Transcript Seeking the Best Medical Prices

Seeking the Best Medical Prices
By WALECIA KONRAD
Published: November 27, 2009
http://www.nytimes.com/2009/11/28/health/28patient.html?hpw
Comparison Shopping?
• Health care consumers are encouraged to comparisonshop on things like doctor’s fees and heart surgery rates.
But unfortunately, most of us have little clear or useful
information to go shopping with.
• “When you go to the doctor, how much you fork over when
all is said and done is often just a mystery,” said Dr.
Anthony P. Geraci, a Manhattan neurologist who is trying
to buck that trend by posting his prices on his Web site.
• With the growing number of uninsured people, the
increase in high-deductible insurance plans and big jumps
in co-payments, just about everybody is paying more out
of pocket for health care nowadays. An estimated 15
percent of adults younger than 65 now pay with their own
money medical costs greater than 5 percent of their
annual household income, according to the Center for
Studying Health System Change, a nonpartisan research
group in Washington.
Routine Exam?
• Katie Kyser, 30, the mother of a year-old daughter, lives
north of Seattle. She and her husband, Jason, who
works in construction, recently moved from California.
They have no health insurance, so they pay all costs out
of pocket.
• When Ms. Kyser needed a routine gynecological exam,
she called a handful of local doctors, all of whom were
charging $200 or more. “There’s no way we could pay
that,” Ms. Kyser said. “I had to find another way.”
• Having seen an ad for PriceDoc.com, a new Web site
that lists doctors throughout the country who are willing
to post their prices and negotiate with patients, she
decided to try it. Ms. Kyser found a nearby clinic where
doctors charged only $75 for the exam.
Medical Pricing a Quagmire
• Medical pricing is a quagmire, oozing with jargon and
current procedural terminology codes. Just look, if you
dare, at your latest “explanation of benefits” from your
insurer.
• What’s more, rarely is there one standard price for a
medical treatment. Prices vary based on geography and
type of provider — whether hospital, stand-alone clinic or
any alternative.
• Then, doctors, hospitals and other providers may
negotiate different rates with different insurers. It is not
unusual for a provider to have 10 or more different prices
for the same procedure, depending on who is paying.
Providers often charge a completely different rate for
people paying on their own, which is almost always
much more expensive than the discounted rate that
insurers pay.
The Economics
• What gives a firm
market power?
– Lack of a substitute!
• Market price is
related to the
elasticity of demand.
• What happens to
quantity if you raise
price?
P
Q
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