An MRI for $500, Please

For years we’ve been able to “shop” for health care insurance coverage — whether for individual policies or among different options offered by an employer. But if there’s one thing that the Patient Protection and Affordable Care Act (PPACA) has done, it’s put a spotlight on the cost of not just insurance premiums — but the cost of actual medical services.

In fact, there is an increasing trend to make cost and quality data on hospitals and other healthcare providers publicly available.

[CLICK HERE to read the article, “Healthcare Pricing Transparency Gains Momentum,” at Forbes, Jun. 9, 2013.]

[CLICK HERE to read the article, ” Price transparency gains ground as lead healthcare issue,” at Healthcare Finance News, Jul. 9, 2013.]

In recent years, the rise of consumer-directed health plans (CDHP) has helped put consumers in better touch with the actual cost of the medical services they receive. The CDHP features higher deductibles and lower premiums than most health maintenance organization (HMO) and preferred provider organization (PPO) plans. The difference between a high-deductible health plan (HDHP) and a CDHP is that the latter can be complemented with a tax-advantaged savings account, such as a health savings account (HSA).

HSAs may be one of the reasons consumers have started to become smarter shoppers of health care services. That’s because many of the expenses incurred must be paid out of pocket — using the savings account — while with an HMO those costs are covered without the consumer ever even knowing how much was paid. Because the tax-advantaged HSA belongs to the consumer and not the employer, as is the case with a health reimbursement arrangement (HRA), people tend to be more inclined to shop for the best value.

[CLICK HERE to read the article, “Cigna: Health accounts cut first-year costs,” at LifeHealthPro, Feb. 14, 2013.]

[CLICK HERE to read the article, “7 reasons HSAs are taking off,” at LifeHealthPro, Sept. 11, 2013.]

In fact, research from Cigna Corp. has revealed that the medical cost trend was 20 percent lower for HSA customers than with traditional plans during the first year. The study also found that CDHP members are more likely to take advantage of preventive care benefits and participate in wellness programs and health assessments, and 59 percent are more likely to use their health plans’ medical cost information tools.

[CLICK HERE to read the article, “Surgeries unnecessarily drive costs,” at Risk and Insurance, Oct. 21, 2013.]

What’s next on the horizon — medical facilities bidding for your business? An online catalog to shop for procedure prices? These things are already happening as America’s entrepreneurs seek ways to respond to the growing demand to lower the cost of medical services. 

[CLICK HERE to read the article, “Medical costs too high? Some doctors will bid for your business,” at KATU.com, Sept. 30, 2013.]

[CLICK HERE to search an online medical products and services cost database at Healthcare Blue Book.]

Whether you support PPACA or not, many people agree that some form of health care reform is necessary. And regardless of legislative mandates, the health care industry is moving forward in responding to some of these issues. It’s good to see that a similar trend toward transparency to which professionals in the financial and insurance industries can be held is being extended to the health care industry.

Let us know if we can help you plan for the future.

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The information and opinions contained herein are provided by third parties and have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by our firm. Content is provided for informational purposes only and is not a solicitation to buy or sell the products mentioned. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.

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