With her doctor unable to see her one day last March, Patricia Schaub decided to drive from her home here to Ocean Care Center in Point Pleasant to get treated for a cough, headache, and overall blahs. She was diagnosed with an upper respiratory infection, and given a Motrin and prescription for cough medicine and antibiotics. Ten minutes later, she was on her way home. What did the visit cost? $1,315. “I can’t even tell you how I felt when I opened the bill,” Schaub, 63, said. “So I called them and I said, ‘Are you kidding me? You’re charging $1,315? I was there 10 minutes.’ I said, ‘You gave me a prescription. This is ludicrous.’ So they said, ‘This is what the fee is.'”
As consumers dig deeper to into their own pockets to pay for their health care, they are finding a basic tenet of the free market missing from the equation. Namely, they rarely know how much the service costs before they buy it.
Health care providers say there is a reason. The economics are complicated. Doctors, for example, might not know what services they need to provide until after they examine their patients. And even then, they might have negotiated different prices with different insurance companies.
But public health advocates are ramping up their calls on hospitals, doctors, insurers and regulators to provide more transparency about health care prices, noting that in the age of Obamacare, when patients have more responsibility for their own health, they need as much price information as they can get.
“With high deductibles and cost-sharing in new plans, consumers are having to pay more attention to price,” said Linda Schwimmer, vice president of the New Jersey Health Care Quality Institute, a research and advocacy organization. “But without any sort of functional or transparent marketplace, the consumer is left making blind decisions.”
“Send me 100 telephone poles”
Schaub has her insurance through Verizon Communications, where she worked in the purchasing department until she retired in 2003. And her policy is enviable. She has no deductible, and she only had to pay $75 for her visit; her insurance company ultimately paid $1,108. (The statement from the facility showed that the Motrin itself was free).
After talking to Ocean Care Center, she called her insurer and expressed her outrage. The representative told her not to worry; they would cover most of the cost, Schaub said.
Schaub’s response? That’s not the point. Health care costs are shared by everyone. Had she known the price ahead of time, she would have waited a day or two until her doctor could have seen her, she said.
At Verizon, she purchased everything from manhole covers to telephone poles. “You can’t just call up and say, ‘Send me 100 telephone poles,’” Schaub said. “You need to know what the price is. If you don’t like their price, you shop around until you get the best price.”
There is an explanation for the eye-opening cost. Ocean Care Center in Point Pleasant opened in 2004, a couple of years after Point Pleasant Hospital closed. It was the state’s first free-standing emergency department.
It looks like an urgent care center. In fact, that’s what Schaub thought it was. But it operates around the clock and has all of the high-tech bells and whistles – and operating costs – that come with the designation of an emergency department.
“Because of the technology and resources and personnel and the way they are set up, it’s very high end, and they typically cost more than a visit to an urgent care center,” said Dean Lin, president of Brick-based Ocean Medical Center, which is owned by Meridian Health.
Patients fly blind
The Patient Protection and Affordable Care Act, commonly known has Obamacare, set out to provide near-universal health insurance and slow down the rapidly escalating cost of health care.
Unlike Schaub, many consumers are finding that the most affordable policies come with deductibles that force them to pay $2,500 or more out of pocket before insurance kicks in.
The potentially steep price tag is a free-market idea designed to make consumers think twice before heading to the doctor or hospital when they get sick. Or they can at least shop around for the best price, fostering competition and, ideally, putting the brakes on cost.
But a health care waiting room isn’t like, say, the counter at Smashburger, where prices are on full display. The health care industry has a tangled web of prices often determined through negotiations with insurance companies. Consumers generally learn of the cost long after their visit.
“When you buy almost anything else, you know what you’re paying before you get the bill,” said Stuart Guterman, senior scholar in residence at AcademyHealth, a Washington, D.C., trade group.
The scramble is on to bring transparency to the process:
•New Jersey lawmakers have introduced a bill that would require health care providers to tell patients in advance if their procedure isn’t part of their insurance companies’ network. Out-of-network procedures are more expensive.
It also would publish a Healthcare Price Index that would list median prices of in-netwok insurance claims.
•Some insurance companies have begun to offer their members a chance to comparison shop online. New Jersey’s biggest insurer, Horizon Blue Cross Blue Shield, this month is rolling out an online tool that lets its customers see what providers charge for procedures.
•Other companies and researchers are compiling data to shed light on costs. Among them: Guroo, created by the nonprofit Health Care Cost Institute, is working on a website that would allow consumers to see the average cost of dozens of procedures.
•Some practices are taking steps on their own. Kristy Caldarella, owner of Abilities in Action, a pediatric therapy provider with offices in Shrewsbury and Wall, described a complicated system in which prices vary depending on the patient’s insurer.
But “our parents, when they call to schedule their children with therapy, we tell them exactly how much it’s going to cost,” Caldarella said. “As consumers, we felt it was really important for parents to know up front what we bill their insurer and what their responsibility will be.”
Officials from both the New Jersey Hospital Association and the Medical Society of New Jersey said they empathize with consumers.
“Unfortunately it’s not one-stop shopping right now,” said Kerry McKean Kelly, spokeswoman for the hospital association, a trade group. We know we need to find a way for the industry to make this easier for consumers.”
Four months after her visit to Ocean Care Center, Patricia Schaub said she was so steamed that she briefly considered not paying the $75 for the visit, until she decided it wasn’t worth the fight; her credit score would take a hit.
“If no one makes a stink about this, it will continue,” she said. “Someone’s going to get the fallout from this. This $1,315, somebody’s going to be paying for this somewhere.”
Michael L. Diamond; 732-643-4038; email@example.com
By the numbers:
3.9 percent: The increase in per capita health care spending per insured in 2013.
-0.5 percent: The decline in utilization for outpatient services in 2013.
5.8 percent: The increase in price paid for outpatient services in 2013.
0.8 percent: The increase in utilization for professional services in 2013.
2.5 percent: The increase in price paid for professional services in 2013.
Source: Health Care Cost Institute