With the high cost of healthcare, many of us would love to reduce our healthcare spending. If you have private insurance, or don’t have insurance, you can shop around for healthcare pricing to save yourself from a shocking bill, and you might even find a lower cost provider. But how can you do that?
In addition to reading this post, I suggest you read my companion post that covers the benefits of shopping around for healthcare pricing and what prevents patients from comparison shopping.
Can you find out prices from hospitals and providers before you receive care?
Historically, hospitals and other providers did not share prices for services, or information on how much they’re paid for services, which varies depending on who’s paying. And insurers, who negotiate with hospitals and providers for reduced rates, haven’t typically shared their agreed upon prices. This has made it tough to get a handle on what you might have to pay.
However, soon it should be easier to learn about pricing for hospital services (but not for doctors and other providers). The Price Transparency Rule, effective as of January 1, 2021, requires all US hospitals to publicly list their standard charges for items and services in a machine-readable format.
The rule requires hospitals to publicly post prices for a list of 300 shoppable services in a searchable, consumer-friendly format. The prices shown must include the rates they negotiate with insurance companies and the discounted price a hospital is willing to accept directly from a patient if paid in cash. Importantly, keep in mind this pricing rule only applies to hospitals.
Data availability is lagging.
Unfortunately, most hospitals are not complying fully. In fact, many hospitals are simply ignoring the requirement and posting nothing.
Researchers collected price information availability from late January 2021 to early February 2021 for the largest 100 hospitals in the US. They searched for the required price transparency variables for all items and services. Although they “attempted to err on the side of caution”, they found that 65 of the 100 hospitals were unambiguously noncompliant.
Furthermore, a different analysis by Guidehouse of 1,000 hospitals across 27 states showed low compliance as well. Their February 9, 2021 report showed that over 50% complied with at least one of the file types (machine readable data and user-friendly data). However, approximately 30% did not comply with either type of data.
Finally, another review, conducted by Turquoise Health, found that about 2,000 hospitals out of more than 6,000 reviewed were highly transparent posting rates.
Certainly, there is significant room for improvement. Hopefully, as time passes, an increasing number of hospitals will achieve full compliance.
How can you shop around for healthcare pricing?
Fortunately, there are tools to help you figure out pricing. To a degree. The prices found on the websites given below are estimates, but they can give you a rough idea of what to expect. However, beware that you might still see unexpected costs when you get the bill.
Additionally, you should realize this can be a time consuming, confusing process. For starters, different sites use different approaches. For instance, several sites, including some hosted by hospital associations, provide the “sticker prices” which are typically much more than insurers pay, and therefore don’t give you an accurate estimate of what you’ll have to pay out-of-pocket.
Other sites provide information on the rates paid by private insurance plans or Medicare. Also, it’s important to realize that an estimate provided might not include “extra” fees, for things like anesthesiology and medications.
Where can you shop around for healthcare pricing?
Price research possibilities include:
- Your employer may provide a price transparency site. Check the benefits section of your company’s website or call the HR/benefits department and ask.
- Your health insurer’s website may offer information on pricing for services in your area. Note that these sites might not provide information on all services and providers, and the cost information provided will likely be given as a range.
- Some states provide information on pricing based on insurance claims’ database. To see if your state provides pricing information, search for “price transparency website” or “price transparency law” along with the name of your state.
- Hospitals, doctors, treatment centers and testing facilities should provide estimated costs for procedures and treatments. Don’t be shy about calling the billing department to get an estimate. This is a good idea for minor expenses such as physical therapy, as well as for major expenses such as surgery. However, the more complicated the procedure, the more involved the billing, and the harder it can be to get an accurate estimate.
- Healthcare Bluebook provides the “fair price” for medical and dental procedures in your area. “Fair price” is the amount the provider typically accepts as full payment from insurance companies – which is substantially less than the billed amount.
- FAIR Health Consumer provides pricing based on your location for medical and dental procedures. Learn the expected out-of-pocket expenses for both in-network and out-of-network providers.
- New Choice Health has a Free Quote Request platform through which you receive from providers. The tool can be used by patients with and without insurance.
- Hospital Cost Compare provides cost information for over 100 surgical procedures, along with patient survey results.
An important caution.
It’s important to realize that even if you shop around for healthcare pricing before a procedure, you can still end up with a bill that contains unexpected charges.
