Save On Healthcare: Hide Your Insured Status And Pay Cash Instead
Forget that the blogger's name and the name of the site make the information to come sound like it'll be a cross between an afternoon soap and a porno. The suggestion seems pretty wise for those who don't have an HMO like I do.
Dike Drummond, MD blogs at KevinMD:
The days of paying more when you are paying cash may be coming to an end. Doctors and hospitals are starting to do what every other business has done since the beginning of time - giving a discount when you pay cash....(There are) sometimes dramatically lower prices for cash on the barrel head.
Here are two examples:
A recent article in the Los Angeles Times reported a CT scan of the abdomen costs about $2,400 for patients insured by Blue Shield of California, while the Los Alamitos (Calif.) Medical Center cash price is only $250. That is a 89% discount by my calculation.
Another local California hospital charges insured patients $415 for blood tests that cost only $95 in cash. This time it's a mere 77% discount.
Now, there are some interesting rules to the cash discount game.
First, to get the discounted prices, patients would have to withhold insurance information from hospitals. If you tell them you have insurance, they will be bound to charge you the insurance company's negotiated rate. Those are the up to 89% higher fees documented in the previous paragraph.
However, if you don't tell them your insurance and pay cash instead, the cash payments don't apply to your annual out-of-pocket spending limits.
For a 89% discount, I am pretty sure there are times it would be worth it to keep your little secret. If you are healthy and only need an occasional visit to the doctor you now get to make the judgment call on cash discount vs. paying five times as much and applying it to your deductible.
I used to see a primary care doctor that wasn't covered by my insurance (still do sometimes). I have Kaiser which doesn't cover her. She considers me uninsured and gives me a flat 25% discount off the price because I pay cash. And if I pay in full up front I get an extra 10% off. I don't know if she still does this because she recently had to join a large medical practice to be able to afford to do business. The state forced her to take on 600 Medicare patients (who were also on state Medicaid), I'm not sure how or why, but this became the majority of her practice and the reimbusement rates are far below actual costs.
Meanwhile, I had to take a Medicare training class at work and if a patient just has Medicare the provider (in my case my employer, Kaiser) only gets reimbursed what the government feels like paying regardless of cost or amount billed. However, if the same patient had supplemental insurance for their Medicare the government pays an $850 per month capitated rate (per person) which ends up being much better for the providers, or rather insurance companies as they are the ones that get the money (Kaiser is both insurance coverage and providers).
BunnyGirl at July 5, 2012 11:01 PM
I found this out years ago.
I have an HSA with major medical. I pay cash for everything - actually I use a debit card tied to the HSA for most expenditures.
By paying cash it doesn't count toward the $5K deductible, but I've never spent more than $400 a year on medical expenses other than teeth which aren't counted toward the deductible anyway.
I lucked out and have a Dr. who will do stuff on the phone rather than forcing office visits. Last time I saw him about neck pain, and his office called to say the x-rays didn't show damage and to give it a few weeks to see if I felt better.
I had another Dr. for a short while who made me return to his office to tell me there was nothing he could do and offer me a business card for a dermatologist. I went off on him, and refused to pay for the visit because he could have told me that over the phone.
He was shocked. I don't think anyone had ever complained about the way he ran his practice to inflate his insurance charges.
Also don't forget dentists and periodontists will do deals for cash. I used to see a dentist who charged me $40 cash under the table for cleaning and a check up. I had to pay cash, and didn't get receipt. Not that I needed the receipt.
Terry at July 6, 2012 2:29 AM
This tells you something important about why - and how - our health-care system is broken.
It's not that medical services are overpriced. The problem is that the bureaucracy around them is broken. Regulation is essential, but over-regulation is fatal.
The sheer bureaucratic effort to actually get paid by insurance, or by Medicare/Medicaid is so over-the-top that your average GP breathes a sigh of relief when he can just treat someone, take cash, and be done with it.
If Obamacare is actually implemented, be certain that cash payments to health-care providers will soon be illegal.
a_random_guy at July 6, 2012 2:30 AM
This is really good information. I pay out-of-pocket for medical care. I always ask what the price will be before I make an appointment, always ask if there is a discount if I pay in full, and always call around to compare prices.
Private, for-profit clinics, hospitals, medical labs and radiology labs have the best prices, and here in this area a typical discount is around 40% if you pay at time of service. Non-profit hospitals and clinics have higher prices, but may give a discount for payment at time of service. County hospitals, clinics and labs have the highest prices and don't negotiate, but may have a sliding scale based on income.
For example, for a certain MRI I needed a few years ago: The county hospital wouldn't give me any idea of the price until after I had the procedure. Two different non-profit hospitals couldn't give me an exact price until after the procedure, but both "guessed" around $7,000. Both would give 40% a discount - so around $4,200. The private, for-profit radiology clinic I went to quoted me a price ahead of time of $1,610 if I wanted to pay it off monthly over a year, or $1,046 (a 35% discount) if I paid with cash or credit card at time of service. When I asked when I could get it done, instead of having to wait for five months as is typical in Canada, the cheerful customer service girl said, "Would three o'clock work for you?" I was working that day so I had to make them wait until the next afternoon for me to come in.
A set of lab tests I needed were priced at $390 directly from a private, for-profit lab. If I paid up front they would be $312 - a 20% discount. Instead, I ordered a set of lab tests that included the tests I needed plus several others, in a package deal, from an online vender who was running a promotion, for $110. The tests were done at the same lab that wanted $312 if I ordered from them directly. And I didn't need a doctor's order or prescription like I would have if I'd ordered them directly through the lab (a doctor visit would have cost me another $80). Go figure.
