After three months of using hot compresses to shrink the stye on my daughter’s eyelid, it wasn’t getting any smaller. My daughter is prone to this sort of growth, called a chalazion. This one would have to be removed surgically, like the one she had removed from the same eyelid two years earlier.
But there was one key difference this time around: Like tens of millions of people who get health insurance through their employer, my family was now in a high-deductible health plan. That meant we would have to pay for the entire cost of the surgery out of pocket. Suddenly, the cost of the surgery became very important to our family.
Encouraging patients to price shop for their health care is one reason employers are switching to high-deductible plans. The theory is that patients will compare prices across different doctors or hospitals and choose the lower-priced one, thereby saving themselves (and their employer) money. But in order to shop, you need to be able to see what something costs beforehand. Transparency in health care prices is a goal of President Trump’s health agenda, and is a priority for other politicians as well.
My family had every advantage that newly minted price shoppers could possibly have: We live in Massachusetts, one of the states that have passed price transparency laws to help patients shop for care; I am a physician; my research focuses on consumerism and price transparency, giving me plenty of insider information; and the surgery was minor and not urgent, giving us lots of time to shop around.
How did it go? Terribly. Here’s why:
On the website for our health plan, we muddled our way to its hard-to-find price transparency page. When we finally got there, we didn’t get the information we needed: removing a chalazion is not a common procedure, so it wasn’t listed.
An ophthalmologist would remove the growth. The billing department for the ophthalmologist who evaluated my daughter could tell us only what the doctor’s fee for the surgery would be ($1,007) and didn’t know the fees for the anesthesiologist or the operating room, both of which could be as much as, or more than, the doctor’s fee.
To get a better price estimate, we called our health plan. It asked us to submit a written cost request for the surgeon and the hospital we were considering. Twenty-four days later, we received an estimate of $452, which was both incomplete (it only showed the ophthalmologist’s fee) and incorrect (the health plan mistakenly assumed we were in a different insurance plan).
Other ophthalmologists we called said they would give us a price quote for the surgery only if we brought our daughter in to be evaluated. Each evaluation visit would cost more than $200.
One month into our price-shopping effort, all we knew was that the ophthalmologist’s fee would be in the $452 to $1,007 range, and the total surgery would cost much more. All the while, the red, swollen eyelid on our increasingly miserable middle-schooler was waiting to be treated. So, we decided to go ahead and have the original ophthalmologist do the surgery, even though we had no idea what it would really cost.
In the end, it cost us $1,443, including $556 for the ophthalmologist and $887 for the anesthesiologist and hospital. Despite the challenges, we recognize that we were fortunate — our daughter’s surgery went well and we could afford this unbudgeted expense. Others aren’t so fortunate.
Sadly, my family’s price-shopping experience is the norm in the U.S. My colleagues and I have found that most people can’t successfully shop for care, and that offering people a price transparency website doesn’t help them switch to lower-cost providers and doesn’t decrease health care spending.
Why isn’t price transparency currently working? It’s not that Americans don’t agree with the idea of shopping for health care. Most believe it makes sense and could save money for families and the health care system. Many recognize that there’s a great deal of price variation and believe that health care prices have little relation to quality, a suspicion our research backs up.
What can be done? First, we need to bundle payments to hospitals and surgery centers: a single payment that covers everything related to a procedure or doctor visit. Patients shouldn’t have to navigate the craziness of different bills for the hospital, surgeon, operating room, pathologist, anesthesiologist, and the like.
Second, we need a real-time “checkout” model consistent with most other services (think of auto repair). Health care providers would be required to give an estimated cost for a procedure as soon as it is recommended — we should have walked out of the ophthalmologist’s office after the initial visit knowing exactly what we would have to pay for the chalazion removal. There are still many logistical barriers to such a system, but it is technologically feasible and essential to let people truly compare prices.
Third, we need to make it easier to access the price data. Our family’s frustrations with accessing the website, which was both hard to find and hard to navigate, is common. Efforts by states such as New Hampshire and Colorado to make cost data easily accessible should be spread across the country.
Fourth, we need to think differently about how people shop for health care. Right now, the idea is that people must shop for every piece of care they need, from a lab test to an MRI or a visit to a dermatologist. But that isn’t the way the health care system works. When someone’s primary care doctor recommends a particular MRI facility or specialist, patients are reluctant to choose someone else, often out of fear that the medical professional knows best.
A better approach would be to help people profile different primary care doctors based on the prices of the specialists, radiology tests, and other things they order. This would let people choose their primary care doctor and then not worry about overriding their doctors’ recommendations on related services.
The tremendous price variation in health care shows us that Americans could save a lot of money if we could shop for lower-priced care. But first we need to make it much easier to do that.
