Cash Payment Arrangements Send Mixed Messages to Patients

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As financial resources become dearer for everyone in the healthcare industry—from payers to providers to patients—leverage gained at any point in the system usually requires a release of pressure elsewhere within it.

Last week, the LA Times published an examination of the impact of cash-price payments for common imaging procedures to patient bottom lines, and the results were significant. Excluding physician fees, cash-paying, uninsured patients were quoted prices that were as little as 10 percent of the cost of the same study for patients carrying insurance.

“The difference in price can be stunning,” reports the Times. “Los Alamitos Medical Center…lists a CT scan of the abdomen on a state website for $4,423. Blue Shield says its negotiated rate at the hospital is about $2,400. When The Times called for a cash price, the hospital said it was $250.”

Such mark-ups are unwelcome discoveries for patients paying ever-increasing premiums for their care. A significant uptick in the cost of outpatient services was observed in the recent Health Care Cost Institute study, which showed a 5.5 percent jump in such care from 2009 to 2010, and a 10.6 percent jump in the estimated average per capita out-of-pocket costs for beneficiaries in the same period.

Even before these pricing policies were announced, some insurers have tried to capitalize on these terms by incentivizing patients to shop around at lower-cost providers for their care. Other pricing experts advocate using nationwide price-matching websites or simply trying to negotiate lower fees individually with their practitioners. The whole system is further complicated by different variables like whether the cash price benefit is still a bargain if it doesn’t count against a big deductible

In the end, everyone just wants greater transparency from the whole process.

"It frustrates people because there's no correlation between what things cost and what is charged," said Paul Keckley, executive director of the Deloitte Center for Health Solutions, in the Times article. "It changes the game when healthcare's secrets aren't so secret."