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 with employer-sponsored health care coverage is unaware of the complete cost of health care services,” says Howard Cutler, vice president and executive director, eastern Pennsylvania, HealthAmerica. “There’s a difference between what the patient pays out of pocket and what the doctor receives from the insurance company. Understanding this difference helps employees become more informed consumers.”
Smart Business spoke with Cutler about how to become an informed consumer in the health care market.
How well informed are consumers about the costs of health care services?
Studies show that most people have no idea what a hospital or other provider might actually bill. A Harris poll indicated that 63 percent of respondents did not know the cost of their recent treatment until the bill arrived, and another 10 percent never learned the cost. And most people don’t realize that a trip to the emergency room for nonemergency services costs a lot more than going to an urgent care center or seeing their doctor.
Why should consumers care about costs?
Being unaware of actual health care costs contributes to several problems. People may seek services that they don’t need or seek them in a more costly setting because they think it’s cheaper than it is. With the advent of more coinsurance and deductibles, patients likely will experience sticker shock when they realize the portion they have to pay.
And it’s use of services — or overuse or inappropriate use of services — that drives up health insurance premiums for everyone. Using auto insurance as an analogy, if were we all reporting our cars stolen, getting points for traffic violations and asking for extensive body work and repairs to our cars, all those claims would make our collective auto insurance premiums rise.
Is it difficult to become a better consumer of health care?
The easiest thing to do is to know your options before you need them. Read the materials from your health plan and see where you can get services. If you know you’ll need a service repeatedly — such as blood work or a certain prescription — call the health plan and ask where you can get the most affordable cost without compromising quality or safety.
Obviously, we’re not talking about emergencies, but in most cases of chronic disease, mild illness and sprains, your family doctor, pediatrician, or internist should be the first stop for help. Being a good consumer means understanding your benefits, as well as understanding that seeking care in the appropriate setting saves everyone money.
