How to Talk Down Your Hospital Bill

VIDEO: Elisabeth Leamy on saving money by doing research before visiting the doctor.
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The economy has left millions unemployed and mounting medical costs have put millions in debt. With financial hardships in mind, a new Consumer Reports column suggests ways to become a savvy health care buyer and haggler.

"I have become impressed with how often American households are unable to afford their medical bills and medications, and they're doing various things, like not taking their medications or taking someone else's, because they can't afford them," said Dr. John Santa, director of the Consumer Reports Health Ratings Center and author of the column.

Because of this, Santa noted that the best time to talk to doctors about medical bills and financial limits is before a patient has incurred any costs.

"It helps to know from folks the degree to which financial issues are a stress for them, especially related to health," Santa said. "This works best if the physician is aware of this from the start. If you're struggling to keep your head above water, tell the doctor anything he can do to moderate cost is appreciated."

For many medical conditions, there is a wide range of ways to diagnose and treat the problem and the treatments can vary "enormously" in cost, experts said.

"This recommendation makes sense to me in today's world," said Alan Sager, professor of health policy and management at Boston University School of Public Health. "In a more reasonable world, of course, all patients would be insured and all would pay the same price for the same care. And doctors and hospitals would be financially neutral, liberating them to recommend care in light of its clinical value."

When an unexpected exorbitant bill gets handed to a patient, Santa recommends speaking with the doctor who recommended the procedure or treatment to understand why the costs are so high.

And don't ever assume the price on the bill is set in stone.

On average, the hospitals' total charges to patients and insurers are triple the average cost of actually delivering hospital care to the patient, Sager noted. Uninsured patients are usually charged the highest price, which is the hospital's list price for different treatments and tests.

"That's because no big insurance company or Medicare plan is available to negotiate a lower price," Sager said. "Hospitals usually offer to discount their initial bill by 10 to 20 percent from those very high charges when the patient simply asks. That can be offered by the billing or patient accounts department."

For patients hit with an extremely high bill, Sager recommended bypassing the billing department and calling the hospital CEO's office directly. Explain the problem and ask for help, he said.

"People at the bottom usually are not able to cut a bill more than that 10 to 20 percent figure," Sager said. "People at the top have a great deal of flexibility."

But Sager still expressed his doubts that most patients' have the knowledge to barter for their health care.

"It's very hard for a patient to haggle about price of a certain type of care with a doctor," Sager said. "The gaps in knowledge and power are enormous. Do you really want to haggle about price with someone who may be making decisions that will affect your health?"

Dr. Uwe Reinhardt, professor of political economy at Princeton University, took skepticism one step further, criticizing Santa's column by saying it takes things back "to the 19th century."

"[This article] takes us back to the Casbah where you haggle forever with vendors over every item," Reinhardt said. "You think you get good prices, but when you add to the prices the monetary value of your time, you probably pay the highest prices there.

"Imagine the appointment phone call when you tell your scheduling person that you wish to see the doctor not over a medical issue, but to haggle over his bill," Reinhardt continued. "Can you just see how charmed the doctor will be by that thought?"

He said the idea of haggling over the "gazillion medical transactions" that happen in this country is absurd and an unimaginable time waster.

"I tell you what would happen: some free enterprisers would reinvent binding fee schedules again, to escape the huge transaction costs of a medical casbah," he said. "That this was penned by a doctor is even sadder."

But Santa said most doctors would take the time to help patients understand their bills.

"Doctors are mission-driven, and I think even those who are business-oriented would step up and help out," he said. "During times like these, a physician who isn't sensitive to a patient's financial needs is ignoring reality.

"If a doctor isn't sensitive to that conversation, I'm not sure he is a doctor you want to put your health under their long-term care," he said.

Santa said patients should not be reluctant to ask for help.

"Patients should not expect something for nothing, but if you approach the doctor by saying 'I understand you run a business, but I'm asking you to help facilitate things for something more reasonable for me,' you'll likely be met by the doctor with a willingness to be reasonable back," Santa said.

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