Medicine’s Dirty Little Secret – Part 1

I recently read this article on NPR which featured Dani Yuengling, a woman who lives in Conway, SC, who received an unexpected bill for a breast biopsy that she had done at Grand Strand Medical Center. It inspired me to write this two-part “Dirty Little Secret” blog series. In the first entry in the series, I will explore several interesting take-away points from the article:

1) The hospital charged Ms. Yuengling’s insurance company FIVE times what it would have expected to be paid by Medicare.

• I don’t think that hospitals charge different amounts to different insurance companies, but the amount that they expect to be paid differs dramatically! Medicare’s lower rates are why many doctor’s offices stop taking new patients who have Medicare, but continue to accept new patients who have “commercial” insurance (Blue Cross Blue Shield is an example of a commercial insurer). Hospitals have negotiated higher payment rates from commercial insurers as compared to Medicare. That means that the part that you owe as the patient is often higher as well if you have commercial insurance.

2) Grand Strand Medical Center’s price was higher than other local hospitals would have charged.

• The moral here is to shop around. The problem is that you are often locked in to having a procedure done at a certain hospital system because your surgeon may have privileges with one hospital system. It doesn’t hurt to ask if they have privileges at another surgical facility, especially one that is not affiliated with a large hospital system. When I order imaging studies (x-rays, CTs, MRIs, etc.) I try to schedule them at independent imaging centers in the Columbia area like Clermont Radiology, Advanced Diagnostics or Palmetto Imaging because their prices are usually less than at our local hospitals.

3) Ms. Yuengling was billed for thousands more than the online hospital calculator estimated her cost would be.

• This happened to me once as well. I had a procedure and was charged $1000 more than the hospital estimated my cost would be before I had the procedure. This is obviously unfair and I’m surprised this is lawfully allowed to happen. According to the article, after the “No Surprises Act” became effective a few months ago, you should now be able to ask for an “Advanced Explanation of Benefits” from your insurance company. The problem with the No Surprises Act is that YOU as the patient have to do a lot of extra, often frustrating work!

4) Ms. Yuengling’s final bill (after insurance paid the hospital) was at least $1500 higher than what she would have been charged if she had paid cash.

• We have finally arrived at the Dirty Little Secret of the medical field! Paying cash often times drives down the cost of care. However, you have to know that you can ask for a discount when paying cash and then negotiate the price. Even if you’ve received a bill already and have not used your insurance, you can call to negotiate. One myth I’ve heard hospitals and pharmacies tell patients is that if you have health insurance you must use it. This is false! However, the cash price for someone who has insurance and chooses not to use it could be different than someone who does not have insurance at all. What a racket!

My favorite explanation of hospital pricing comes from a show called “Adam Ruins Everything” You can watch the 5-minute video here: https://www.youtube.com/watch?v=CeDOQpfaUc8
Stay tuned for Part 2!