Herb Ruhs wrote:
> Well love it or leave, eh Gary. At least someone is happy with the way
> things are turning out.
I think that we need to apply MORE free market principles into the health care
"market."
See below . . .
Wall Street Journal
February 8, 2002
Patients Find Success Haggling As Health-Care Costs Climb
By DANIEL COSTELLO
Staff Reporter of THE WALL STREET JOURNAL
John Reidelbach was pretty sore after some recent hospital surgery,
thanks to a really huge bill. But instead of just paying up, the Atlanta
business consultant tried asking for a discount.
To his surprise, he got one. "I said I'd pay part of it right then or all of
it over the next few years," says Mr. Reidelbach, who got $950 knocked off
the $1,900 bill. "I guess they were in a hurry for the money."
In small but growing numbers, Americans
are taking an
innovative approach to controlling
health-care costs: They're
haggling with their doctors. Fed up with
mounting health bills,
consumers are getting as much as 30% off
everything from
eye exams to fertility procedures just
by agreeing to pay
upfront. Others are holding their
doctors over a barrel by
waiting a few months to pay the bill.
Already, a new cottage
industry of middlemen who negotiate
health-care bills for
patients report their haggling business is up as much as 25% in the last two
years.
Most of the new bargaining is being driven by health-care costs, of course,
which even in this down economy are expected to rise more than 10% this year.
But employers are behind this, too. Along with increasing insurance deductibles,
many are introducing "lump sum" plans that cap how much a worker can spend on
health care. Add it all up, and there's more pressure on employees to bargain.
"Haggling with doctors may sound bizarre, but people can't afford to just keep
paying more," says Arthur Levin, director of the Center for Medical Consumers in
New York. Plus, "When you know your doctor has a big house and a boat, what's
the harm?"
Not that there aren't risks to trying to strike a deal. While the American
Medical Association says it believes doctors should be able to adjust their
fees, experts worry that people too shy to haggle could get left out in the
cold, or worse, pay higher rates down the road. Others say negotiating with your
doctor might upset the natural patient-physician rapport. Another concern:
Patients, or even doctors, will shortchange care for a price break. "It's bound
to happen," says Dr. Vincent Riccardi, an internist in La Crescenta, Calif., who
nonetheless has haggled with his patients.
Indeed, Marie Tzivas thinks she bought herself some bad bedside manner when
she recently negotiated a deal with her fertility doctor. After one unsuccessful
$17,000 in-vitro treatment, the 39-year-old New York homemaker told her doctor
she "wasn't Celine Dion" and couldn't afford to pay retail again. He agreed to
knock 20% off each of her next two procedures, but soon Mrs. Tzivas felt the
doctor was rushing through appointments. At times, "he was rude," she says. Her
doctor, Zev Rosenwaks, denies that: "99.9% of my patients are happy, and I'm
sorry she wasn't," he says, adding that he only offers discounts in special
cases.
Gaining Momentum
Of course, people have been haggling for years over the costs of things
insurance doesn't usually pay for, such as plastic surgery and psychotherapy.
But only a tiny percentage of patients ever asked for price breaks. They were
even less likely to do so once HMOs and flat co-payments became so common in the
early '90s. Now, though, the practice is gaining new momentum, with patients
negotiating either on the initial bill or on their out-of-pocket costs after
insurance payments. In fact, according to a recent Harris poll, 17% of consumers
asked for a discount on a medical bill in the past year.
More
importantly, almost half
say they
succeeded. That's
partly because
there's more
flexibility in
medical costs than
many people
realize. Most
doctors, for
example, still
charge way more
than
Medicare's
reimbursement.
While they
argue that those
fees don't come
close to
covering their
costs, critics say
the disparity
is one sign of how
much inflation
is going on. Case
in point: Many
doctors charge
about $100 for
a general office
exam, but
Medicare only reimburses $25.
For Paul Easton, who is uninsured, paying retail to find out what was wrong
with his back seemed
absurd. Because the procedure involved an MRI, a visit to the radiologist and
a trip to his primary care doctor, the Baltimore resident aimed for a bulk
discount. He talked to all the doctors involved, insisted on an upfront total
fee, agreed to pay before the procedure and got $600 knocked off a $1,050 bill.
"Goes to show that it never hurts to ask," says Mr. Easton.
While there aren't national statistics on how many doctors are willing to
negotiate, experts say specialists seem to be doing it the most -- because they
tend to charge more in the first place. What's more, even hospitals are starting
to come up with their own policies on the matter. In Columbus, Ga., for example,
Hughston Sports Medicine Hospital now offers discounts on a case-by-case basis.
Emory Peachtree Regional Hospital in Atlanta, meanwhile, has seen enough new
hagglers that it now accepts down payments in exchange for as much as 30% off
the price of a bill. "If we get a down payment that at least covers our costs,
it's better than nothing," says Ken Matteauer, the hospital's comptroller.
To be sure,
haggling is still
hardly
mainstream. Some
physicians
won't even talk
about the
practice, fearing more
patients will
ask for deals.
Others feel the
discounts will
just cost them
too much --
especially
given that their
salaries have
actually fallen in
real terms over
the past decade,
giving them
less room to
negotiate.
Another concern?
That insurance
companies will
find out about
the
behind-the-scenes price-cutting
and downgrade
reimbursement
fees for all
patients. "This is
what they're
all really worried
about," says
Randal Schultz, a
Kansas City, Mo., health-care lawyer.
And then there's the whole issue of what sort of markdown to offer in the
first place. After all, unlike retailers, few health-care providers have
experience with discounting. "There is no system to this health-care system. It
doesn't make sense," says Megan McAndrew Cooper, editor of the Dartmouth
Atlas of Healthcare.
If anything, the lack of rhyme or reason in pricing creates a free-market
atmosphere in which consumers feel empowered to bargain. And the incentives are
only expected to grow as more companies move toward "self directed" health-care
plans where patients are given a lump sum of about $2,000 to $3,000 to spend as
they want on medical costs. While less than a million people are currently
enrolled in such programs, one recent study says 30% of larger companies could
begin offering them in the next five years.
Free-Market Financing
How far will haggling go? While it's mostly grass-roots for now, the movement
could gain momentum
from a new source: professional agents. Dubbed health-care advocates, these
outfits -- often staffed with doctors -- will wrestle deals out of other
doctors. Healthcare Advocates of Philadelphia, for one, charges up to $200 to
help clients and says this business is up 25%. "It was the best $150 I have ever
spent," says Stephanie Bichara, of Mt. Laurel, N.J., who hired the company after
getting a pricey tab for dental surgery.
Of course, if none of those routes work, there's always the old-fashioned way
of getting a good deal: get angry. Last summer, Jennifer Haugen had the
quintessential bad doctor day -- an hour wait and three botched needle pricks,
followed by just three minutes with the doctor. Furious, she complained to
everyone from the office manager to her doctor -- and came away with two free
office visits.
"I never yelled," says the 22-year-old Everett, Wash., student. "But I think
they knew how mad I was."
--
Gary M. on LI
Volunteer Your PC for Cancer Research @
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