Our priorities are way off. We fail to negotiate on healthcare but go crazy in other sitiations. We will nickel and dime a self-employed house painter who barely makes ends meet. Some of us will piledrive and stomp someone on Black Friday over a TV. But when it comes to healthcare, we just accept the price and move on. We dare not question an inflated bill from a hospital, whose bloated administrative staff ranks amongst the top one percent of earners – much unlike that hard-working house painter.
This behavior is having a perilous impact on our society. Healthcare costs are spiraling out of control and there is no end in sight. We have allowed many providers to evolve into regional monopolies with virtually no pushback. As consumers we have turned into a weak society of chattel who just pay the bill and shut up – and live with even poorer outcomes. And this has to stop. For the good of our country and for the good of the healthcare industry itself.
If we should be price shopping and haggling on anything, it is healthcare. Healthcare is expensive. Healthcare pricing is vague. Which means healthcare is EXACTLY the time and place to haggle.
It’s your money. They are taking it.
The root cause why we do not negotiate healthcare prices is threefold:
- People have ZERO CLUE how much of their own money they are losing
- People are COMPLETELY UNAWARE that they can negotiate, and how to do so, and
- People are TOTALLY FOOLED into thinking that their employer/insurer pays for their healthcare
Five Ways to get the Best Price for Healthcare
Summarized from https://www.patientrightsadvocate.org/howtoshop
Plan ahead: research the codes to know what is covered by your insurance and get an up-front estimate in writing (i.e. shop for bids just like you would a painter!).
Obtain a comparison price from a transparent provider like The Surgery Center of Oklahoma and ask your chosen provider to match their price.
Ask for the cash price up front, many times the cash price is lower and may even make sense depending upon where you are with your annual deductible.
Do not sign any financial documents in an emergency situation. Instead, sign “DID NOT READ.” Because when you sign with your signature you agree to their terms, which means whatever they decide to bill you. But, if you refuse to sign a financial agreement then you can negotiate a fair price after care has been received.
Insist your provider only use labs and providers that are in-network.
How Much Cash
Whether you have a low deductible plan or not, everyone should shop. The ROI can be insane. Generally, an hour or two of shopping can generate hundreds to thousands of dollars in savings.
Again, even if you have a $2,000 deductible, you should shop. What if a service should have cost $500 but instead, they billed you for $3,500? According to an excerpt in the book, “Never Pay the First Bill” by Marshall Allen, one medical bill examiner claimed that 80% of the bills she reviews have some sort of error. Errors happen all the time, and when you do the math, they just took you for $1,500 in the previous example. That’s plane tickets to and a hotel in Vegas. So ask yourself: if you want to lose money, where would you rather lose it? Vegas or the doctor’s office?
What if I told you that you could save $3500 in exchange for spending a few hours researching and making some phone calls? Is your time worth that much? In the book, “The Price we Pay” by Dr. Marty Makary, needed a non-emergency Achilles tendon procedure and had time to shop. He knew how to get pricing information and what the procedure in question should cost (just like tip 2 above, you can check a reference price). This patient decided to shop, and bargain hunt he did.
Hospital 1: $37,000 with a $5,000 deductible
Hospital 2: $1,500 (with the SAME doctor from Hospital 1, because he worked at both facilities)
By shopping he saved himself $3,500 out-of-pocket and saved the rest of us $32,000, which is the amount Hospital 1 would have passed along to the “system”. And by the system I mean in many cases your employer, i.e. YOU. Which means no one is getting raises! Again, it’s your money.
I am not kidding. This example happened, and it happens every minute of every day because most patients do not shop and unscrupulous hospitals take advantage of this fact.
Why People Don’t Price Shop
First, people do not price shop because they do not know that they can. But now that we have the five shopping techniques from our friends at Patient Rights Advocate, we don’t have an excuse not to. In follow-up articles we will take a deep dive into each of these five techniques and explore how to implement them.
Secondly, people don’t think it is worth their time, and that is because they do not realize how much money they can save. I concede, there is a long way to go in raising awareness on the examples of the savings. As people share more and more of their victory stories, others will follow as they see the potential ROI for themselves. That is why it is important for bloggers and activists to help get the word out. It is also critical that entrepreneurs create solutions to make it easier, more rewarding, and more social, to shop for healthcare.
Thirdly, people are stepping on their own toes with the false notion that they are not paying for their healthcare. Yet nothing could be further from the truth!
Why YOU Need to Start Acting like the Payer
Your “insurance” company is not the payer.
Your “employer” is not the payer.
You are. You. Are. The. Payer.
The insurance company and your employer are just middlemen. They collect money from YOUR paycheck and give it to the healthcare industry on your behalf. Your labor generated the money to pay for that premium.
When was the last time you got a raise? A real raise that not only reflected your increased value as an experienced contributor, but a raise that also beat inflation? Healthcare premiums, both paid by the employer and deducted from paychecks, have risen faster than wage growth and inflation over the last decade. That’s right, most people are actually making less than they used to and healthcare costs have a lot to do with that.
If you have ever hired people then you know that attracting and retaining the best people is always a challenge. Always. During good times and bad. If companies had resources to increase salaries, they would. But they can’t increase salaries because when they are constantly dealing with increasing healthcare costs. This is one of the reasons why wages and salaries have not risen remarkably over the last decade.
Want to learn more about why healthcare costs are rising? Check out these articles in a series called Why Healthcare is Almost 20% of GPD:
In sum, it’s your money. Your employer is pooling resources to purchase healthcare on your behalf and at scale. If your employer was not doing that, then that money would be going directly to you in the form of increased salary. Otherwise you’d find someplace else to work that would pay you more.
Key Takeaways
- Employees: you need to shop. It will save you money.
- Employers: you need to incentivize your employees to shop, it will save you money.
- All of us: we need to shop and we need to share our stories.
In our next article we are going to discuss how to plan ahead and arm yourself with information to save yourself a lot of money on healthcare. In the meantime, I urge you to think about what you could do with a 5-10% raise. Because that’s how much, if not more, is being taken from you via our bloated healthcare system.