What Does My Health Care Cost?

The halls of Congress look nothing like the waiting and examination rooms of a doctor’s office. Lawmakers may talk about health-care costs, but they don’t work in the medical trenches, where my patients and I are shielded by insurance from knowing both the real price and the negotiated price of a given service. Not knowing and not paying directly leads to overuse (as long as deductibles have been met), as my patients come to see me when they don’t need to, for every upper-respiratory infection or sprained ankle or sleepless night. Doctors like me may then defensively overtest with an x-ray or overtreat with an antibiotic Z pack or sleeping pill to make our patients happy. Neither of us feels the pain of it in the pocketbook.

Last week I asked every patient who came to see me if they could guesstimate the price tag of their latest test or treatment. No one got it right, or even came close to predicting the actual price. CT scans were often billed officially at close to $500 and MRIs over $1,000, but few patients realized that there was a second price — the lower, contracted rate that the insurer worked out directly with the radiology department or the lab that drew and analyzed their blood tests. Yes, patients could have found this bottom-line number simply by looking at their insurance Explanation of Benefits sheet, but few were in the habit of doing so. And why should they, when all they really cared about was the fact that the test or procedure was covered? Few of my patients knew that their insurer also negotiated with the drug companies to whittle down the cost of medications to help preserve their profit.

Fact: Health insurance shields my patients from true costs even as it interferes with their quality of care. When insurers charge high co-pays (frequently over $3,000 for Medicare co-pays for new cancer drugs that cost over $100,000 a year), my patients may forgo life-extending treatments. It’s also becoming increasingly common for insurers to not cover expensive new drugs that have clear benefit (such as cholesterol-lowering PCSK9 drugs) but haven’t yet been proven to save lives. Amgen’s PCSK9 drug Repatha costs $14,000 per year, and insurers often don’t cover it; in fact, a new study looking at 44,000 prescriptions for PCSK9 drugs showed that only 17 percent were covered. The other 83 percent were faced with sudden sticker shock.

Health-insurance companies dictate which lab or facility or specialist my patient can go to and what medications he can take, impacting the art of medicine. Some labs are more accurate than others, yet I frequently have no choice which to use. A premium is an entry fee into a system where choices aren’t your own. The best mammographer I know doesn’t take any insurance, but I can rarely convince my patients to pay cash to see her, even though she discovers nodules that other mammographers miss while dismissing benign calcifications that other radiologists perfunctorily biopsy. Patients feel that they pay once for their premiums and shouldn’t have to pay twice. Can you blame them?

An insurance premium is an entry fee into a system where choices aren’t your own.

Let’s face it, price shielding benefits drug or device manufacturers, service providers (including the radiology suite), and the health-insurance company, but it does not benefit the patient.

A 2014 report by the Gary and Mary West Health Policy Center indicates that by providing prices to patients, doctors, employers, and policy makers, insurers could save $100 billion in health-care costs over a decade. Effective measures studied included requiring electronic health recordings to provide prices to physicians when we are ordering diagnostic tests, as well as requiring private health plans to provide personalized out-of-pocket-expense information to enrollees.

The money saved would be even greater if my patients had to pay out of pocket to begin with, using tax-deductible health-savings accounts for non-essential services such as cold or allergy medicines, skin creams, or a routine doctor’s visit — say, one for bronchitis, back pain, or a headache. Patients would be motivated to hold off going to the doctor for just a sniffle, and to choose the best product or provider at the best price when they are really ill. And we doctors would be able to spend more of our time caring for our patients rather than jumping through insurance hoops for approvals and reimbursement.

I can’t blame my patients for being frustrated when they are given false promises and have no idea what the cost of a test or treatment is or how difficult it is for me to arrange it.

What to do? Improving price transparency and scaling back on insurance coverage while increasing out-of-pocket tax-deductible expenditures is a very good place to start. In 2015, according to the National Health Expenditures Fact Sheet, Medicare and Medicaid expense totaled over $1.1 trillion, or 37 percent of nationwide health-care spending, and private health insurance totaled over $1 trillion, or 33 percent. With 70 percent of spending covered by insurance, Americans spent $338 billion out of pocket on health care, or just 11 percent of the total, the lowest in the industrialized world.

Insurance is an outdated one-size-fits-all model that won’t routinely cover emerging technologies and treatments like PCSK9 drugs for cholesterol that improve quality of life and lead to fewer cardiac events, but won’t necessarily keep you alive longer. Medicine is becoming more personalized and genetics-driven all the time. In the near future an iPhone app will record your vitals and monitor your daily risks for heart problems, etc. You will have to pay for it, which is a good thing, not bad.

If my patients know what they are spending and have to pay at least part of it themselves, they will make wiser and more frugal choices. Doctors will be happier and tests and treatments will be more essential and effective.

— Marc Siegel is a professor of medicine and the medical director of Doctor Radio at NYU Langone Medical Center. He is also a Fox News medical correspondent.