Imagine the following scenario in which I am having a conversation with my auto mechanic.
Mechanic: You know, your car is at the age where it really should have this test.
Me: Is this really necessary?
Mechanic: Well, if you don't have it, and there's a problem with your car's engine, by the time you notice a problem it may be too late to fix it. I really recommend that you have us do the test.
Me (reluctantly): Okay...Any idea of what it'll cost?
Mechanic: Hmm...not sure about that. We'll have to check with your credit card company and get back to you.
Mechanic: Well, you'll probably use a credit card to pay, right? So we need to check with your credit card company.
(Three days later, the mechanic calls me back.)
Me: So, what is this test going to cost me?
Mechanic: I'm sorry, but your credit card company couldn't tell us, either.
Me: But...I'm going to end up paying for this test that you say I should have. No one can tell me before the test what it'll cost?
Mechanic: That's correct. I'm sorry. Would you like to schedule the test now?
Now, raise your hand if you think that scenario was ludicrous. How could a service provider not be able to tell the buyer what the service will cost? Nevertheless, substitute the words "doctor's office" for "mechanic," "body" for "car," and "insurance company" for "credit card company," and you have the essence of an experience I had earlier this year.
Without getting too detailed about it, last year my age started to begin with the number 5, and one's reward for that is a recommendation from one's doctor that one get a certain test involving one's posterior. Good times.
I happen to have a high-deductible health insurance plan, coupled with a health savings account. This meant that said HSA would be funding much of the cost of this test. Consequently, the price tag was of more than passing interest to me, and I called the physician's office to ask how bad the sticker shock would be. The person I spoke with said she would have to check with my insurance company, which she did. Unfortunately, even after checking with them, she still didn't know.
There are some surprises I like and others I do not. Large bills fall into the latter category. I contacted the physician's office so that I wouldn't get that surprise, and they were unable to tell me the cost of the test I was buying.
So what did this little test end up costing? Well, there was good news and bad news. Under both New York State insurance law and the federal health care reform law, insurance companies must cover these sorts of preventative procedures in full. The doctor who performed the test is in my plan's network. According to the Explanation of Benefits form the plan sent me, he charged $790, they allowed $267.40, and they paid that amount. I was not responsible for any of that cost. So far, so good.
However, this is the sort of test for which the patient is placed under anesthesia (and the patient wouldn't have it any other way, believe me.) The anesthesiologist has his own charges, and New York and federal law don't say anything about insurers having to pay for that. The guy who sent me to my happy place charged $450, the insurer allowed $390, and all $390 was applied to my deductible. Therefore, the answer to the question I so naively asked ahead of time (how much will this test run me?) was $390. And, because no one could tell me this in advance, the amount shown on the bill came as a surprise.
This, my friends, is nuts. If you've followed this blog for some time, you know that I have an interest in the economics of health care, particularly as to how the federal health care reform law will change it. I therefore do a lot of reading on the subject, and if I've read it once, I've read it a hundred times: One reason why health care cost so much as that we patients are insulated from the cost. Of course we'll overuse the health care system, what with our $20 co-pays. We'll be more careful health care consumers if we have "skin in the game." We have to shop for health care services to ensure that we're getting value for our dollars, we have to be educated, we have to ask questions, yada yada yada.
Guess what? My family has to ring up $4,000 in allowed charges each year before my coverage kicks in (unless its for preventative measures like this test.) I have skin in the game. I asked the questions. A fundamental part of shopping is finding out the price of a product or service before you buy it. I tried to do that. And no one could tell me until after the service had been delivered.
There are people who over-use the health care system because they have low co-pays. I know a few of them. However, a) I doubt that they make up the majority -- going to the doctor or the emergency room is still quite inconvenient; and b) statistics show that at least 25 percent of annual Medicare spending is on people in the last year of their lives. If we all became Walmart shoppers for health care tomorrow, the very sickest people, those in the last days of their lives, would still consume a lot of health care and put upward pressure on costs.
Nevertheless, for those of us fortunate enough to not be terminally ill, asking questions about cost makes sense. Or it would if someone could give us answers. Until there is something approaching good pricing information available to patients before there's an emergency, the talk about us becoming good health consumers is just talk. I can think of no other expensive purchase I make where I don't know the cost ahead of time.
It's no way to run an auto repair operation, and it's no way to run a health care system.