Anyone who has ever tried to work out a hospital bill knows that they can be next to impossible to understand. This conveniently makes it easy for hospitals to hide improper charges by using mysterious medical technology and codes. Whether through deliberate overcharges or honest errors, experts estimate that hospitals overcharge patients by $10 billion a year, or an average of $1,300 per hospital stay. Nora Johnson, a medical billing advocate, was quoted in a recent article saying that over 90% of the hospitals bills that she has audited have had gross overcharges.
Hospitals often go to extraordinary lengths to discourage you from delving too much into your bill.
- If possible, call the hospital’s billing department ahead of time and ask them what you will be charged for a room and what that charge includes.
- Ask your doctor to estimate your cost of treatment.
- Bring your own prescription medications to avoid paying top price for medications purchased from the hospital.
- If possible, keep your own lists of tests, medications, and treatments. Hospitals have been known to charge men for pregnancy tests and adults for newborn tests.
- Never pay the bill before leaving the hospital. Before paying your bill read it carefully, and compare it to the estimated costs you were given before being admitted.
- Demand an itemized bill, and ask for a detailed explanation for any items you don’t understand. Don’t accept generic answers like “lab fees” or “miscellaneous fees”.
Health Savings Accounts Promote Price Transparency
Health Savings Accounts (HSAs) are plans that have a high deductible, and a savings account in which tax-deductible contributions can be placed. The money in the account can be used to pay deductibles and other charges not covered by health insurance.
The great promise of health savings accounts is that they will re-inject market competition into the healthcare market. As all of us who were fortunate enough to take Economics 101 understand, the balance of supply and demand provides the public with the greatest value at the lowest possible cost. If company B can produce and distribute the same quality widgets as company A, but at a lower cost, then the average price of widgets will fall, more people will be able to afford more widgets, and the average quality of a widget will increase, as businesses compete for customers. This is a wonderful system, and is part of what has made the United States the wealthiest country in the world.
Unfortunately, this system has not been in play when it comes to healthcare, because the consumer has not typically been paying the bill. As a result, the consumer doesn’t care what the service costs, and most doctors, hospitals, and pharmacies are very reluctant to reveal their (high) prices.