Knowledge is a critical weapon in the battle against rising health care costs. As more employees become responsible for paying for a greater portion of their health care coverage, the ability to make smart consumer decisions becomes more important than ever.
“The average person may pay only a $5 or $15 copay per visit with the family doctor,” says David Crosby, regional president of HealthAmerica. “But the real cost of the visit can average anywhere from $70 to $140. Most people with insurance have no idea what the true cost of a service is.”
Smart Business spoke to Crosby about the importance of being an informed consumer in the health care market.
How well informed are consumers of the costs of health care services?
Copayments only cover a fraction of the cost for a service, even though the person might feel like he or she is paying a significant portion, especially if the copayment has increased over previous years. Where the service is received makes even more of a difference. Costs for lab work can vary 50 to 100 percent depending on whether it’s done in the doctor’s office, in a freestanding lab, or in a hospital
So, being unaware of actual health care costs contributes to several problems. The moral-hazard argument says that because people aren’t paying that $70 or $140 for the doctor visit out of their own pockets, they use more — or more expensive — health care than necessary. And this leads to a general dissatisfaction of benefits because people don’t understand the underlying costs. Until we understand the real cost of services we receive, we will not make thoughtful decisions about necessity, setting and frequency.
Are we better consumers than we were when employers paid for all benefits?
We are becoming better. Getting people interested in generic drugs was a start. But we need to do more so that we can all ask smart questions before receiving care. According to AARP, one thing we can do is ask the doctor what he or she expects to learn from a test and what difference it will make in our treatment. Nationally, more than $500 billion was spent on treatments, test and hospitalizations that did nothing to improve our health.
The same is true with the emergency room. Some estimates conclude that more than 50 percent of care provided in the ER should have been handled at a doctor’s office. That drives up costs for everyone. Taking the time to get to know your benefits before you need them will go a long way to getting the most cost-effective care in the right setting. Encourage employees to read the member magazine and member guides when things are calm. If a situation arises, they’ll be better prepared to recognize an emergency and seek care accordingly.