Prices for drugs can vary dramatically from one seller to the next, especially generics. The cost of the ingredients for most drugs is so miniscule that prices are determined entirely by other factors. One medication I needed was $78 for 30 doses at Walgreens (the name brand version was $135); at Costco the generic was $9 for 30 doses and $10 for 100 doses. Often 100 doses cost only slightly more than 30, so it might be a good idea to ask you doctor to write the script to dispense 100.
Often higher dose pills cost the same as a lower dose - sometimes even less. For example 50 mg pills may cost the same as 25 mg pills. Most pills can be split in two. So if your prescription is for one hundred 25 mg ask your doc to write the script for 50 mg pills and you'll get twice as many doses for the same price.
Drugs can also be mail-ordered from online retailers outside the U.S. Technically it's not legal, but thanks to political pressure from AIDS victim advocacy groups the authorities sort of look the other way, as long as people aren't trying to import more than a reasonable amount for personal use. Trying to buy scheduled drugs from outside the U.S. is risky business though.
Pharmaceutical companies outsource, and many name brand drugs sold in the U.S. are made by U.S. FDA approved and inspected manufacturers outside the U.S. - for example the drug manufacturer CIPLA in India. Patent laws in other countries are different than in the U.S. In many countries, a drug company can't patent a drug, but can patent the manufacturing process. So, if a different company can make the drug using a different process it's all good and legal.
American and European drug companies often make deals with foreign manufacturers that allow the manufacturer to produce and sell their own versions of drugs, as long as they don't sell them in certain markets, like the U.S., Canada, Western Europe or Japan. And often drug companies themselves sell their newer, patented drugs much cheaper outside the U.S. So you can order generic versions of name brand drugs, or even the name brand itself, from online retailers outside the U.S. for much less than you'd pay here.
But there are way more generic drugs available here in the U.S., and generics are way cheaper here (except that you have to pay someone $80-$120 for a permission slip to buy them)
Fraud is a bigger problem outside the U.S., but there are many honest, legitimate businesses all over the world. If you use caution and common sense the risk is pretty small.
Ken R at July 6, 2012 2:35 AM
Are you sure that isn't retail price vs cash discount?
While out of work for a short time my dental insurance lapsed so I had to pay cash. I paid cash so got a big discount off the posted/retail price. The receptionist said the price was basically the negotiated rate for most insurance companies.
The Former Banker at July 6, 2012 8:39 AM
I used to have catastrophic insurance and paid for my own prescriptions. One of them cost me $80. I now have nanny health care and the pharmacy charges them $240 and I pay a $70 copay.
Curtis at July 6, 2012 9:10 AM
Yes.
Ken R. tagged it perfectly.
Nobody _knows_ how much "it will cost."
Oh, the hospitals have it figured out to a farthing what it'll cost THEM.
But they have _no idea for months at times_ what they'll get back from Insurance.
Some doctors local to my parents opened a cash-only clinic. You have insurance? Great, here's your receipt, YOU go deal with them. The lead doctor realized one day that he had more people employed dealing with/negotiating with/jumping through hoops with insurance (private and public) than he had medical professionals.
But, don't worry. Giving a cash discount runs afoul of every insurance agreement I've been aware of. The doctors are just hoping it's not worth the trouble for the companies to start checking on that.
Unix-Jedi at July 6, 2012 11:25 AM
The cost of getting paid by third party payers is about 40% of the fees collected by health care providers. Perhaps that has some relationship to the fact that the typical discount for payment with cash or credit card at time of service is around 40%.
Ken R at July 6, 2012 5:24 PM
I'm going to use a truck comparison for this. A couple of years ago I had the back window in my pickup "shattered" by a rock.
I called the local glass place about a replacement. They asked if it was cash or insurance. I said cash -- they quoted $160 for solid glass, and $180 for a slider. When I went in I asked what the cost would be with insurance. It would have been $750-770 billed to the insurance; and somehow my deductible would have been written off.
But at the same time going into an ER as cash can screw you. I went to an ER a few years ago with insurance. I remember the copay was $75, but was so strapped at the time the was half my biweekly free cash; so I never payed it.
A few years later the hospital came back, claimed they had never received the $475 from the insurance company and wanted a $1K and change for the $75 I owed them. I had lost the original bill and ended up paying $625 as a settlement.
Long story short -- the debt collector didn't know she had to have approval from the hospital to negotiate and I put "Final payment as agreed." on the memo line. I haven't heard back for 3 months.
But there are many stories of ER's for cash payers wanting two to five times over what an insured person would have to pay.
Jim P. at July 6, 2012 10:57 PM
Covered.
Radwaste at July 7, 2012 12:02 AM
I am just going a comment from that blog entry, as it has useable info -
Eric Cox•a month ago−
Almost 10 years ago several practices started offering uninsured patients the Medicare cost of services. Then they encountered the very issue that is stated in this article. Patients with commercial insurance were being charged double or triple in out of pocket cost. I personally hope that this trend continues and does not fall by the way side! Oh and if you need another reason to pay cash... How about cash transactions are not reported to the MIB (Medical Information Bureau). This means unless you are using your primary care physician(it is included with all of your other medical history) or unless you provide the information to an insurance company there is no way to truly trace pre-existing or even accurately gauge a true risk liability.
John A at July 7, 2012 4:12 AM
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