Go to any store in the U.S. and chances are the prices of all the items for sale are prominently displayed. If not, ask the clerk and you'll quickly find out. Need a cell phone? Monthly charges and plan designs are always disclosed before you buy. Visiting the local auto mechanic? He's required to give you a written estimate before he begins his work. Buying a gallon of milk? The price is right there on the shelf.
But walk into a Doctor's office and ask the price of an x-ray and you will get an entirely different experience. If you have health insurance, chances are the answer from the receptionist will be "we don't know how much the x-ray is. First we have to do the x-ray. Once we're done, we'll submit a claim to the health insurance company. Then they'll tell us how much the x-ray was, if you owe anything, and how much to charge you."
Why are Medical Bills handled so differently? Would we tolerate this with any other industry or business?
The cost of Healthcare in the U.S. is skyrocketing and is on pace to bankrupt our country. But how can anyone begin to control cost when the Doctor's office and the patient don't know what the cost is until after the fact? In essence, the current billing methods used pose a threat to the stability of our healthcare system as well as our economy as a whole. It needs to be fixed, and Healthcare Reform in its current form doesn't do enough to fix it.
So why doesn't the patient or the Doctor's office know what the bill will be until after the patient receives treatment? It has to do with the prices each health insurance company negotiates with each Physician. Like any other business, Health Insurance Companies are constantly working to lower their expenses. It's how they keep their products priced competitively and their profit margins healthy. On the surface, this falls in line with common business practices and makes complete sense. After all, Doctors want to charge as much as they can. Health Insurance Companies want to pay the least amount possible. They balance themselves out, right?
But walk into a Doctor's office and ask the price of an x-ray and you will get an entirely different experience. If you have health insurance, chances are the answer from the receptionist will be "we don't know how much the x-ray is. First we have to do the x-ray. Once we're done, we'll submit a claim to the health insurance company. Then they'll tell us how much the x-ray was, if you owe anything, and how much to charge you."
Why are Medical Bills handled so differently? Would we tolerate this with any other industry or business?
The cost of Healthcare in the U.S. is skyrocketing and is on pace to bankrupt our country. But how can anyone begin to control cost when the Doctor's office and the patient don't know what the cost is until after the fact? In essence, the current billing methods used pose a threat to the stability of our healthcare system as well as our economy as a whole. It needs to be fixed, and Healthcare Reform in its current form doesn't do enough to fix it.
So why doesn't the patient or the Doctor's office know what the bill will be until after the patient receives treatment? It has to do with the prices each health insurance company negotiates with each Physician. Like any other business, Health Insurance Companies are constantly working to lower their expenses. It's how they keep their products priced competitively and their profit margins healthy. On the surface, this falls in line with common business practices and makes complete sense. After all, Doctors want to charge as much as they can. Health Insurance Companies want to pay the least amount possible. They balance themselves out, right?
Obviously, Health Insurance Companies are reluctant to share their unique, negotiated pricing with anyone because full disclosure would compromise their competitive edge. Unfortunately as a result, the Patient is poorly informed on the cost associated with the Doctor's services. Ultimately, the Physician is given free rein to do what he likes, with little or no input from the patient. If the patient can't afford the surprise bill received in the mail some thirty days later, the Doctor writes it off as a loss and charges more somewhere else, also known as cost shifting.
So what's the solution?
For starters, our economy is deeply rooted in free enterprise. We've decided long ago that we're not going to dictate how much a private business can charge. That includes Doctors, Hospitals, Labs and other providers.
We can however create a level playing field and full transparency.
If a Doctor wants to charge $100 for an x-ray, that's perfectly ok. But it has to be $100 across the board. It shouldn't matter whether you have Medicare, Medicaid, private health insurance or no health insurance at all. The price is what it is and everyone knows what it is up front. It's then left up to each Health Insurance company to decide whether or not they will work with that Provider and how much they are willing to pay for that service, allowing the free market to work it out in a balanced and fair way.
Combined with a clearly visible menu of services as well as a solid understanding of how much their health insurance company will pay, the patient can then consult with their Doctor and make more fully informed decisions on how to proceed, well in advance of receiving treatment.
Dorin M Adika is an Insurance Professional in the State of Florida. In additional to his many consumer driven websites, he also owns and operates Door In Insurance, LLC, an insurance wholesale firm that provides insurance products to insurance professionals. His websites include: http://www.CheapMedicalInsuranceUSA.com and http://www.ShortTermHealthUSA.com
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