When you visit the doctor, pay your copay, pay your coinsurance, and after the visit you receive the “this is not a bill” explanation of benefits, is the process clear? It’s often difficult to understand for various reasons — the most common reason could be that our healthcare system is incredibly complex. In addition, treating the human body isn’t simple like running a diagnostic on your car and replacing faulty parts.
Healthcare costs and where the dollar is spent are confusing mysteries. Prices for services are inconsistent (not standard) among different physicians of the same specialty in the same geographic area and between different care locations (e.g., ambulatory surgery centers/ASC versus hospitals). For example, a 2014 GAO report compared the total cost of various surgeries between ASCs and hospital outpatient facilities. Laparoscopic gallbladder surgery average total cost in an ASC was $7,109 versus $29,410 in a hospital. And a colonoscopy average total cost was $1,438 versus $4,250. There are reasons for these differences which include a higher facility fee for hospitals given the increased cost of maintaining a large infrastructure. However, it also suggests that “some” procedures/surgeries truly belong in an ASC and some belong in a hospital. As a patient, customer, and consumer, you should ask for services to be provided in the most appropriate location (high quality and reasonable cost). Furthermore, when patients are surveyed, there are many ideas about where the dollar is spent. In reality, about 87% of insurance costs are benefits paid out for patient care services and the remaining 13% are administrative costs and profits. And for every “out-of-pocket” dollar you spend as a patient, approximately 40 cents goes toward physician services of which 25 cents pays overhead. The other 60 cents pays for inpatient hospital costs (10 cents), outpatient costs (25 cents), prescription drugs (10 cents), administrative costs (10 cents), and other medical expenses (5 cents).
When you call for an appointment, have you ever wondered, “How much is this going to cost?”
Unfortunately, the answer is, “it depends.” If you’re making a clinic (outpatient) appointment to see your doctor for a new problem or a follow-up, it’s very difficult for the practice to provide a cost or an estimate in advance. Why? The simple answer is there are too many unknowns. It’s extremely common for patients to schedule an appointment for a specific complaint/issue and during the visit, the list grows. In addition, the doctor cannot be certain about the tests needed or the appropriate treatment plan until you are seen. And the practice’s front office and billing department must confirm your demographic and insurance information and they must contact your insurance company to confirm eligibility, coinsurance, and deductible status. Finally, a 100% complete record of your visit is needed from the doctor so the claim can be submitted to your insurance company. Until the insurance company processes the claim, all amounts are nothing but very rough estimates. Therefore, with so many unknowns, it’s extremely difficult for a practice to estimate your costs up-front.
Also, if you’re making a clinic appointment for a wellness or preventative appointment, “it depends again.” This is a question to ask your insurance company since coverage for these services varies – some are free without a copay and some services are covered and others are not.
On the other hand, if your appointment is for a procedure or surgery, the practice should be able to provide you with an estimate in advance – just ask. When this type of service is ordered by your doctor, the record is complete and the code(s) needed to identify the procedure or surgery is available. Can you “shop” for a location? In many cases, you can but it’s dependent on where your doctor is able to perform the procedure or surgery (doctors must apply and be credentialed/approved to provide services at each location). Once you decide on a location, the practice will engage your insurance company to get their authorization to perform the procedure or surgery. When the practice contacts you to schedule the appointment, you should ask for an estimate before agreeing to the appointment. Generally, practices cannot negotiate with patients on price since some parts of the cost are separate from the doctor (e.g., facility, ancillary, anesthesia fees) and contractual arrangements between the practice and insurance companies preclude negotiation. Also, you can ask the practice for the procedure or surgery code(s) and you can contact the insurance company directly. Some insurance companies might be hesitant to provide this information, so be persistent. However, like the clinic appointment, until the practice submits a claim to your insurance company and it is processed, all amounts are estimates.
You are the patient, consumer, and customer. You are the most important part of the healthcare system; without you, we wouldn’t need hospitals, ASCs, clinics, or medical professionals. Therefore, you should ask questions of your doctor and his/her staff, your insurance company, and research answers online – become an active and educated participant in the healthcare process – after all, it’s your wallet.