Some Americans pay directly for their health care. Many others have it covered by their health insurance. Both groups should pay the same amount for the same services, but don’t. The “deep pocket” concept may be at work.
In their book “Overcharged,” Charles Silver and David Hyman argue that health care is expensive because it’s insured. Their thesis is that medical procedures and commodities would cost less if patients paid for them directly. Recent news stories support this argument:
Sutter Health charges Aetna $85 for flu shots it advertises to the public at $25.
The New Jersey School Employees’ Health Benefits Program paid some acupuncturists and physical therapists an average of more than $600 per visit in 2018. Pay out of pocket and the cost is generally less than $100 per visit.
Blue Cross and Blue Shield of Minnesota paid a New York City physician practice $25,865.24 for an out-of-network throat swab that LabCorp prices at $653.
A more systematic comparison of prices paid in a retail milieu to prices paid by insurers is suggested by a 2019 report by Katherine Hempstead and Chapin White on the retail market for health care among the Amish and Old Order Mennonite communities in Lancaster and Lebanon counties in Pennsylvania. Members of these so-called Plain sects reject commercial and public insurance, and so pay cash for medical treatment.
Hempstead and White found that a local health system quotes prices to these customers in a way that is fully transparent; prices are for care bundles and nothing in its price booklet for these patients approaches the fanciful dollar amounts or nonsensical descriptions found in the same facilities’ chargemaster lists.
I compared prices from this health system’s booklet to the average allowed amounts for the same services reported by the Health Care Cost Institute’s Guroo tool for hospitals in the state of Pennsylvania. For all services for which insurers pay more than $5,000, the price quoted to the Plain communities is substantially less than the price negotiated by insurers, with most retail prices falling between 49% and 64% of insurers’ prices.
Source: Stat News