Transparency seems to be a four letter word in the medical field. It is often much more difficult than you would guess to simply obtain the price that you will pay for a service.
A recent example can clarify this point. A young adult male required an MRI of a particular portion of his brain in order to look for a mass. He has a high deductible insurance plan and he wanted to know if it would be better for him to pay cash for the MRI or to allow the radiology company to bill his insurance. I told him that his cash price for the MRI would be about $600. In order to find out how much insurance would pay, and, therefore, find out how much of the total bill would end up being his responsibility, he called his insurance company. He told me that after 6 hours of his time waiting on the phone and talking with insurance company employees, he was still unsure how much of the total bill would be his responsibility.
The opportunity cost for the 6 hours he spent just attempting to find out how much he would pay could take a whole other blog post to discuss. Consider if he placed a value on his time of $35 per hour. For the 6 hours he spent searching for the final price, he wasted $210 ($35×6) worth of time. Since the cash price of the MRI is $600, he would now have to be on the hook after insurance for less than $390 ($600-$210) for his research time to have been worth the effort.
It’s hard to make a decision that involves your finances when you don’t even know how much you will be charged for something. Would you buy a car if the salesman told you that you wouldn’t know the price until after you made the purchase?
Slowly, but surely, transparency is appearing within medicine. Direct primary care and it’s focus on simple, straight forward price structures is certainly at the forefront. All of my prices can be found on my website so that you can make any financial decisions prior to the visit. Other companies are using transparency as a solution and a business opportunity as well. GoodRx and Cheapcolonoscopy.com are two of these companies.
GoodRx has a phone app that allows users to search for medications and shows the lowest cost pharmacies based on your zip code. GoodRx is the priceline.com for medications. You, or your doctor, know what medication you need, now you just need to know where to go for the lowest price. GoodRx can help with this information and may save you money even if your insurance will pay for some of your medication. Sometimes your insurance copay for your medication is higher than what you would pay by using the GoodRx app.
Another company at the forefront of price transparency is http://cheapcolonoscopy.com/. They have created a marketplace for screening colonoscopies (the procedure to look for colon cancer before the cancer causes symptoms). In the past, it was difficult to gather accurate information for what a colonoscopy would cost. The gastroenterologist charges a fee, as does the anesthesiologist that sedates you and, if the procedure is done in a third party building, there is also a facility fee. Getting all parties to give you a set price was difficult. Cheapcolonoscopy.com com offers colonoscopies for $950 with board certified gastroenterologists/anesthesiologists in 59 cities in the US.
You will start to see more medical services offered for a fixed cash price in the future. Keep an eye out for them (or just sign up to receive my blog posts) because as companies compete for your dollar, you will receive better care for a lower cost.