Ever have to pay for something, and I emphasize something because you don't really know what you are paying for, which has two different prices (neither of which are told to you up front), and both of which are excessive? That's reality for many Americans today and is why our healthcare system is such a mess. Imagine this: you get into a car accident that is your fault and you have to go to the auto repair place. You have a $1500 deductible, but thankfully it isn't bad and likely won't cost that much. The auto repair place says that they will fix your car, but they will charge you to look over the damages and then you will have to bring it in a few times in order to repair it completely. You ask how much it will cost, they say they don't know. You ask your insurance company, who has told you to go to this "preferred" repair place, and they have a website that says repairs like this typically cost $25-30 each time you visit. So, you bring your car in for a "diagnostic" visit, where they ask you a few questions about your car and take a quick look before sending you on your way 30 minutes later, telling you to return in 2 weeks. A week later you get a bill for $220. You show up 2 weeks later to your 2nd appointment, they repair the first part of your car and again tell you to return in 2 weeks. A week later you get a bill this time for $200, but learn that the "contract rate" for your first appointment will be $120 instead of $220. When you ask why a 30 minute appointment costs $120 (or $220), nobody knows. When you ask how much you'll end up paying for your $200 appointment, again, nobody knows. When you ask how much you would have paid if you had gone to the guy down the street, nobody knows. When you ask why the insurance website estimates each appointment would be $25-30, nobody knows.
As bizarre as this whole situation would sound for a car repair, this is actually how my "High Deductible" health insurance plan works. The current health care billing system is clearly broken, this behaves so much differently than almost any other industry yet somehow they get away with it. I signed up for this plan in 2011 because I had a financial incentive to do so, and because I was a little curious about how this would all pan out especially since at the time the health care debate was all over the news.
So what have I learned? The idea of moving away from the "open bar" of most HMO's to a "cash bar" of a high deductible plan I honestly believe is the ticket to fixing health care in this country. Just knowing the cost of an appointment or treatment is enough to make one "shop around" or at least make sure they truly need to be treated. Removing ALL costs or deductibles from any "preventative care" is also a key element, as it encourages regular checkups to prevent issues from going undetected. With that said, in order for a system like this to work well, there are many areas that first need to be improved and I have been less than satisfied with my experience thus far (although most likely I will have saved a significant amount of money this year over an HMO).
With only a minor injury requiring some basic physical therapy and a few visits to a chiropractor (not a complex issue such as a serious illness or undiagnosable symptoms), I've observed the following:
- Each doctor you visit can tell you how much they bill for each service, but they don't know what service they will bill you and they don't know what the "contract rate" the insurance company has negotiated for each service which you will end up paying. So the doctor bills a "MSRP", the insurance company turns around and tells its customer they only have to pay the sale price, which is 50% off the MSRP for this service and 35% off for that service
- The insurance company knows the contract rate, but they don't know the "service code" that the doctor will bill, so they can't tell you how much something will cost or where the cheapest and best qualified doctor in the area is.
- The insurance company "cost estimator" must be accurate and easy to use. If someone isn't able to "shop around" and select a provider that has a good track record of service and affordable prices, this system will fail. After all, that is the whole point, to allow one customer to go for the top shelf tequila and another to go for the "well" tequila
- The cost that someone without insurance pays for a basic service is excessive. In my case, a 30 minute "diagnostic appointment" with a physical therapist (keep in mind I already had a diagnosis from my doctor of what was wrong) would have cost me $220 if I had no insurance, instead of the $120 i actually paid. I can only imagine what it would cost if I had a serious injury