Americans are taking an innovative approach to controlling health-care costs: haggling with their doctors. Fed up with mounting health bills, consumers are getting as much as 30% off everything from eye exams to fertility procedures just by agreeing to pay upfront.
Patients Find Success Haggling As Health-Care Costs Climb
By DANIEL COSTELLO
reprinted courtesy Wall St. Journal 2/8/02
John Reidelbach was pretty sore after some recent hospital surgery, thanks to a really huge bill. But instead of just paying up, the Atlanta business consultant tried asking for a discount.
To his surprise, he got one. "I said I'd pay part of it right then or all of it over the next few years," says Mr. Reidelbach, who got $950 knocked off the $1,900 bill. "I guess they were in a hurry for the money."
In small but growing numbers, Americans are taking an innovative approach to controlling health-care costs: They're haggling with their doctors. Fed up with mounting health bills, consumers are getting as much as 30% off everything from eye exams to fertility procedures just by agreeing to pay upfront. Others are holding their doctors over a barrel by waiting a few months to pay the bill. Already, a new cottage industry of middlemen who negotiate health-care bills for patients report their haggling business is up as much as 25% in the last two years.
Most of the new bargaining is being driven by health-care costs, of course, which even in this down economy are expected to rise more than 10% this year. But employers are behind this, too. Along with increasing insurance deductibles, many are introducing "lump sum" plans that cap how much a worker can spend on health care. Add it all up, and there's more pressure on employees to bargain. "Haggling with doctors may sound bizarre, but people can't afford to just keep paying more," says Arthur Levin, director of the Center for Medical Consumers in New York. Plus, "When you know your doctor has a big house and a boat, what's the harm?"
Not that there aren't risks to trying to strike a deal. While the American Medical Association says it believes doctors should be able to adjust their fees, experts worry that people too shy to haggle could get left out in the cold, or worse, pay higher rates down the road. Others say negotiating with your doctor might upset the natural patient-physician rapport. Another concern: Patients, or even doctors, will shortchange care for a price break. "It's bound to happen," says Dr. Vincent Riccardi, an internist in La Crescenta, Calif., who nonetheless has haggled with his patients.
Indeed, Marie Tzivas thinks she bought herself some bad bedside manner when she recently negotiated a deal with her fertility doctor. After one unsuccessful $17,000 in-vitro treatment, the 39-year-old New York homemaker told her doctor she "wasn't Celine Dion" and couldn't afford to pay retail again. He agreed to knock 20% off each of her next two procedures, but soon Mrs. Tzivas felt the doctor was rushing through appointments. At times, "he was rude," she says. Her doctor, Zev Rosenwaks, denies that: "99.9% of my patients are happy, and I'm sorry she wasn't," he says, adding that he only offers discounts in special cases.
Gaining Momentum
Of course, people have been haggling for years over the costs of things insurance doesn't usually pay for, such as plastic surgery and psychotherapy. But only a tiny percentage of patients ever asked for price breaks. They were even less likely to do so once HMOs and flat co-payments became so common in the early '90s. Now, though, the practice is gaining new momentum, with patients negotiating either on the initial bill or on their out-of-pocket costs after insurance payments. In fact, according to a recent Harris poll, 17% of consumers asked for a discount on a medical bill in the past year.
More importantly, almost half say they succeeded. That's partly because there's more flexibility in medical costs than many people realize. Most doctors, for example, still charge way more than Medicare's reimbursement. While they argue that those fees don't come close to covering their costs, critics say the disparity is one sign of how much inflation is going on. Case in point: Many doctors charge about $100 for a general office exam, but Medicare only reimburses $25.
For Paul Easton, who is uninsured, paying retail to find out what was wrong with his back seemed absurd. Because the procedure involved an MRI, a visit to the radiologist and a trip to his primary care doctor, the Baltimore resident aimed for a bulk discount. He talked to all the doctors involved, insisted on an upfront total fee, agreed to pay before the procedure and got $600 knocked off a $1,050 bill. "Goes to show that it never hurts to ask," says Mr. Easton.
