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March
13, 2006
Vol. 2, Issue 3
How
to Reduce Your Hospital Bills
The
medical industry, unlike virtually every other business,
loves to keep their prices secret. They do this, very
simply, so they can make more money. Only by shopping
your medical care, demanding price transparency, negotiating
for the best price, and carefully reviewing your bill
can you be assured that you are getting a fair price,
and not being ripped off.
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Price
Variation
The
Valley Hospital Medical Center in Las Vegas, Nevada charges
$233,259 for open heart surgery involving a heart valve replacement.
The Mayo Clinic, recognized as one of the top heart care centers
in the world, charges $79,601 for the same procedure. As another
example, The Miami Herald recently published an article about
hospital pricing in Florida. A woman going to Palmetto General
Hospital in Hialeah for physical therapy following a car accident
had tried to find out what the treatment would cost her, but
to little avail. After eleven sessions she started receiving
the bills - $1,560 per visit. She was able to find the same
service at Memorial Regional hospital in Hollywood, FL for
only $50 per visit.
The
great promise of Health Savings Accounts is the potential
they have to inject price transparency and price competition
into the medical marketplace. By demanding to know prices
up front, HSA holders will force medical providers to compete
on price and quality, just like any other business does.
Hospital
Overcharges
Anyone
who has ever tried to decipher a hospital bill knows that
they can be next to impossible to understand. This conveniently
makes it easy for hospitals to hide improper charges by using
mysterious medical technology and codes. Whether through deliberate
overcharges or honest errors, experts estimate that hospitals
overcharge patients by $10 billion a year, or an average of
$1,300 per hospital stay.
Hospitals
have been known to charge $129 for a "mucus recovery
system" that was really a $2 box of tissues, $57.50 for
a "free" teddy bear, and even $1,004 for a toothbrush.
Most people never see an itemized statement, and so have no
idea what they're being charged for.
Nora
Johnson, a medical billing advocate, was quoted in a recent
article saying that over 90% of the hospitals bills that she
has audited have had gross overcharges.
How
To Avoid Overcharges
Hospitals
often go to extraordinary lengths to discourage you from delving
too much into your bill. Nevertheless, there are some specific
things you can do to make sure you're not getting taken
for a ride.
- If
possible, call the hospital's billing department ahead
of time and ask them what you will be charged for a room
and what that charge includes. If it doesn't include
something you might need, such as tissues, bring your own.
- Ask
your doctor to estimate your cost of treatment.
- Bring
your own prescription medications to avoid paying top price
for medications purchased from the hospital.
- If
possible, keep your own lists of tests, medications, and
treatments. Hospitals have been known to charge men for
pregnancy tests and adults for newborn tests.
- Never
pay the bill before leaving the hospital. You may be told
this is required, but it is not. Before paying your bill
read it carefully, and compare it to the estimated costs
you were given before being admitted.
- Demand
an itemized bill, and ask for a detailed explanation for
any items you don't understand. Don't accept generic
answers like "lab fees" or "miscellaneous
fees".
Bill
Review and Settlement Services
Since
very few people actually know what the lowest wholesale price
available from the medical provider actually is, you may want
to have a professional review service check out your bill.
HSA for America
has secured for our readers a free membership with Insnet. This is a company that will provide
an independent review of your out-of-pocket medical bills
to ensure that you are paying the lowest wholesale rate that
the medical provider offers.
For
any medical bill over $200, Insnet will act as
your negotiator, at no charge to you. Third party administrators,
HMOs, and large companies routinely negotiate with hospitals
in order to get the lowest price available. This company makes
that available to the individual consumer. If they can save
you some money, they take 30% of the savings as their fee
- you get the rest. (This special offer is only available to Maximize Your HSA readers.) If they cannot reduce your bill,
there is no charge.
I
used this service last summer when I had my appendix removed.
When a hospital bill is submitted to an insurance company,
the bill is routinely reduced by the insurance company's wholesale
reimbursement contract. After this discount, I had hospital
and doctor charges totaling $3,228.56. Upon giving My Medical
Control authorization to negotiate my bill, they were able
to negotiate additional savings, reducing my bill to $3,027.05.
They kept $70.13 of the savings as a fee for their services,
and I was able to save $130.98. (Not a huge savings, but not
bad for something that took about 5 minutes of my time).
Supply
and Demand
The
great promise of health savings accounts is that they will
re-inject market competition into the healthcare market. As
all of us who were fortunate enough to take Economics 101
understand, the balance of supply and demand provides the
public with the greatest value at the lowest possible cost.
If company B can produce and distribute the same quality widgets
as company A, but at a lower cost, then the average price
of widgets will fall, more people will be able to afford more
widgets, and the average quality of a widget will increase,
as businesses compete for customers.
This
is a wonderful system, and is part of what has made the United
States the wealthiest country in the world. Unfortunately,
this system has not been in play when it comes to healthcare,
because the consumer has not typically been paying the bill.
As a result, the consumer doesn't care what the service costs,
and most doctors, hospitals, and pharmacies are very reluctant
to reveal their (high) prices.
HSAs
are changing all that. By being proactive and demanding price
transparency and billing integrity, you will not only lower
your own medical expenses, but you'll help change the system
for the better.
If
you still do not have an HSA plan, you can lower your taxes
and premiums by switching now. Instant quotes and online applications
are available on our website, www.HSAforAmerica.com.
Every month you delay reduces your maximum contribution (and
tax deduction) for 2006. If you would like to consult with
us before choosing a plan, you may schedule a personal
consultation.
To your
health and wealth,
Wiley
Long
President - HSA
for America
P.S. Thank you for all the positive feedback about this newsletter,
and for forwarding it to your friends and colleagues. Please
continue to let me know what you like, or don't like. Next
month I'll discuss how you can reduce your out-of-pocket exposure
for accidents to only $100, even if you carry a high-deductible
HSA plan.
Subscribe
to Maximize Your HSA
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