Conventional wisdom holds that it is nearly impossible to compare prices for medical care like consumers do in other markets. It’s easier than you realize — my wife and I do it just about every time we see our doctors or fill a prescription. Health plan deductibles have nearly tripled over the past decade. Shopping for medical care is more important than ever.
According to the Kaiser Family Foundation, an average employee deductible for self-coverage rose from $584 in 2006 to $1,478 in 2016. In the individual market, the average family deductible was $7,983 in 2016 according to eHealth.com. This suggests millions of Americans are essentially paying their medical bills out-of-pocket.
The first step in shopping for health care begins in your doctor’s office. I’ve found my doctors are very willing to discuss lower-cost treatment options when I tell them I have a high-deductible plan. Recently my dermatologist gave me free samples of a spray steroid, a prescription for a generic ointment and recommended starting less invasive therapy after discovering my health plan deductible was $5,000. I found the steroid ointment on Amazon for two-thirds less than my local chain pharmacy.
The easiest therapy to shop for is prescription drugs. The free drug samples doctors often hand out are for brand drugs, which often come with high prices once you need a refill. Start by asking your doctor if he or she can prescribe a generic drug rather than opting for a newer brand name without having tried the lower-cost option first. You may even want to ask your doctor about prescribing double-strength generic tablets that can be split in two. The savings is often 50 percent. I often use a service called GoodRx.com to compare drug prices at area pharmacies. The website also provides drug plan discount codes that are often much cheaper than paying cash without a code.
Patients can compare prices for diagnostic services and lab work as well. Do not make the mistake my wife almost made when she called a local hospital outpatient clinic to schedule a CT scan. She was taken aback when told her share of the cost would be $2,700. I’m a former hospital accountant; hospitals charge higher prices than anywhere else. Avoid them if you can. I used Google to check for CT scans using the billing code my wife’s doctor had ordered. In less than 10 minutes I found a cash price for $403 that included the radiologist fee. Always ask about cash prices, they are often cheaper than your insurers’ negotiated price — but remember paying cash may not count towards your deductible. My wife and I also look for deals on our periodic lab work. When our doctors order blood tests, we often take our lab orders and compare tests and prices online. MyMedLab and Walk-In Lab are two we have used.
A recent study by the Health Care Cost Institute found 43 percent of medical services for people with commercial health insurance are shoppable. Yet, a study from the National Bureau of Economic Research found patients are more likely to merely reject a recommended service based on the cost, rather than look for a better price for that service. Granted, few people are going to use their iPhones to compare prices in the back of an ambulance heading to the emergency room (ER). However, the care most people receive does not originate in an ER. Actually, knowing to use an urgent care center instead of an ER for non-emergencies is a great way to save 80 percent without even checking the price.
Acting like a prudent health care consumer is really not that hard. Another benefit is that consumerism spurs providers to act more like competitors.
A much improved version of this ran in the Wall Street Journal as a point/counterpoint debate on April 12, Can Consumers Be Smart Health-Care Shoppers?