How do you know if you got a good deal?
Jed Stuber · Mar 28, 2018
One of the questions Samaritan members often ask is, “How do I know if I’m getting a good deal on health care?”
The short answer is that you should start by using Healthcare Bluebook on Dash, but let’s consider why that is so important.
Often people asking this question are looking for a percentage of discount they should aim for, which is important, but not necessarily getting to the heart of the matter.
For the sake of argument, let’s say that we all agreed that a 40 percent discount is a “good deal” and that is the percentage discount we should all go after.
But what if Provider A is charging $15,000 for a foot surgery and Provider B is charging $1,500 for exactly the same surgery? A 40 percent discount off Provider A’s $15,000 price results in a bill of $9,000, which is six times more than what you would have paid if you had gone to Provider B.
That’s a real-life example that happened to the founder of Healthcare Bluebook, Dr. Jeff Rice, when his son needed foot surgery. The price variance occurred in a city where that minor outpatient surgery could be done by the same surgeon at two different facilities that were only three blocks apart!
Consider another example, this time for major hospital expenses.
You get a bill for $100,000 and are offered a 40 percent discount, resulting in a bill of $60,000. Is this a good deal? What if that discount is based on something called a “charge master” that virtually no one ever pays? What if other payers—Medicare or insurance companies—typically pay only 30 percent of this master price? That is, they would only pay $30,000 for the same services you are expected to pay $60,000 for.
This very common scenario was brought to America’s attention by lawyer Steven Brill in his famous Time magazine article “Bitter Pill: Why Medical Bills Are Killing Us.”
Toby Meisenheimer, a Samaritan member and a financial adviser, described in a recent newsletter article why he would not accept a 25 percent discount from a hospital.
“I got a taste of what health care is charging these days, and how they are using the cash-payers like us to pay for their new hospital wing and landscaped courtyard,” he wrote.
Toby persisted until he got a 60 percent discount. Here’s how he summed up the experience:
“All along, I kept coming back to this thought: Is it Christian to just pay what they are asking, and be nice, or to politely pick away and have our voice be heard, whether it is our own money or shares from fellow members?
“At the end of the day, it’s all God’s, and I believe you have to feel led to either pay with gratitude, or roll up your sleeves and risk being a bit difficult. To my fellow Samaritan members who fight, win, and turn the discounts into more Samaritan needs being met and future increases postponed, my family thanks you.”
These examples show us that thinking of good prices in terms of a percentage discount doesn’t tell the whole story. The variance in prices is simply too great.
In fact, Healthcare Bluebook’s research shows that it is common for the same health care services in the same area to vary in cost by as much as 400 percent! That means that a $20,000 bill at one facility is a $100,000 bill at another facility.
The search tool from Healthcare Bluebook, which is available to every Samaritan member on Dash, allows you to search for a procedure, doctor, or hospital in your area, and to get quality and cost ratings. That’s why it is so powerful. Knowledge is power.
Pricing information forces providers to compete with one another and gives you the ability to compare them before your treatment. Members also use Healthcare Bluebook’s information to negotiate with providers after service.
But what about our original question, “How do I know if I got a good deal?” Here’s the honest answer: Because price information isn’t readily available in health care, you may never know for sure, but you can know if you used the leverage available to you with Healthcare Bluebook and other tools available in the Health Resource Center.
Again, knowledge is power, but only if you put it to work.
Why pricing isn't available in health care
Why isn’t pricing information available from health care providers to begin with, the way it is in most industries? We’ll return to that topic in the future. In the meantime, here are links to a few articles from previous newsletters to get you started.
1. “Anesthetized debate” by Thomas Sowell
2. “The immorality of government mandated health care” by Paul A. Cleveland
3. “100 years of US medical fascism” by Dale Steinreich
4. “The free market had nothing to do with our health care crisis” by Steward Donovan
5. “Removing state-based obstacles to affordable health care” by Dr. Jeffrey A. Singer
6. “The case for being uninsured” by Samaritan Ministries member Dr. Jane Orient