The site will display the full price range in your area as well as the range considered to be fair, and you can filter the results by various factors.
New Choice Health combines the features of the previous two sites - you can search by both procedure and insurance carrier to get an even closer estimate of what the cost will be in your zip code. In addition to the site estimate, it's possible to request a free quote from facilities in the area.
FAIR Health Consumer is a similar search engine, but it draws results from tens of millions of private insurance claims in addition to Medicare claims. This site is considered one of the most thorough and accurate cost estimators, so much so that several states have made it their official source of cost data for the purpose of drafting laws.
Medicare has its own cost comparison engine called Medicare Hospital Compare. Medicare recipients can view hospital ratings, view a list of their services, get estimates of their costs and view information gathered from various government-funded reviews of these facilities.
If you're interested in drilling down on the quality of an individual hospital near you, Leapfrog is the place to go. This group has been publishing ratings, reports and safety grades for hospitals since 2000. The site has data on over 2,600 American hospitals.
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