Ateev Mehrotra, M.D., is an associate professor of health care policy and medicine at Harvard Medical School and a hospitalist at Beth Israel Deaconess Medical Center in Boston. He has received grants from the Arnold Foundation, the National Institutes of Health, CalPERS, and the Robert Wood Johnson Foundation for research related to price shopping and consumerism.
I live in naples and i was told id have to pay 2500 for a surgery to remove my cyst because its considered cosmetic surgery but the cyst is more than an eyesore it’s painful and pulsating. Im 19 and i still live with my mom in a very low income household. Is there any advice you could give me?
Not everyone gets a choice in PCP. Sometimes they have to use whoever accepts their insurance. Or how many miles they are able to travel and that’s becoming true in not only rural areas in the US. There is increasing vertical & horizontal consolidation in the “health care sector” and that means less & less competition. Where I live, one chain has a virtual monopoly of health care in 3 counties. Even w/real “price transparency” do you really think there’s going to be competition in those 3 counties? How many miles should people have to travel to get health care at a reasonable cost?
The US system is unworkable, there are far better ways of providing health care, w/ a better result at a lower costs in the world, right NOW. Only corporate power over state & federal legislatures & executive agencies prevent a real discussion of alternatives to the current worsening health care system in the US.
With all due respect, your cost is not what the doctor or facility charge is, but what your insurance company’s allowable is for each charge. Additionally, CPT codes that define not just location, but size and other parameters (benign vs malignant) are paid differently and many times a physician has no idea what a final size for a lesion removal will be until it is done. Then, to reiterate, you will not be paying the doctor’s charge. You will be responsible for the difference between the insurance allowable and the insurance payment.
I think it is appalling that Massachusetts health care facility and Harvard Medical school should offer such poor medical cover. Or perhaps the author just make a poor choice of the plans on offer.
The system is crazy. a few years ago I had minor surgery. I asked the cost, and was told. I asked if that was what I had to pay, and was then told that there would also be O.R. and associated charges. I asked if it could be done in the doc’s office. He said yes and I saved 2/3s of what he originally estimated. Why did he even suggest doing it at the hospital?
In addition,the “list price” of procedures is vastly higher than the price actually paid in nearly all cases. I have represented several patients without insurance where the doc tried to charge the list price for the self-pay. In each case, s/he backed off when faced with actually proving that the charge was fair and reasonable.
Sometimes dr recommend hospital for scheduling, he has multiple on same day & gets a block of time, patient might have underlying conditions, dr might anticipate complications that can’t be treated in office setting.
Had bilateral carpal tunnel surgery at an outpatient surgery center in network. Both sides done at the same time, each taking 5 minutes. One preop, one anesthesia, one postop. Shocked that the surgery center could bill for 2 entirely separate surgeries as if each side was done on different days. Complained to the carrier and was told that what they did was correct and proper. Don’t think that you can negotiate the health care system. It makes no sense.
Great piece. Truly illustrates the frustrations and limitations of responsible “health care consumerism.” I love your four recommendations, too, particularly the single charge for bundled services, and the ability to choose a PCP based on his/her affiliated labs/hospitals, etc.
I am disturbed you spent “three months using hot compresses to shrink the stye in my daughters eyelid” and then “One month into our price shopping effort…. All the while the red swollen eyelid of our increasingly miserable middle schooler was waiting to be treated.”
All this for a recurring stye that needed to be removed two years earlier?
All your points on price shopping health care are lost on me due to your focus on price over the well being of your daughter. There must be more to this story that I am missing. The daughter of a physician (and Harvard associate professor) should not spend 3 or 4 months with a painful swollen eyelid due to a stye.
Maybe the absurdity (though I’m sure it was anything but absurd for your daughter) of this situation is actually the point. Price shopping health care is not like price shopping for a sofa. Healthcare in my world is based more on relationships & referrals from my trusted Primary Care Physician. You are a Physician and are more qualified and connected than the vast majority of the population. The fact that YOUR daughter suffered for a month beyond the realization she needed surgery exposes the fallacy of this system. Price shopping while dealing with the health of yourself or your loved one is a ludicrous way to base healthcare decisions.
Wow, way to completely miss the point.
How much did the previous chalazion removal cost (re: “This one would have to be removed surgically, like the one she had removed from the same eyelid two years earlier.”)?
Chalazion removal is a common procedure. It is most often done under local anesthesia in the office exect in young children.
The total cost is under $400.00.
The hospital OR and anesthesia is what increased the cost. There must have been unusal conditions special needs allergy to local anesthesia fear of needles.
Things do not add up. There is more to the story.
I am shopping around right now for this procedure and the total cost is $1300 in Los Angeles (and I received quotes of up to $5000 when I was shopping around). It would only be $400 if I drive to Tijuana, and I know this because I called clinics there to price this procedure.