While there aren't national statistics on how many doctors are willing to negotiate, experts say specialists seem to be doing it the most -- because they tend to charge more in the first place. What's more, even hospitals are starting to come up with their own policies on the matter. In Columbus, Ga., for example, Hughston Sports Medicine Hospital now offers discounts on a case-by-case basis. Emory Peachtree Regional Hospital in Atlanta, meanwhile, has seen enough new hagglers that it now accepts down payments in exchange for as much as 30% off the price of a bill. "If we get a down payment that at least covers our costs, it's better than nothing," says Ken Matteauer, the hospital's comptroller.
To be sure, haggling is still hardly mainstream. Some physicians won't even talk about the practice, fearing more patients will ask for deals. Others feel the discounts will just cost them too much -- especially given that their salaries have actually fallen in real terms over the past decade, giving them less room to negotiate. Another concern? That insurance companies will find out about the behind-the-scenes price-cutting and downgrade reimbursement fees for all patients. "This is what they're all really worried about," says Randal Schultz, a Kansas City, Mo., health-care lawyer.
And then there's the whole issue of what sort of markdown to offer in the first place. After all, unlike retailers, few health-care providers have experience with discounting. "There is no system to this health-care system. It doesn't make sense," says Megan McAndrew Cooper, editor of the Dartmouth Atlas of Healthcare.
If anything, the lack of rhyme or reason in pricing creates a free-market atmosphere in which consumers feel empowered to bargain. And the incentives are only expected to grow as more companies move toward "self directed" health-care plans where patients are given a lump sum of about $2,000 to $3,000 to spend as they want on medical costs. While less than a million people are currently enrolled in such programs, one recent study says 30% of larger companies could begin offering them in the next five years.
Free-Market Financing
How far will haggling go? While it's mostly grass-roots for now, the movement could gain momentum from a new source: professional agents. Dubbed health-care advocates, these outfits -- often staffed with doctors -- will wrestle deals out of other doctors. Healthcare Advocates of Philadelphia, for one, charges up to $200 to help clients and says this business is up 25%. "It was the best $150 I have ever spent," says Stephanie Bichara, of Mt. Laurel, N.J., who hired the company after getting a pricey tab for dental surgery.
Of course, if none of those routes work, there's always the old-fashioned way of getting a good deal: get angry. Last summer, Jennifer Haugen had the quintessential bad doctor day -- an hour wait and three botched needle pricks, followed by just three minutes with the doctor. Furious, she complained to everyone from the office manager to her doctor -- and came away with two free office visits.
"I never yelled," says the 22-year-old Everett, Wash., student. "But I think they knew how mad I was."
Write to Daniel Costello at dan.costello@wsj.com
How to Haggle
Brave enough to ask your doctor for a deal on your medical bills? Maybe you should be. Here are a few techniques patients say work best for getting a break on the bill.
1. Pay upfront. Like most of us, doctors and hospitals prefer not to wait. Some places, like Emory Peachtree Regional Hospital, will even take down payments and arrange for a discounted payment schedule. "It's better than nothing," says a spokesman.
2. Do your homework. Just this week, the American Medical Association introduced a new service on its Web site (www.ama-assn.org/cpt) that lists just how much Medicare pays doctors for different medical procedures. Find the amount and insist on not paying more. One example: A physical-therapy session, which normally runs about $175 an hour, gets about $75 from the government.
3. Get the "bundle" rate. For complicated procedures involving more than one doctor, ask to "bundle" services into one charge. Paul Easton, of Baltimore, got a $600 discount on a $1,050 MRI after asking his primary doctor and radiologist to bundle their two fees and agreeing to pay cash.
4. Forgo your rights. Some docs will take up to 10% off the tab if you agree not to challenge the bill. "It could be risky, but it's easy," says health-care consultant Elizabeth Woodcock.
5. Hire a negotiator. There are companies now that will haggle for you for a small fee. Pass along the bill to them, and they call the doctor to work out a deal on your behalf. Companies like Care Counsel in San Rafael, Calif., and American Medical Consumers in La Crescenta, Calif., have seen as much as a 25% jump in their haggling business.
6. Pick your battles. Providers who do expensive, short procedures like Lasik eye surgery and even some orthopedic surgeries have a lot more wiggle room than those who spend several hours with one patient. Another good bet: Teeth whitening.
original article at http://wsj .com/article/SB1013127002265268960.html?mod=article-outset-box
reprinted courtesy Wall St. Journal 2/8/02
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