The price of your next colonoscopy might just depend on where you park your car. The same procedure can vary greatly – even if you use the same doctor – from one medical setting to the next.
Get a colonoscopy at a GI center, and it could cost $600. But take your procedure to a hospital, and the same screening could cost up to $5,400 – eight times more!
Doctors aren’t making more money off your procedure. Instead, facility fees are the root of large differentials for identical procedures. Multi-building medical hospitals have enormous overheads. They also invest heavily in expensive technology and machines to diagnose and treat a wide array of illnesses and traumas. Hospitals are wonderful places to get care when you are critically sick. But when you need routine screenings or tests – they often aren’t efficient nor economical.
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In recent decades, various types of alternative care centers have opened, specializing in specific procedures and tests. These centers offer care that’s similar in quality to hospitals – but without the large facility pricing. I’m talking about dialysis centers that have moved out of hospital wards and into strip malls. The price difference: dialysis centers charge $500 – whereas treatment at a hospital costs $9,900. Similarly, imaging centers can offer patients an MRI for $125, compared to the same scan costing $5,000 at a hospital.
Driving down the road saves real money. Yet, not enough people know about these savings – nor are they incentivized to shop. Insurance insulates people from knowing – and in some cases, caring. High deductible health plans (HDHPs) are changing that.
According to a recent PwC report, one in four employees are enrolled in a HDHP. And that trend will continue as employers look to reduce spending on health benefits. HDHPs keep premiums low, but consumers need to dip into their pockets to meet steep deductibles and out-of-pocket limits. For 2015 policies, the average bronze-level plan on the market exchange has a deductible of $5,181 for individuals. And a family can spend nearly $13,000 before their benefits kick in.
While some fear that high deductibles will dampen utilization, increased cost will ultimately lead to deliberate consumption of health care. In other words, health care shopping. The retail economics – browsing, comparing, incentivizing and couponing – will become part of the new normal shopping experience for patients.
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At the Abarca Forward conference earlier this year, George Van Antwerp, managing director at Deloitte, discussed how social determinants of health and a personalized member experience can improve medication adherence and health outcomes.
The result will be non-emergency patients bypassing the emergency room to get better care at a lower cost – right down the road. This shift to care facilities that are less wasteful and more efficient is a win for everyone. Hospitals will be able to focus on treating the most serious patients. Medical clinics will reduce costs and improve outcomes through frequency. And consumers will be able to manage their financial and medical wellbeing, non-exclusive of each other.
