As health care costs rise, many consumers and employers are choosing to go with high-deductible health insurance policies. These policies provide lower monthly premiums in exchange for higher out-of-pocket contributions for individual medical procedures.
Ideally, consumers with high-deductible health insurance plans would be able to shop around to minimize their out-of-pocket expenses. Unfortunately, it can be surprisingly difficult in California to get an accurate picture of how much a medical procedure will cost.
In 2006, California passed a law requiring hospitals to publish their average charges for common medical procedures on the website of the Office of Statewide Health Planning & Development. However, this data rarely reflects the true costs of the procedures. For example, insurance companies almost always negotiate reduced rates. Plus, the listed charges almost never include the hourly costs that patients must pay to doctors, anesthetists and other professionals.
Since this data is unreliable — and since many Californians aren’t even aware that it exists — consumers who want to do price comparisons on health care procedures usually end up calling hospitals to get quotes.
This strategy tends to be similarly ineffective. Most hospitals don’t list rates on their own websites, and the people who answer the phone rarely have all the information necessary to give prospective patients accurate quotes. Some require consumers to select procedures from confounding lists of billing codes.
Comparison Shopping Saves Money
This difficulty comes at a time when price comparison is more important than ever. Since 2002, the out-of-pocket costs paid by patients with employer-sponsored insurance plans have more than doubled, while the median household income has fallen by 4 percent.
Price comparison could save a lot of money. A recent report from the market-research division of Thomson Reuters showed that Americans with employer-sponsored health care coverage could save about $36 billion annually by finding the best deals on more than 300 common procedures.
Yet it appears that many Californians don’t do price comparisons, perhaps because it is such a daunting task. In a recent survey by the California HealthCare Foundation, only 26 percent of responders reported that they had tried to ascertain the pricing of medical procedures in advance. Less than a third of them looked for that information online.
Price comparison can save money for consumers and insurance companies alike. However, unless the state and health care providers can work together to make cost information more accessible, it is unlikely that the ranks of comparison shoppers will grow.