How to Reduce Your Hospital Bills

Unlike almost every other industry, the medical industry loves to keep prices secret. This is because they make more money. You can be sure that you are receiving fair prices by shopping for your medical care, demanding transparency in pricing, negotiating the best price and reviewing your bill carefully.

The price that hospitals charge for open heart surgery is a striking example. Open heart surgery that involves a replacement of a heart valve is performed at Valley Hospital Medical Center in Las Vegas. The cost to perform this procedure costs $233,259 by the Valley Hospital Medical Center. For the same procedure, the Mayo Clinic is charged $79,601 by one of the best heart care centers in the country. Another example is the article published by The Miami Herald about hospital pricing in Florida. After a car accident, a woman went to Palmetto General Hospital in Hialeah to receive physical therapy. She tried to figure out the cost of treatment but was unsuccessful. After 11 sessions, she began receiving $1,560 per session. For $50, she was able find the same service at Memorial Regional Hospital in Hollywood, FL.

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Hospital Overcharges

Anyone who has ever attempted to read a hospital bill will tell you that it can be difficult to comprehend. Hospitals can use medical codes and technology to conceal improper charges. Experts estimate that hospitals overcharge patients by overcharging them $10 billion annually, which is an average of $1300 per stay.

Hospitals were known to charge $129 for “mucus recovery systems” which was actually a $2 box with tissues, $57.50 for “free” teddy bears, and even $1004 for toothbrushes. People rarely see an itemized statement and don’t know what they are being charged for.

Nora Johnson, a medical billing advocate was quoted in a recent article stating that more than 90% of hospitals bills she audited had gross overcharges.

Hospitals will often go to great lengths to discourage patients from spending too much on their bills. There are certain things you can do so that you don’t get taken for a ride.

  • Call the billing department of your hospital to find out what they will charge you for a room. Bring your own tissues if the charge doesn’t cover something you may need.
  • Ask your doctor for a cost estimate.
  • To avoid high prices for medication purchased at the hospital, bring your prescriptions.
  • Keep your own list of medications and tests, if possible. Hospitals are known to charge women for their pregnancy tests, and men for their newborn tests.
  • Don’t pay the bill until you leave the hospital. This may seem like a requirement, but it’s not. Compare the cost estimate you received before paying your bill carefully.
  • Ask for an itemized bill and a detailed explanation of any items that you don’t fully understand. Do not accept “lab fees” and “miscellaneous charges” as answers.
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Health Savings Accounts Encourage Price Transparency

HSAs are plans with a high deductible. They offer a savings account where tax-deductible contributions may be made. You can use the money to pay deductibles or other charges that are not covered by your health insurance. Health savings accounts have the great promise of allowing healthcare providers to reintroduce market competition. All of us who took Economics 101 know that the balance between supply and demand gives the public the best value at the lowest cost. If company B can produce the same quality widgets that company A at a lower price, the average price for widgets will drop. As businesses compete for customers, the average quality of a widget should increase. This system is amazing and has helped the United States become the richest country in the world.

This system is not in place when it comes healthcare because the consumer hasn’t usually been paying the bill. The consumer isn’t concerned about the cost of the service and many doctors, hospitals and pharmacies won’t reveal their (highly charged) prices.

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Health Savings Accounts have changed all of that. These plans have been purchased by millions of people because they offer lower premiums and tax benefits. This has made it easier for consumers to be aware of the prices they pay. HSA holders can demand upfront prices from medical providers and force them to be competitive on quality and price, just as any other business.