Save on Your Medical Expenses: Shop Around for Surgery

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Posted by The Savvy Retiree on July 26, 2016 in Money Saving Strategies, Personal Finances

Jud Anglin writing on medical expenses…

The high cost of medical care in the U.S. has been a leading cause of bankruptcy for many years now, but if you’re faced with surgery there are ways to save on your medical expenses.

Let’s say that one day you notice a sharp pain in your right knee. At first, you may think that it’s just growing pains with age, so you take a pain reliever and blow it off. But after several weeks go by, the pain only grows worse, to the point of you almost being unable to walk.

A quick doctor’s visit confirms that you have a torn meniscus. The required surgery is quoted at $14,250 (hypothetical price).

If your family insurance plan has a new deductible of $12,900, this is the amount that you must pay out of pocket for this procedure before your insurance kicks in and pays the remaining balance of $1,350. Not much help, right?

You could go ahead and proceed with the surgery and be out $12,900. Or you could shop around, negotiate, and find a better deal. I recommend the latter, and I will show you how to do it.

State your intention to pay cash from the outset

Medical expenses

©iStock.com/AlexBrylov

The very first step is to inform your doctor, the receptionist, and all other administrators involved from the outset that you are paying cash and not using your insurance. When your health care providers know that you are paying cash out of pocket, they usually place you on a different track and are more willing to offer you a more competitive price.

Will your surgery be inpatient or outpatient?

Medical expenses

©iStock.com/greenjellybean

Inpatient care means that you will be admitted and will recover overnight, which is much more expensive than outpatient care. The average price for staying overnight in a hospital room is $1,800 per night. You can potentially save yourself a significant amount of money by having your procedure performed as an outpatient, so you should request this if your procedure allows it.

Can your surgery be performed in an outpatient surgery center?

Medical expenses

©iStock.com/EyeMark

Many medical specialties, like orthopedics and cardiology, have set up outpatient surgery centers. These centers have different business models from large tertiary care hospitals, which have to incorporate the pricing of diagnostics. So if your procedure allows it, you should try to have your surgery performed in an outpatient surgery center.

What technology and equipment will be used?

Medical expenses

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When discussing your surgery with your doctor, make sure to inquire about the equipment and technology that will be used during your procedure. Big medical device companies like to promote the use of newer, cutting-edge instruments and equipment, but they may not be necessary for your particular procedure. This new equipment has to be amortized back into the procedure price, so if you can get away without it, you can save money.

How much are insurers paying for the same procedure?

Medical expenses

Large health insurance companies negotiate most of the prices that they will pay for their policyholders’ procedures. These negotiated prices between insurance companies and hospitals are generally much lower than the prices charged to patients who are uninsured or underinsured. Healthcare Bluebook is an online service that shows you the amount that insurance companies are paying hospitals in your area for the same procedures. Once you know the specific price that insurance companies are paying the hospital for your procedure, you can ask if they will accept that price or at least be competitive.

Obtain competitive quotes

Medical expenses

Once you exhaust all the above considerations, you can seek competitive quotes to present to your surgeon to see if he or she can match or beat the price(s). To obtain a quote in a short amount of time, visit the website of the Surgery Center of Oklahoma. They are America’s first doctors-owned, cash-pay hospital, and they list all of their procedure pricing online.

Next, you can contact CIMA, based in Costa Rica, where prices are often one-fourth the price of what they are in the U.S. Let them know that you are interested in traveling to Costa Rica for your specific procedure but would like to know the price before you purchase your airline ticket. They will probably request that you email your medical report and digital images, such as X-rays or MRI scans.

This may require some homework on your part, but it will be worth the effort when they send you a formal, all-inclusive price quote, which you can then take to your local surgeon for comparison.

In closing, one of the unintended consequences of Obamacare is that the skyrocketing insurance deductibles will incentivize more and more patients to start asking their health care providers for the cost of their procedures. The considerations and tips that I covered above should put you in the right direction for getting a better deal.

Image: ©iStock.com/yacobchuk

Editor’s note: Jud Anglin is health expert and regular contributor to Laissez-Faire.