How to Save Money on Your Medical Bills

You may have noticed that prices for medical services can vary greatly. With the lack of transparency that is common in the healthcare industry, it can be difficult to know if you are getting the best price for your healthcare services. This may feel especially important if you have expenses that do not meet your IUA or that are not a part of a medical need.

At Zion Health our goal is to keep our member contributions as low as possible. We do this with the help of our members, who take responsibility for their own healthcare every day by searching for the best prices on the services they need. But how can you do this when healthcare prices can differ by thousands of dollars for the same procedure? Let’s explore why medical costs work the way they do and what you can do to save money when you need a medical service.

Why Do Healthcare Prices Vary So Much?

1. Insured patients’ costs are determined more by their insurance plan than actual service prices

When a patient has traditional insurance, the amount they pay is generally based on either a copay or their deductible and coinsurance amounts. This means most average healthcare consumers probably aren’t too interested in how much their insurance company is going to be charged for their healthcare.

It is up to insurance companies to negotiate rates for the overall costs of healthcare services. For a long time, these rates were kept secret. Recent laws forced hospitals to publicly reveal the rates they negotiated with insurers, a move the American Hospital Association pushed back against without success.

The results showed prices that varied wildly, even at the same hospital. For example, at Sutter Health’s California Pacific Medical Center, the price of a joint replacement varied between $23k and $102k, with most individual plan prices in the upper half of that range.

Although this range of prices may not seem like it affects patients directly, higher prices are passed on to patients through increased monthly premiums and rising deductibles.

2. There is a lack of competition

Healthcare consumers are often limited in where they can receive care—either because their insurance limits them to in-network providers, or because they simply do not have options in their area.

A study by Yale economist Zack Cooper showed that “compared with regions served by four or more competing hospitals, regions with three hospitals have prices that are 5 percent higher; those with two hospitals have prices that are 6 percent higher; and those with a single hospital have prices that are 15 percent higher.”

Additionally, the abundance of hospital mergers continues to decrease competition, resulting in more price variability.

3. Health services are often unplannable but necessary

Many healthcare services are the result of an accident or emergency, meaning consumers don’t have the option to shop around or get the lowest prices on services. If a patient is being rushed to the hospital for a stroke or a broken leg, they likely aren’t asking to be taken to the facility with the lowest prices. Many facilities can charge more than they might if the patient was able to shop around and compare prices beforehand.

Many healthcare services are the result of an accident or emergency, meaning consumers don’t have the option to shop around or get the lowest prices on services. If a patient is being rushed to the hospital for a stroke or a broken leg, they likely aren’t asking to be taken to the facility with the lowest prices. Many facilities can charge more than they might if the patient was able to shop around and compare prices beforehand.

How to Save on Medical Bills

1. Use the PHCS/Multiplan Network

At Zion Health, we don’t limit our members to any provider network; you are free to choose any doctor that will give you quality care. However, we have also contracted with the PHCS/Multiplan Network so that our members can receive discounted rates on many services without having to negotiate themselves.

If you know you need a medical service that is either ineligible for sharing or that won’t meet your IUA, you can find an in-network provider and generally get that service at a lower cost.

2. Ask for negotiation / get a cash-pay discount

Most people don’t know that you can negotiate your medical bills. Hospitals and providers usually charge insurance companies more than  uninsured patients. If you ask for a cash-pay or self-pay discount at the time of service, most providers will give you a discount. Sometimes, this can be as simple as asking for a discount when you receive your service.

With the extreme variation in healthcare pricing, negotiating is not always so simple. Zion Health is always happy to help you negotiate medical bills, even if your need is not shareable.

3. Do your research

Negotiation is often about doing your research to find out what a fair price would be on your medical bills. You can look at the Medicare rate for services to get a good idea of what a reasonable charge would be. Generally, “fair pricing” is considered a rate that is somewhere around 150% of the Medicare rate. For services that don’t have an available Medicare rate, finding reference-based pricing for your area can also be helpful.

New laws are making hospitals be more transparent about prices for specific services. You may be able to find prices on the facility’s website or call their billing department and ask for information.

4. Ask for costs in advance

Doing your research and asking for costs ahead of time is a great way to make sure you go into a negotiation prepared. We suggest finding prices as soon as possible, especially if it allows you to compare facilities. Shopping around for healthcare isn’t something most people are used to, but it is a good way to save on healthcare costs for non-emergency services.

5. Get itemized bills

Sometimes, hospitals overcharge due to error. They bill for extra services or make other mistakes. Zion Health requires itemized bills for sharing anyway, but it’s often a good idea to look over your bills even if expenses don’t amount to your IUA. Just reading over your bills and looking for errors can sometimes save you a significant amount on a medical bill.

6. Try direct primary care

Direct primary care is a great way to get routine healthcare services at one low price. If you haven’t already heard about DPC, you can learn more here. Using a DPC practice for your preventive needs may be a great solution that will help  you save a lot of money on your routine care and prevent larger medical expenses from ever occurring. It’s basically a win-win.

7. Take advantage of your Zion Health community!

If the thought of navigating the world of healthcare prices and negotiating bills seems overwhelming, remember that Zion Health is always there to offer advice and help you find the lowest price for any healthcare need. Feel free to contact our Member Care team whenever you’re thinking about a medical service, and we will do our best to help.

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