Paul Freeman drove 600 miles last year to save himself — and his employer — thousands of dollars on his surgery.
Freeman’s insurer covered his travel costs and the entire bill because a medical center in Oklahoma City could remove the loose cartilage in his knee for about 70 percent less than a hospital closer to his Texhoma, Okla., home.
At first, the community bank CEO hesitated because he thought the lower price would mean lower quality. But he knew if he didn’t make the roughly 10-hour roundtrip trek, he’d pay about $5,000 out of pocket.
“You immediately think, ‘Oh they’re going to take me into a butcher shop, and it’s going to be real scary,’” Freeman, 53, says, noting that instead he had a “wonderful experience.”
People shop for deals on everything from cars to clothes to computers. Why not for health care, too?
Insurers, employers and individuals are shopping around for health care as they try to tame rising health care costs. Companies are doing things such as paying for workers to travel if they agree to have a surgery performed in another city where the cost is cheaper. They’re providing online tools to help people find better deals in their home market.
And some patients are bargain-hunting on their own. Through a website called MediBid, people who pay out of pocket are soliciting doctors, hospitals and medical centers to bid to perform knee surgeries and other nonemergency procedures.
Patients who shop for care represent a tiny slice of the roughly $2.7 trillion spent annually on health care in the U.S., said Devon Herrick, an economist who studies health care for the National Center for Policy Analysis. But he and other experts expect this trend to grow, especially as more companies offer insurance plans that require employees to pay thousands of dollars before most coverage starts.
These so-called high-deductible plans also will be among the cheapest options available on the public exchanges set up as part of the health care overhaul to enable millions of uninsured people to shop for coverage.
Advocates say all the shopping will help control medical spending.
“We waste an enormous amount of money in this country by overpaying for health care,” says John Goodman, an economist and CEO of the National Center for Policy Analysis. “The only way to get rid of waste is to have people compete in a real marketplace.”
Searching for health care deals is a big change for many patients who are used to paying whatever their insurer didn’t.
Surgeries and other major procedures have different prices based on a variety of factors, including whether it’s performed in a big city where care can cost more or in a hospital. And the portion that patients pay can vary widely.
A lot depends on the type of insurance coverage and other factors such as the leverage a provider has in negotiating rates.