Sunday, April 21, 2024

How much will that cost me? On hospital pricing

Hospital pricing is notoriously difficult to understand. Until very recently, it was also impossible to find out how much a hospital was going to charge you for a test or procedure until you got the bill.

Starting January 1, 2021, each hospital operating in the United States was required to provide clear, accessible pricing information online about the items and services they provide both as a comprehensive machine-readable file with all items and services and in a display of shoppable services in a consumer-friendly format.

Initially this rule was largely disregarded, and those hospitals that did post prices did so in a way that only computer geeks could access. Gradually, more hospitals are complying.

Does this matter to you? If you have good health insurance, it may not matter that much, as your insurance company will have negotiated rates for most hospital services. If you are uninsured (still 10% of the U.S. population) or if you are among the many more with high-deductible plans, it matters a lot.

If you have a high-deductible plan, you may have to pay the entire charge for an MRI of your knee, and so if it is $800 or $2800 matters.

There are two things you need to know before “price shopping” for a test or procedure.

The first is that prices vary wildly, and with little correlation between price and quality. A recent study found that the hospital charge for uncomplicated vaginal childbirth varied from $1183 to $55,221 (that is not a typo!).

The second is that if you call the hospital billing department and ask the price, there will often be a major difference between what you are told and what is posted on the hospital website. In only 15% of hospitals that both posted prices on-line and gave them over the phone were the prices the same, and differences often exceeded 50%.

So…if you are uninsured or underinsured, take the time to price shop when you can – when it is not an emergency. Try the websites for several hospitals near you to get an idea of which are at the high end and which at the low end. Then, try calling the billing departments. If they quote you a lower price than the on-line price, get in in writing by email or post.

Two other cost-conscious suggestions:

When you are well, check which hospitals near you are in your insurance network – when you are ill this will probably not occur to you, and going to an out-of-network hospital can cost you dearly.

Just because your doctor says you need something does not guarantee that it will be covered. Always ask if prior authorization is needed before having the test or procedure.

The money you may save will be yours!

Prescription for Bankruptcy. Buy the book on Amazon

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