I wrote Healthcare Is Making Me Sick to help people learn the rules of healthcare so they can regain control of how they experience the system. A friend of mine asked me: What made me feel that I had to write it?
The answer is two-pronged—partly from the financial side, and partly from the quality of life side. The common denominator between them, though, is that it comes down to maximizing your coverage and experience when it comes to insurance.
Allow me to explain both sides of this equation in more detail.
Medical Providers Are in Business
Let’s start with finances: if you get service from a doctor and don’t inquire about the course of treatment, the appropriateness of the treatment, and the cost, you’ll more than likely have a less than optimal experience. Physicians and hospitals are in BUSINESS. One of their goals is to grow their business as profitably as they can. If you’re a passive healthcare consumer, the number of tests, where the tests are performed, and who performs them will affect the financial outcome of your treatment—it’ll cost you more!
Now, consider if everyone else with that same policy takes the same approach; they simply keep paying whatever the bill says and, while they may grumble, they don’t give it a second thought. What, then, are those expenses going to do? They’ll go up.
If those expenses go up, the insurance company’s expenses go up. What is the insurance company (that’s in business like the hospitals and physicians) going to do to your premiums? They are going to go up, too. And this dynamic does not change if you’re on your employer’s sponsored health plan, buying from the public exchange, or buying insurance directly. There’s no incentive for providers or insurance companies to change if they’re not challenged. They both make more money as the costs go up and are, in effect, negotiating with each other over their goals versus yours. I know learning the ins and outs of the industry is time consuming, but the benefits are long term.
Do the Work to Find the Best Doctor
The other side of the equation is life quality. It seems obvious that you’d want the best doctors, right? Why wouldn’t you? Yet, in our society, we haven’t adopted the mentality that we should scrutinize doctors the way we would other service providers, as they’re all not created equal. After all, the last to graduate medical school is still a doctor.
To overcome this hurdle, we must start insisting on transparency by any means available to us, and that includes referrals. Referrals can come from anybody close to us, such as friends, other doctors, and even the carriers themselves. Use any tool at your disposal in order to find the best doctor for you. If you do, you’ll have a better outcome, which means you save money long-term and have a better quality of life.
By allowing the status quo to continue—which means not questioning our doctors and paying whatever they tell us to—we are all complicit. At the end of the day, when my friend asks me why I wrote my book, I tell him it’s because I can make a difference—and so can you. You can change the definition of an industry, even if it’s something as big as healthcare. Doing the same thing over and over and expecting a different outcome hasn’t worked, so why not try something new? That question begs another: How do you tackle two giant industries representing one-sixth of the economy?
Information is Key to Transparency
Information! Information will lead to knowledge, and as Sir Francis Bacon stated, “Knowledge is power.” One piece of information you need to know is the mark ups on common medical services versus the cost and the range of prices for that service.
A quick look at information out there on hospital markups provides some staggering numbers. According to a report from John Hopkins University, on average, hospitals mark up their cost 4.32 times and, in some cases, over six times.
That’s right—for a service that costs them $100, they are charging you between $432–$600. The study also found that “certain types of hospitals had higher markups. In government-run hospitals, the ratio was 3.47; in nonprofit hospitals, 3.79; and in for-profit hospitals, 6.31. System-affiliated hospitals had an average ratio of 4.76, versus 3.54 for independent hospitals, and hospitals with regional market power had an average ratio of 4.56, versus 4.16 for hospitals that lacked such clout—supporting the researchers’ finding that hospitals that can mark up prices will do so.”
This can also be found in medicines within hospitals. Hospitals mark up medicines an average 500 percent of their cost—and have a markup of 250 percent even after negotiations with insurance carriers. The confusion does not stop there. HCCI’s 2015 report, “National Chartbook on Health Care Prices” found there’s a wide range of prices for the same services at different hospitals. Prices vary by state and within states too.
Transparency Tools You Can Use
So, what are you to do? Healthcare prices are crazy! Fortunately, the world is changing. There are a growing number of transparency tools for every healthcare industry sector (doctors, hospitals, and drugs) that you can access. This will help you pull the curtain back on the Great Wizard of Oz of healthcare.
There are categories of transparency sites. The first is what I call qualitative sites. They provide useful information such as: areas of specialty, college education, hospital affiliation, ease of scheduling, staff responsiveness, patient level of trust, and amount of time spent with patient. These sites are useful in helping determine the type of relationship you might have with your doctor. Here are some popular options:
The second set of sites focus more on the quantitative, or outcome-based, aspects of the doctor’s care. For example, they examine items such as costs and how the doctor ranks against his/her peer set for a procedure. Does the doctor you’re reviewing perform more or fewer procedures than their peers? This is important. Remember Malcolm Gladwell’s position that the more you practice the better you are.
The following websites provide you access to healthcare transparency.
- Leapfroggroup.org: Leapfrog Hospital Safety Grade
- Hospital Patient Price List Information: (Look up each hospital’s published pricing list. Your pricing will vary based on your insurance.)
The Transparency Genie is Out of the Bottle
I haven’t found one single resource that has provided every answer or covered every area of the country yet, but these resources are growing, becoming more robust, and currently providing us more access to the real costs than we have ever had before. USE them. When comparing costs, look outside your area and see if your situation turns out like the knee replacement from Sacramento to Tucson or if your hospital has substandard records on the services you need covered.
If you’re on your employer’s health plan, ask to see if the health insurance carrier provides a price calculator and quality evaluation tool. If not, ask your employer to investigate offering one. Companies like Castlight, Amino Health, or Grand Rounds can be added, offering access to transparency. Remember, if you save yourself money, you save your employer money, too. They will direct you to the most cost-effective provider based on that carrier’s network and negotiated discounts.
When it comes to transparency, the genie is out of the bottle. If we seek it, demand it, and use it, there’s no way they (the industry) can put it back in.