Q. Do you have or know of a post on the best practices for minimizing costs of health care services?
A.
This question came in via Twitter, and after a snarky comment about how impossible that would be to do in 140 characters, I promised to write the post. I then promptly wrote a sweet 2300 word post that completely disappeared when I hit save. So after throwing a few things across the room and screaming a few times, I sat back down to write it all again. This happens to me about once a year. The good news for you, dear reader, is the second iteration is always better written than the first.
This is actually a pet topic of mine and one I have considered turning into a third career at some point in the future. There are also excellent blogs on the topic, such as Costs of Care, although they're generally focused on the macroeconomic consequences and not the microeconomic issues I was asked about. Macroeconomically speaking, the main problem with health care costs is that we pretend we have a market-based health care economy, but don't actually have a working market in place. A working market requires both price transparency and skin in the game. The first doesn't exist for almost anyone or anything and the second isn't applicable for the vast majority of Americans who have the majority of their health care costs paid by government or an employer.
As one of the few who pays every dollar of their health care costs, whether through insurance premiums or deductibles/co-insurance, I'm all too aware of the problems inherent in the system. Luckily, my family has been blessed with extraordinarily good health and we've always been able to maintain insurance coverage for potential catastrophes (which we haven't had yet), so we've been able to avoid any health-related financial pitfalls. But given my work in the ED and in the financial lives of thousands of high-income professionals, I've definitely got some great tips to reduce your own health care costs. So let's ignore the politics and macroeconomic issues and focus on what you, Joe Consumer, can do to reduce your health care costs.
Consume Less Care
Health care, like financial advice, is expensive stuff. The less of it you need to consume, the better off you will be. No matter how efficient we make our system, or how the system is paid for, it's going to eat up a large part of our economy and your budget. That's because it is a highly-valued, high-liability service provided 24/7/365 by highly-educated providers using expensive technology. Does any of that sound cheap to you? So any crazy idea you may have that health care shouldn't be a major percentage in the budget of a middle-class American needs to be taken into the corner and have an anvil dropped on it. If you really want to save money on health care, consume less of it. There are three main ways you can do this.
# 1 Live a Healthy Lifestyle
While there are plenty of medical problems that cannot be prevented, there are many that can be. Don't drink alcohol, but if you must, do so in moderation. Don't smoke. Don't use drugs recreationally, even if prescribed by a physician. Exercise regularly. Maintain a healthy weight. Don't eat crappy food. Spend time, but not too much time, in the sun. Don't work night shifts–they're the equivalent of a cardiac risk factor. Maintain healthy relationships. Seek help for suicidal ideation BEFORE a suicide attempt. Practice safe sex and use contraception. Wear a helmet and other protective gear. Wear a life jacket. Learn to swim. Don't drive a motorcycle. Choose a career that won't wear out your back or joints. Don't play football. Lock firearms up, if you must own them at all. Get your immunizations. Prevent what can be prevented.
# 2 Understand Number Needed to Treat
This one concept of evidence-based medicine could save our entire health care system. The number needed to treat (NNT) is the number of a people who must undergo a test or a treatment in order to help one of them. Its corollary, number needed to harm (NNH) is also quite useful. If you are under the misunderstanding that the NNT for most medical tests and treatments is 1, and the NNH is infinite, you are sorely mistaken. When you understand the NNT and NNH of the various tests and treatments offered to you, you can make a rational economic decision about their merits.
For example, consider the NNT of antibiotics for bronchitis. It turns out they don't cure bronchitis, but if you treat six people with antibiotics, one of them that would have had a cough at the follow-up visit will no longer have that. So NNT = 6 in that regard. The NNH? 37, due to adverse effects of the antibiotic.
What about an aspirin for a major heart attack? Everyone knows to chew an aspirin as soon as you start having chest pain, right? Well, what's the NNT? It turns out to be 42. NNH? 167.
Now aspirin is cheap, so no big deal if we have to pass out 42 of them to save one life. But what about something more expensive, like Copaxone, used to prevent flare-ups of MS. What's the NNT? It's 8. But Copaxone costs >$6,000 per month. $6,000 * 8 * 12 = $576K. So now your choice is to either avoid one MS flare a year, or buy a fancy new house every year. If you were paying for that drug yourself (and actually had the means to do so) chances are good you might pass on buying it once you knew the NNT wasn't 1.
How about antibiotics for conjunctivitis? Even in culture-proven bacterial conjunctivitis (most of it is viral), the NNT is 7. Priced out ophthalmic antibiotics lately? Vigamoxx costs $142 for the tiniest bottle you've ever seen, and that doesn't include the cost of the ED or ophthalmologist visit.
