By Stuart Prescott, Regional Senior Vice President & Founding Partner of Prescott Pailet Benefits
I finally gave in to having an MRI on my hip. The orthopedist told me he just couldn’t diagnose my problem without an MRI, and since I couldn’t cross my legs, I consented. He sent me down to the business office to get scheduled, where the nice lady picked up the phone and called the imaging center. “I need to schedule an MRI for a patient,” she said. I whispered to her, “Hang on, how much is it?” “He wants to know the price,” she said. “$1,500,” she told me, to which I replied, “Don’t schedule it, I’m going to check around.” “He’s going to shop around,” she said into the phone. Brief pause. “$450, Mr. Prescott, would that be OK?”
The 70 percent discount was not a result of my incredible negotiating skills. I simply asked the price and said I would explore my options. We exercise this process every day for purchases large and small, whether shopping for canned goods at the grocery store or buying a new car. Yet, we Americans are simply terrible at buying healthcare services. The doctor says to have a CAT Scan and we do it, no questions asked. He prescribes a name brand drug and we take it. She says, “Come back and see me in three weeks,” and we go, even though our sprained ankle feels great and we played tennis all morning just two days before.
Ignorance is Expensive
Could you imagine going into a store and buying a great looking shirt without finding out how much it costs until your credit card bill arrived at the end of the month? If you bought a new washing machine and it didn’t work, would you pay Best Buy all over again to replace it? Millions of Americans won’t even buy grape jelly without a coupon, but we have been trained to believe that we have no power when it comes to buying healthcare. We have no idea what things cost, and that’s why they cost so much—because the average consumer is not participating in the buying process.
This lack of awareness is the single greatest reason that health insurance premiums continue to rise. When claims are high, insurance companies pay more, so premiums go up. When claims are reduced by conscientious consumers, premiums follow suit. The fact is, almost everyone has the power to hold down the cost of care, just like I did when I asked the cost of the MRI. For employers, educating employees about the process and incentivizing them to make smart buying decisions can help them save money and significantly reduce healthcare expenditures for the business. Here are three steps your employees can take to save on the cost of medical care:
Ask Questions. I recently read a study that says that patients are reluctant to ask questions about the care they’re receiving, for fear their doctor will feel they’re challenging his or her expertise. To that I say, you’re the customer. Challenge the doctor. Your healthcare provider wants you to know what’s going on with you medically, and for you to understand what the course of treatment will do. Research shows that patients who are involved in their care get much better outcomes, and for a lot less money. By the same token, don’t be afraid to ask how much a prescribed treatment will cost, and to shop around for other options. If you have coverage, you should always ask, ‘Is this my negotiated rate for my insurance company?’ You don’t want to overpay. Likewise, competition holds down cost. Few restaurants charge $80 for a hamburger, because they know you can go down the street and get a good burger for $6. But, when it comes to medical treatments, only a fraction of consumers ask about the price. In the absence of pressure from the marketplace, rates go crazy, and insurance carriers are forced to raise premiums to cover the costs.
Avoid the ER. Emergency rooms across the country are filled with kids who stuck something up their nose and adults with a bad case of the flu. In other words, people are seeking treatment by the most highly trained doctors at the most expensive medical facilities for issues that are not true emergencies. What’s more, the average wait time for an emergency room visit is more than four hours. Fortunately, there are far faster and more affordable alternatives. Telemedicine services let you speak with a licensed doctor by phone or video conference, so you can get a quick diagnosis and even a prescription for common ailments, like a sinus infection or food poisoning. The growing number of Urgent Care centers nationwide means you can also be seen by a healthcare practitioner in less time and at a lower cost than if you went to the ER. You should note, however, that Urgent Care centers, like CareNow, Concentra, and PrimaCare, are different from free-standing Emergency Rooms. The latter are built for the sole purpose of charging patients a higher fee for treatment. If you’re having a heart attack, go to the ER at your local hospital. If it’s not a life-or-death situation, choose an more affordable option to lower your healthcare costs and help keep premiums down.
Buy Generic Drugs.Pharmaceutical costs are one of the greatest out of control expenses in healthcare, causing health insurance rates to skyrocket. Drug companies spend billions of dollars to bring new medications to market, and they charge exorbitant prices to recoup those costs. But often, you can find less expensive alternatives to “name brand” medications. Case in point: A client of mine was inspired by the concept of healthcare consumerism and did a little online research on her $80 combo prescription that was used to treat two conditions. She discovered that the two drugs, purchased separately, were available at COSTCO for $4 each. She called her doctor to see whether he approved of the change and was thrilled to save $850 per year on that one Rx, with her doctor’s blessing, just by taking two pills instead of one. The moral of the story? Ask your physician or pharmacist whether there is a generic version of medications you have been prescribed, use Google to your advantage, and don’t believe the ads you see on TV.
Employers and consumers can help curtail the rising cost of medical premiums by applying the same principles to healthcare services that they do for any other purchases. Ask the price of treatment, opt for Urgent Care centers over the ER, and find out whether generic options are available for your prescriptions. By educating employees about their influence as healthcare consumers, you can ensure they don’t rush for treatment without thinking things through, and that they pay less for medical services, when they do decide to buy them. Claims will go down, and both your business and your workers will benefit financially. The more we act as knowledgeable consumers, the more money we save—and that will make anyone feel better faster!
This document is not intended to be taken as advice regarding any individual situation and should not be relied upon as such. Marsh & McLennan Agency LLC shall have no obligation to update this publication and shall have no liability to you or any other party arising out of this publication or any matter contained herein. Any statements concerning actuarial, tax, accounting or legal matters are based solely on our experience as consultants and are not to be relied upon as actuarial, accounting, tax or legal advice, for which you should consult your own professional advisors. Any modeling analytics or projections are subject to inherent uncertainty and the analysis could be materially affective if any underlying assumptions, conditions, information or factors are inaccurate or incomplete or should change.
Copyright © 2017 Marsh & McLennan Agency LLC. All rights reserved.