Comparison Shop for Your Medical Care

Savvy consumers can save money if they hunt around, experts say

FRIDAY, Feb. 10, 2006 (HealthDay News) -- When your car needs a tune-up at 20,000 miles, it's pretty easy to find out how much it's going to cost you. Just call the local dealer and a couple of service stations and compare price quotes to get the best deal.

Bargain hunting isn't as simple when it comes to medical care. Often, the prices of various tests, treatments and procedures differ sharply, depending on the type of health insurance you have. Other factors also affect the price, such as whether you have surgery at a hospital or a freestanding surgery center, and whether your surgeon and anesthesiologist participate in your health plan network.

The lack of price transparency in health care makes it tough -- if not impossible -- for consumers to be savvy shoppers and make apples-to-apples comparisons. But experts say that is beginning to change as more Americans become actively involved in health-care decision making -- and in picking up more of the tab themselves.

"What I tell people is that 300 million consumers can drive more bargains than just a few hundred HMOs," said Devon M. Herrick, a senior fellow with the National Center for Policy Analysis in Dallas.

While Herrick doesn't expect to see full price transparency in the near future, the growth of health savings accounts (HSAs) is likely to put pressure on providers to make their prices more readily available, he said.

An HSA is a relatively new -- and controversial -- type of savings vehicle that lets people set aside pre-tax dollars for current or future medical expenses. HSA account holders own and control that money, so it's in their best interest to spend those dollars wisely. And to know what things cost -- whether it's an MRI or a colonoscopy.

"The fact that we're talking about it now," Herrick noted, "is evidence that more and more people are saying, 'How can I find out?'"

Last summer, insurance giant Aetna Inc. said it was launching a pilot program to share with consumers the actual prices it has negotiated on 600 common procedures with 5,000 physicians in southern Ohio, northern Kentucky and southeast Indiana. In a press release announcing the program, Harvard Business School professor Regina Herzlinger called the initiative "a significant step toward transparency of health care pricing."

PreferredOne, a Minneapolis-area health insurer, is also making price data more readily digestible. President and CEO Marcus Merz said the company last fall began posting on its Web site the costs for physician services, inpatient care and other services, including hospital outpatient care, freestanding surgery centers and imaging centers.

Dan Perrin, publisher of The HSA Insider, a newsletter and Web site, said he knows of no other organization in any other state with as comprehensive a price list.

In all, the PreferredOne database covers more than 100 medical conditions -- from tonsillectomies and ear tubes to appendicitis and gall-bladder surgery -- with costs broken out by "episodes of care." For a chronic condition, that might be 12 months of care; for an acute condition, perhaps four to six weeks.

Often, the largest cost differentials reflect where a procedure is performed, Merz noted. "Anecdotally," he said, "we know a handful of physicians have changed where they have done their operating admissions when the patient said, 'Gee, can I go to a lower-cost hospital?'"

If you're a health-care bargain hunter, ask your health plan what tools it offers for comparing prices, Merz suggested, and don't be afraid to pick up the phone and call around.

"I guess," he added, "you have to be a little assertive and take notes."

More information

Three U.S. Senators have introduced a bill that would require hospitals to disclose their list prices for common procedures and drugs.

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