Health Care Discounts: Do You Dare Ask?

A health care consumer movement?

Is the ever-increasing cost of health care giving rise to genuine consumers of health care services? Possibly. But medicine isn't like other big businesses, and health care isn't just another product. So the aspiring health care consumer faces obstacles that can make getting a deal on a new car look like child's play.

First, there's health insurance. It protects many of us from the pain of paying the real cost of health care, or even knowing it. However, even if your insurance doesn't protect you enough, you may find that it doesn't leave your health care provider much room to bargain. That's because insurance companies, especially preferred provider organizations (PPOs), do the negotiating for you. In PPOs or other network plans, participating providers agree to discount their fees on covered services for plan members. A provider that charges a plan member less than the discounted amount may risk breaking the contract, a state law, or both. Nonnetwork providers "contract" with insurance companies when they file a claim for payment. After that, they can't reduce their covered cost--the amount the insurance benefit is based on--without committing insurance fraud.

If you don't have insurance to cut your out-of-pocket costs, bargaining for health care presents other dilemmas. First, you may need to overcome the fear of challenging "the doctor's authority." That done, what guide do you have--other than your bank balance--for determining the "fair" price for an MRI (magnetic resonance imaging) or a surgical procedure? What "features and benefits" do you use to compare two doctors or two hospitals with each other? Do you know what questions to ask--and what answers to look for--when assessing a provider's credentials? And if your life or your child's were at stake, would you entrust it to the lowest bidder? The person who balks at paying for a routine office visit often will pay any price to treat a life-threatening disease or injury. These are some of the considerations that distinguish health care from other consumer markets.

Sometimes, it doesn't hurt to ask

If a health care consumer uprising is unlikely, should you give up before trying to negotiate with your health care provider? Not at all. Remember, about half of the people surveyed who asked for a price break got one--that's between 5% and 8%. Not great odds, but good enough to leave room for hope.

Medical services--Before you start, do some research. Talk to the billing manager in your doctor's office or hospital about how they set their standard (nondiscounted) fees. If you have insurance, pay attention to your explanation of benefits (EOB) statement, especially to the provider's actual charge and the insurer's allowed amount. (Never pay more than the allowed amount.) If you don't have insurance, ask a friend or family member who does have it to share some of that information with you. That will give you a sense of the discounts insurance companies get for their members.

A good place to start bargaining is with a service that usually has little or no insurance coverage, such as laser vision surgery, cosmetic surgery, dental care, or mental health treatment. Providers of these services have many patients who pay out of their own pockets. This may make them more sensitive to your concerns about cost.

To get around the "fair price" quandary, focus on the amount of the reduction you want rather than a specific price. For example, you could ask for a flat percentage discount, like 10% off. Or, if you have insurance and the provider charges more than the plan's allowed amount, ask the provider to waive that excess amount. Some providers offer a discount for cash (or check) payments. See if you can get the same discount even if you can't manage to pay the full amount immediately.

Consider making your request in person rather than by phone or in writing. Start with your doctor, where the relationship is strongest, and be prepared to be sent to the billing department for the final decision. And, as your mother used to say, "Ask nicely." A polite and well-thought-out request will get a better hearing than a demand.

Prescription drugs--Price shopping is more straightforward for prescription drugs than it is for medical care. So you may be able to cut your prescription costs without bargaining. The drugs are the same at every pharmacy. The pharmacy's markup makes the difference. So find out which pharmacy has the lowest price for your prescription and go to that pharmacy.

If the lowest price is still too high, it may be time to negotiate. More of the respondents to the survey cited earlier asked for and got a price break on prescriptions than on other services. Maybe the pharmacy would agree to waive its markup or charge you the discounted rate it offers major insurance plans.

If negotiating on the price of a prescription doesn't work, you still have some money-saving options: Ask the pharmacist or your doctor for free samples of the medication. Ask your doctor about other, less expensive, medications that you can take. Taking a generic instead of a brand name drug can cut your cost in half. And among brand name drugs, you often can find effective alternatives to the costly highly advertised brands. If you take a maintenance drug, you can cut your cost per pill by ordering a larger supply--for example, 90 pills instead of 30.

Finally, whether you have insurance or not, whether you choose to negotiate or not, it's smart to act a little more like a consumer than a patient. Each of us pays at least part of the full cost of medical care, directly or indirectly. Be aware of that cost. Make your doctor aware of it. (You might be surprised how many of them are not.) And think about how you can control that cost without risking your health.

Published October 28, 2002