The Navigoe Blog

My Somewhat Costly Healthcare Education

I have a high deductible health plan (HDHP), which is compatible with a Health Savings Accounts (HSA). These plans were first approved and made available to the public in 2004. The concept makes sense for someone who does not expect to have a large amount of insurable medical expenses. These plans were supposed to make its participants into smarter consumer of medical services.

One of the problems with the HMO or PPO system is that consumers never see the actual medical bill.  Or if they do, it says on the bottom, “informational only; your insurance provider has been billed.” Consumers under this type of plan have no incentive to consider the cost of care, or to shop for a lower cost provider. It’s like shopping with someone else’s credit card.

The HDHP, as the name implies, has a high deductible; typically between $2,500 and $4,500 for individual plans, and as much as $12,000 for a family. They typically cover an annual physical, but beyond that, you’re on the hook for everything up to that steep deductible. So, you can see why it was believed that the plans would make smarter consumers of medical services.  If you’re basically out of pocket for the first $12,000 of your family’s medical expenses, you’re going to want to see the price tag before agreeing to any services, tests or procedures.

Of course, that’s easier said than done. Consumers with high deductible plans now have economic incentive to learn the cost and necessity of medical services and to cost compare with other providers.  However, the bigger problem is that the providers are ill-equipped to provide a price tag.

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This recent Forbes article by Kate Ashford, tells the story of her frustrating quest to find out how much her MRI would cost.  I can’t even tell you how much I empathized with her story.

I had an experience with a much smaller procedure than Kate’s MRI, but nonetheless aggravating.  I was at my doctor’s for my annual physical exam, the one and only thing fully paid for by my insurance plan.  We did the usual, “step on the scale”, blood and urine samples for lab work, blood pressure, etc.  I really like my doctor.  I think she’s does a very thorough “head to toe” physical exam.

Now this part might be “TMI”, but it’s a central part of my story. Due to my sinus allergies, I sometimes have earwax impaction.  I usually buy a home kit and take care of it on a (very) quiet evening. However, during this particular physical exam, my doctor said, rather in passing, “looks like you have some wax. You want us to take care of that while you’re here?” Given that my physical exam is the only thing that is covered, I certainly want as much done as possible. So, naturally, I agreed.

A nurse came in, and flushed out my ears with their peroxide and warm water solution using a rubber syringe.  Suddenly, everything seemed louder and more clear, and I went about my day.

Two weeks later, I received a bill.  I was charged $50 for the ear cleaning.  Fifty Dollars! Do you know how many home earwax kits I can buy for $50? (the answer is five and three quarters) I called the billing department at my doctor’s office and was told, “your insurance doesn’t cover it.” I replied, “I was there for my annual physical, which is covered. I was given no indication that the ear cleaning was not part of the physical.  Clearly, I would not have agreed to it if I had known that a) it’s not a covered part of the physical, and b) it’s $50!”

As anyone who has dealt with medical billing offices knows, sympathy was not forthcoming. I said snarky things like, “so, next time I’m asked to step on the scale, should I ask if it’s covered?”

My frustration with this unexpected bill is the fact that my doctor probably didn’t even know that I was paying $50 for the ear cleaning. I’m sure if she did know, she would have recommended that I pick up an over the counter kit on my way home.

High deductible plans might provide economic incentive for consumers to be smarter shoppers for their medical services.  I certainly know now to ask during my physical exam, “is this covered by my insurance as part of my annual physical exam?” before they do anything.  But, I’m not completely confident that my doctor or her staff will know the answer until the billing department takes over.

Making consumers smarter buyers is only half the battle. We also need to create economic incentive for healthcare providers to become smarter sellers.