Taking Control of Your Healthcare Dollars
New tools are becoming available that allow you to negotiate for the health services you need.
PHOTO CREDIT: Getty Images
With the Affordable Care Act pushing the uninsured rate in the U.S. to a record low from 15.7 percent in 2009 to 8.8 percent in 2016, on the surface it would be easy to assume that medical care has become more accessible for the average person. Unfortunately, the reality of healthcare access is much more complicated.
More people are saddled than ever before with high-deductible health insurance plans that they can barely afford, leading them to skip preventative care services and wind up worse off later - winding up in emergency rooms and finding themselves unable to pay for the care that their insurance doesn't cover.
To combat the imbalance in healthcare coverage many Americans are dealing with, price transparency and price shopping solutions like ZendyHealth and MediBid have come on the scene. Offering the public, a way to bid what they are willing to pay for healthcare services - much like Priceline did with travel - these companies are helping healthcare providers and patients come together and make deals that benefit of both parties.
High Deductible Plans are Becoming the Norm
Over the past few years, the health insurance plans available to the average American have altered significantly from what they were even a decade ago. Now the most common offerings - especially the plans that are somewhat affordable - feature higher and higher deductibles. Health insurance companies do not start paying for the costs of care until the deductible has been paid in full by the insured party, so the burden of paying for healthcare has been continuously shifting onto the insured, not the insurer.
A Struggle for Patients and Care Providers
According to the Kaiser Family Foundation, the costs paid for by the patient have risen 230 percent from 2006 and 2015. This massive shift in the way healthcare is paid not only impacted patients but care providers as well. Where hospitals and care providers used to get paid primarily through reimbursements from health insurance companies, today they are increasingly seeking payment directly from patients. According to one study conducted by InstaMed, care providers saw almost a 200 percent increase in the payments received from patients between 2011 to 2014.
Price Transparency and Price Shopping Solutions
As happens so often with inefficient markets, the current quagmire of health insurance coverage and the high cost of care has led to substantial unused provider capacity. In response to these inefficiencies, several companies have developed systems to tap into this unused capacity. Companies like ZendyHealth and MediBid allow providers to bring in patients and make money while letting patients get care at reduced prices.
Understanding Unused Provider Capacity
There are some similarities between healthcare providers and airlines, who also suffer from unused capacity. Just like airlines, who are going to fly with a full plane or a half-full plane, care providers are already set up to deliver care throughout the day - they have the equipment, the staff, the facilities, all standing by waiting to provide healthcare services. When a plane flies with empty seats, airlines lose money. When too few patients walk through the door, care providers lose money.
Airlines are willing to sell extra seats for lower prices when it is prudent to do so. If it seems unlikely that more passengers will be willing to pay full price, the airline can offer the extra seats for less and less money until they fill the plane. In the end, an extra $300 (when a regular ticket is $500), is still better than flying with an empty seat and generating no income at all.
Medical care providers are also willing to sell services for less than full price when they need to fill unused capacity. They will naturally try to attract as many patients as possible who can pay top dollar, but lately, that has been getting harder to do with high-deductible plans. Price shopping solutions are a practical answer to these difficulties for care providers and patients alike.
How Price Shopping Solutions Work
When a potential patient goes to use ZendyHealth, he or she gets the opportunity to bid on healthcare services and dental services. For instance, if the individual wanted an MRI, there is a good chance that he or she could make a deal to purchase one for $400-$500 (or less, depending on the region). Under a high-deductible plan, the individual would need likely to pay at least $1,000 for the same MRI. If the deductible is over $1,000, which most deductibles are now, then insurance would not cover any of the costs for the MRI.
It is important to note that the healthcare services purchased on sites like ZendyHealth are the same services one would receive through a regular health insurance plan. The same care providers that work with insurance companies offer reduced price services on price shopping sites because they need to fill unused capacity. This means there is no loss of quality of care just because the price is lower.
Doing the Best with What is Available
There is no denying that the current health insurance system is lacking, and it does not appear that there will be major improvements anytime soon. Fortunately, price shopping solutions offer one option to get needed care, particularly preventative care, that can help many people avoid costlier medical bills in the future.