Seeking the Best Medical Prices

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Seeking the Best Medical Prices

• By WALECIA KONRAD
• Published November 27, 2009

http//www.nytimes.com/2009/11/28/health/28patient
.html?hpw
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Comparison Shopping?

• Health care consumers are encouraged to
  comparison-shop on things like doctors fees and
  heart surgery rates. But unfortunately, most of
  us have little clear or useful information to go
  shopping with.
• When you go to the doctor, how much you fork
  over when all is said and done is often just a
  mystery, said Dr. Anthony P. Geraci, a Manhattan
  neurologist who is trying to buck that trend by
  posting his prices on his Web site.
• With the growing number of uninsured people, the
  increase in high-deductible insurance plans and
  big jumps in co-payments, just about everybody is
  paying more out of pocket for health care
  nowadays. An estimated 15 percent of adults
  younger than 65 now pay with their own money
  medical costs greater than 5 percent of their
  annual household income, according to the Center
  for Studying Health System Change, a nonpartisan
  research group in Washington.

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Routine Exam?

• Katie Kyser, 30, the mother of a year-old
  daughter, lives north of Seattle. She and her
  husband, Jason, who works in construction,
  recently moved from California. They have no
  health insurance, so they pay all costs out of
  pocket.
• When Ms. Kyser needed a routine gynecological
  exam, she called a handful of local doctors, all
  of whom were charging 200 or more. Theres no
  way we could pay that, Ms. Kyser said. I had to
  find another way.
• Having seen an ad for PriceDoc.com, a new Web
  site that lists doctors throughout the country
  who are willing to post their prices and
  negotiate with patients, she decided to try it.
  Ms. Kyser found a nearby clinic where doctors
  charged only 75 for the exam.

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Medical Pricing a Quagmire

• Medical pricing is a quagmire, oozing with jargon
  and current procedural terminology codes. Just
  look, if you dare, at your latest explanation of
  benefits from your insurer.
• Whats more, rarely is there one standard price
  for a medical treatment. Prices vary based on
  geography and type of provider whether
  hospital, stand-alone clinic or any alternative.
• Then, doctors, hospitals and other providers may
  negotiate different rates with different
  insurers. It is not unusual for a provider to
  have 10 or more different prices for the same
  procedure, depending on who is paying. Providers
  often charge a completely different rate for
  people paying on their own, which is almost
  always much more expensive than the discounted
  rate that insurers pay.

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The Economics

• What gives a firm market power?
• Lack of a substitute!
• Market price is related to the elasticity of
  demand.
• What happens to quantity if you raise price?

P
Q
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