Negotiations, Not Love Songs
My wife had knee surgery recently.* One of the great things about our then-current health insurer is that they provide complete data—list price, what they negotiated, what they paid, what you owe. Since we’re in the “doughnut hole,” I’m tracking more frequently than I usually would.
And the bills—possibly because we were moving to a new provider—were processed quickly. So what you see below is, in percent form, the amount of the list price (in relation to the whole) and the net benefit to the provider (ibid.).
As you can see, the surgeon’s list price isn’t even close to the level he received, while the hospital and, especially, the anesthesiologist, did relatively better.
There are multiple possible reasons for this, and I don’t pretend this is representative of what everyone—or even everyone with my now-sadly-former Insurance Provider—would receive. The key finding is that all of these contracts and negotiations were carried on by a single entity (my insurance carrier) with each provider. Promises were made—volumes, volume discounts, speed of processing, and whatever else was agreed—and contracts agreed between parties.
All before I get involved.
Which means that the final figures are set in stone. I don’t get to negotiate them. Maybe I get to negotiate a payment schedule, but the levels themselves are set. So even if I believe that the pie should be distributed differently—that the hospital (and maybe the anesthesiologist my wife didn’t want in the first place) should get a little less while the surgeon gets a bit more, for instance—I don’t get a say in that.
Nor do I get the information before choosing an insurer. (If I even get to choose, which I do not in the case of employer-provided health insurance.)
Short version: my choices have no direct effect. There is a “market” for health care, but patient usage and expenditures has no direct effect on it.
*This occurred just as the company was being acquired and therefore our health plan was being transferred from one provider to another, but that’s another story for another time.
Ken
I’m wondering just what negotiation you may think could have been done if you were paying directly for each service? Granted that you can look around to different providers, but what negotiation was ever available to a direct pay patient? Are you able to negotiate fees with your dentist, most of whom don’t seem to be part of an insurance plan? A crown that could be done 30 years ago for $200-$300 now costs ten time that amount. A tooth that had decay might have been treated and filled for $20-$30 and now each surface of the tooth showing any sign of decay is treated as though a separate tooth. Does anyone out there have personal experience actually having negotiated for a lower fee from a medical provider. I’m not referring to financial hardship situations which would probably require some amount of personal financial disclosure. I’m only talking about price haggling.
Jack–I needed a few thousand dollars of dental work done. I told the dentist, before he started working on me, that I didn’t have insurance and asked if he could give me some help on the bill. He gave me a discount that saved me a several hundred dollars. And he still did excellent work!
However, that was one-on-one with the doc in a small 3-doc office. I need some other medical things done and so I started shopping around at some of the clinics and doctor’s offices. This is very important to me because I am self-employed and have a very high deductible. I spent several hours calling and being called back and found one quote at $1500 and another at $1000, but the rest of them couldn’t or wouldn’t won’t tell me what their contracted rate with the insurance company was (this is what I am ultimately going to have to pay). My insurance company was no help. The said the contracted rate is proprietary information. This lack of transparency means that I am severely limited in my ability to control my health care costs.