How much does an MRI cost? What does your doctor charge for a 15-minute visit?
These questions are almost impossible to answer, and they may be a major reason why healthcare prices have risen so quickly. Without price transparency, consumers have no way to compare prices at different doctors or hospitals, meaning there is no incentive for them to compete.
Fortunately, several startups are working to help consumers uncover the costs of common procedures, with the goal of fostering market conditions that help push down healthcare prices.
MDsave is one such company. Founded in 2012, the company hosts an easy-to-use online database of a number of common medical procedures. A simple search turns up providers in the area and their listed price for the procedure.
Another startup, Healthcare Bluebook, also helps consumers determine the “fair price” for a procedure in their area. GoodRx does something similar for prescription drugs, allowing users to search prices and print coupons right from the site.
In a way, MDsave combines these business models in a unique and innovative way, even going one step further by allowing patients to pay for certain procedures on the website. After receiving an instant voucher, customers can visit their doctor secure in the knowledge of a guaranteed, set price and without the anxiety of enormous bills appearing weeks later.
“Patients who pay out-of-pocket want transparent prices and comprehensive products instead of piecemeal, after-the-fact billing traditionally used in healthcare,” MDsave CEO and co-founder Paul Ketchel told Opportunity Lives.
Any patient, including those with high deductible health plans, can use the MDsave marketplace for out of pocket expenses. But since MDsave does not currently process payments through insurance providers, those with insurance must submit their processed MDsave voucher to be applied against their deductible.
MDsave can be especially vital for people without insurance coverage. Because MDsave transactions avoid the hours of paperwork and cumbersome billing procedures that plague insurance claims, the site can offer up to 60 percent savings on common procedures. The certainty of one prepaid price without any hidden fees or add-ons also helps consumers maintain their peace of mind.
“Every state and city has their own adjustments to a reimbursement rate, and a single provider can have as many different rates for one procedure as they have contracts with insurers,” Ketchel said. Even the left-leaning media outlet Vox released a viralvideo of a writer trying to find out how much his son’s birth would cost (to no avail).
An analysis (click here to view) by Opportunity Lives of the average cost of an MRI that hospitals charge to Medicare revealed that the price varies widely across the country, with red states charging an average of $3,000 to $4,000, while the green states charge only $1,000 to $2,000 for the exam.
Even within states, the price of an MRI can vary widely. Take a look at Texas, where driving to the next town over could yield thousands of dollars of savings.
It’s important to note that these are the prices that providers bill to the federal government. Medicare often has its own range of reimbursement percentages, so the patient usually doesn’t know her out-of-pocket cost until weeks later.
That’s why patients are so eager for price transparency. A 2015 survey by nonprofit Public Agenda found that “56 percent of Americans say they have tried to find out how much they would have to pay out of pocket — not including a copay — or how much their insurer would have to pay a doctor or hospital, before getting care.” But it’s proven difficult as many doctors and hospitals cannot provide an accurate answer on the true cost of a procedure, since so much depends on what the insurance company decides in subsequent months.
MDSave currently works with 104 hospitals in 24 states, but the company is working on expanding to offer a larger selection of providers and accept patients with insurance plans.
“Ultimately, we want to foster healthy communities where every patient, regardless of insurance status, has access to the care they need and the power to choose what care they purchase,” Ketchel said.