For example, surgeries involve numerous billing codes, from the surgeon and operating room to medications and oxygen. And it’s virtually impossible to figure out all of the potential codes and the expected costs of each code.
Don’t have private insurance through your employer?
If you are part of an HMO, you generally must use providers who are part of your HMO network and your portion of the bill is predetermined.
If you are insured through Medicare, you can look up a specific item, test or service to see if it will be covered, by visiting their website. You can also find specific cost information (like whether you’ve met your deductible, how much you’ll pay for a service/item, or the status of a claim) on MyMedicare.gov.
If you receive coverage through Medicaid, you should visit your state’s website to learn about your coverage since states establish and administer their own Medicaid programs and determine the type, amount, duration, and scope of services.
Help for low-income patients.
If you don’t have insurance, or you can’t afford your co-pay, you can try to negotiate prices with doctors, hospitals, and other medical service providers. Remember that insurers negotiate discounts, and your doctor or hospital will likely quote a price which is significantly higher than the price they usually receive.
Don’t be shy about asking for a discount that will put you closer to what insurers pay. And you might save money if you offer to pay the bill in full before, or at the time of, service. If you can’t afford the service, ask if they offer a payment plan.
Charity care programs at nonprofit hospitals.
Did you know that in order to keep nonprofit status, the US government requires nonprofit hospitals to have Charity Care programs that can cover some or all of your hospital bill if you qualify?
To find information on a nonprofit hospital’s charity care program, search online with the hospital name and “patient financial assistance”.
To take advantage of these programs, you must complete a potentially difficult and confusing application process. Additionally, you may have to persist to get an application since some hospitals deter applicants.
And don’t expect your hospital to offer up this plan – you’ll likely have to hunt it down yourself. Disturbingly, a 2019 Kaiser Health News analysis found that 45% of nonprofit hospital organizations routinely send medical bills to patients with incomes low enough to qualify for charity care.
However, it can be worth your time, even if you already paid a bill – you might get a refund.
What are the income requirements of these programs?
Each hospital can decide what criteria they want to use to allow for free or discounted services. Therefore, before an expected hospital stay or procedure, you might want to call the hospital’s patient financial assistance office and ask how they determine qualification for their charity care program.
If your circumstances allow, you might want to call more than one hospital to see how their programs compare. Importantly, hospitals’ charity care programs can include exceptions, so ask what services might not be covered.
Not all medical providers offer charity care programs.
Importantly, the law only applies to nonprofit hospitals. And only about 56% of community hospitals have nonprofit status – the rest are for-profit. Additionally, realize that doctors and other medical providers are not hospitals and therefore don’t fall under this rule.
Tips for applying for charity care programs.
Because it can be tricky to apply for charity care programs, I suggest you read this article by Kaiser Health News.
Other sources of financial help
A note on surgery centers and other freestanding sites.
If you shop around for healthcare pricing for surgery and invasive tests (e.g. colonoscopies), you might find the cheapest alternatives are free-standing surgical centers and clinics. However, I strongly advise you to think twice about choosing these less expensive options, even when your doctor recommends them.
These centers are generally not equipped to handle emergencies and patients have suffered and died unnecessarily. Before making this choice, read my blog post: How Safe are Surgery Centers?
What about shopping around for the cheapest prescription medications?
You might be surprised to learn that there are no set prices for prescriptions. Pharmacies can charge a different price than their competitors, so it’s worth calling around.
And, shockingly, sometimes you can save money by buying your prescription without using your insurance plan! Read my blog post to learn more: How to Save Money on Prescription Medications.
If you are thinking about saving money by buying prescriptions on the internet, be careful! Legitimate looking websites may sell dangerous counterfeit medications. Read my blog post to learn how to protect yourself: Dangers of Black Market Medications – More Common Than you Think.
It can’t be only about the money!
When it comes to your health, money cannot be the only thing you consider! Of course, no one wants to put themselves in danger to save a few hundred dollars. Quality matters. But only 1/2 of price transparency tools provided by health insurers include information about quality, so you’ll have to do your own research.
Ask your friends and family for referrals. Ask your doctor where he/she would go in the same situation. And research hospitals and doctors on the sites listed in the Zaggo Resource Center.
For more information…
Read these blog posts to learn more about money related matters:
- Reduce Your Healthcare Expenses.
- The Impact of the High Cost of Healthcare
- Tips for Handling Medical Bills.
NOTE: I updated this post on 10-15-21.