99% of Us Make This Costly Health Care Mistake

When shopping, most of us look for the best price before we buy. However, there is one exception to this rule: Few people shop around for medical procedures.

A recent academic study found that less than 1 percent of folks with private health insurance searched for prices for an MRI leg scan before undergoing the imaging.

Such an oversight increases such patients’ out-of-pocket costs significantly. Fortunately, you can easily avoid this mistake.

Overpaying by 44 percent

As the study authors — from Columbia, Harvard and Yale — plainly put it:

“We observe that despite significant out-of-pocket cost exposure, patients often received care in high-priced locations when lower priced options were available.

Specifically, study participants bypassed an average of six cheaper providers between their home and the location where they actually got their MRI.

However, if study participants had scheduled their MRI at the cheapest provider within a one-hour drive of their home, their average out-of-pocket costs would have been about 44 percent lower. That translates to paying roughly $170 out of pocket instead of $306.

The study found that insurers would also save money — about 61 percent, on average — if participants had chosen the cheapest provider within an hour’s drive. That translates to insurers paying about $211 instead of $545.

Now, you may not pity your health insurance company. But remember, it passes costs on to you. So, at least theoretically, saving your insurer money helps save you money.

How to shop around for medical procedures

The referring doctor has more influence on where study participants get their MRI than price, the study found. This led the authors to conclude:

“As a result, in order to lower out-of-pocket costs and reduce total MRI spending, patients must diverge from the established referral pathways of their referring physicians.”

In short, don’t assume that the facility that your doctor suggests for a medical procedure is the cheapest: Shop around first.

There are two main ways to compare prices for a procedure:

• Pick up the phone: Look up providers in your area that offer the medical procedure and accept your insurance. Your insurer should offer a paper or online directory of such providers. Then, call each provider to ask about the out-of-pocket price.
• Go online: Use any of a variety of free tools that are designed to help folks compare procedure prices or get a sense of price ranges. Just note this method will not necessarily spare you the task of calling around for prices.

Free online resources that can help you comparison shop for medical expenses include:

• Fair Health Consumer: The nonprofit organization Fair Health runs this website and app that can help you search for prices for both medical and dental expenses.
• Healthcare Bluebook: This company’s website includes a “Fair Price” search tool that is free to consumers, who can use it to find out how much a service should cost in their area.
• New Choice Health: This company describes itself as “a free, consumer-focused health care marketplace where consumers can shop for common medical procedures.” You can use its directory, for example, to look up price ranges that providers in your area charge for a particular service.

Don’t stop at comparing prices of medical procedures, though. You can save money by doing the same for prescriptions in at least some situations. We detail this in “10 Expert Tips for Slashing Prescription Drug Costs.”

Have you ever shopped around for a medical procedure? Tell us about your experience by commenting below or over on our Facebook page.