The Price of Health Care, a Honda
We Americans are thrifty. We know how to comparison shop and sniff out a good deal—particularly when it comes to our cars and household appliances.
We’re not penny pinchers when it comes to health care, however.
Washington Post columnist Michelle Singletary has an interesting article this week on our yen for saving money on everything but medical care.
“More people probably know the whereabouts of Osama bin Laden than the average cost of their health services,” says Singletary, who pens the “Color of Money” column for the Post.
According to a recent study, people estimate the cost of a routine doctor’s office to be about $95. The actual average cost is much higher—twice as high, actually. When asked to guess the cost of a four-day hospital stay, respondents underestimated the cost by nearly two thirds. Their guess average: $7,762. Reality: $20,000. People were more likely to come closer to the price of a Honda Accord. (On average their guesses were within $300.)
Why the discrepancy? Well, for one, people who have coverage through their employer have little incentive to find out the cost of care and hunt for bargains. Most of us simply pay our co-pay and get care; the difference is someone else’s responsibility, we think.
The other reason is that unlike shopping for cars, groceries or plane tickets, it’s hard to comparison shop for health care. We can’t cruise the aisles and check prices. There is no blue book for health care. No Travelocity.
As more and more people opt for consumer-driven health care plans, however, they will need to have a better understanding of the costs of medical treatment. Otherwise, people who underestimate their annual care costs are going to find themselves in a pinch—with only themselves to foot a hefty hospital bill.
There is also a big-picture benefit to understanding the true cost of care. Part of the reason our system is ailing is that patients spend (other people’s) money like drunken sailors. The reason HSAs and other consumer-driven plans are popular on a public policy level is that they encourage people to be efficient and show some fiscal prudence when it comes to getting care.
Although it’s hard to shop for health care, it’s not impossible. One good resource according to Singletary is Healthgrades.com. The company, as the name suggests, offers ratings and cost estimates for 55 medical procedures.
Also, the Life and Health Insurance Foundation for Education (LIFE), has a cool interactive Web page that shows the cost for certain services. You’ll be surprised to learn that even seemingly minor procedures carry huge price tags—and keep in mind the estimates are only for the procedures themselves—not the cost of room and board. So if you think spending $2,310 on knee surgery is a steal, consider the fact that staying at the hospital and the ensuing physical therapy will raise the cost even more.
[Hat tip]: to Tim McTavish for the Singletary column.