Zofran for pediatric gastroenteritis? NNT = 5
Blood pressure meds to prevent stroke? NNT = 67 (NNH = 10)
Antibiotics for ear infections? NNT = 16 (NNH = 9)
Notice that none of these numbers 2 or 3, much less 1. The bottom line is that a great deal of medicine doesn't work at all and even much of what is considered “standard treatment” doesn't work all that well. When you know the NNT/NNH, you can make much wiser economic decisions about how much of your hard-earned income to spend on health care.
# 3 Delay, Delay, Delay
Just like any major financial purchase, delaying expensive medical care allows you to save up more money and shop around for the best price. But there is an added bonus. Thanks to the remarkable ability of our bodies to heal themselves, you will often find that delayed medical care won't need to be done at all.
Obtain Free Care
There is a great deal of medical care that can be obtained for free. For the lower socioeconomic class, this might involve going to a homeless, charity, or sliding scale clinic. For the upper socioeconomic class, it might involve going to call on your neighbor who just happens to be a doctor or physical therapist or PA for a curbside consult. I can't tell you how many of the neighbor kids I've sutured up on my kitchen table. A great deal of medical care is just providing education and reassurance. A surprising amount of information is available from Dr. Google, although extreme care is required in this regard. A class in first aid or basic physiology can pay great dividends.
For the physician readers, we can provide much of the medical care our family needs ourselves. Now I think it's important to only be doing “no-brainer” treatments and stay within your scope of expertise, but I've done lacerations, I&Ds, fracture care, and plenty of ear infections. I don't try to treat my wife's hypothyroidism or my dad's rotator cuff tear, but I certainly provided the (expensive) initial ER treatment for my wife's corneal ulcer before ensuring (inexpensive) next-day follow-up care with an ophthalmologist. Plus a doctor is far more likely to know when something actually needs care and when it doesn't.
You may also be able to take advantage of professional courtesy, which I never expect but often receive. Just be sure you're offering it to your colleagues as much as possible! For example, our group routinely writes off the physician portion of the ED bill for members of our medical staff and other referring doctors.
Have Someone Else Pay For Your Health Care
Almost as good as free care is having someone else pay for it. This might mean signing up for Medicaid, CHIP or other government programs. It means signing up for Medicare at 65 and taking advantage of any Tricare of VA benefits you may qualify for. It might also mean staying on your parents' health insurance until you're 26.
It doesn't, however, mean stealing health care from hospitals and doctors by not paying your bills. Not only is this unethical, but it usually results in your credit score being trashed and collection agencies hounding you for years. You are far better off asking for a cash/hardship discount and setting up a payment plan in that sort of a situation.
Another way to have someone else pay for your healthcare is to take a job with an employer who pays all or part of your health care premiums. They might also fund a Health Savings Account (HSA), Health Reimbursement Arrangement (HRA), or a Flexible Spending Account (FSA.) Take advantage! Health care is expensive stuff. Between our health insurance and HSA contributions, our family spends about $20K a year on health care. Even knocking $5-10K off of that is a huge raise.
Discuss Cost With Your Provider
Here is one of the most important ways to reduce your health care costs–actually talk to your doctor or other health care provider about the costs of care. Let her know that you'd like to keep costs down as much as is safe. Ask whether a test is really necessary or whether it can safely be delayed. Ask if there is a cheaper drug that will be about as good. If you can't afford a prescription, tell your doctor, don't just not fill it. There's often a drug that costs 1/10th as much and works about as well, although there may be more side effects or a less convenient schedule. Carry a copy of the Wal-mart $4 list and ask your doctor if any of those drugs would work for your problem. If prescribed a spray, injection, inhaler, or liquid, ask if a pill would work just as well (pills are almost always cheaper.) Tell your doctor frequently that you're not going to sue her and that you understand that she doesn't have a working crystal ball and that you'll come back or call if there is any problem, especially if it would help you to possibly avoid some additional expenses.
If you're being transferred to another hospital, ask if it is safe for you to go in a private vehicle instead of an ambulance. If an MRI is recommended, ask if a CT would be adequate. CT recommended? Ask about an ultrasound or even a plain x-ray. Go over your medication list at every visit and ask if you can come off any drugs. Ask your pharmacist if there is a cheaper alternative drug or a generic and have them check with your physician about substituting it. Doctor recommending admission to the hospital? Find out if it will be an observation admission or a true admission and what that means for your insurance plan. Can you just hang out in the ED for 6 hours and get a stress test as an outpatient instead of being admitted? Do you really need both a colonoscopy and an endoscopy? Can you get them done at the same time and would that save you any money? Had a dozen normal pap smears and in a monogamous relationship? Do you really need another pap? Find out the costs as much as you can and actually talk about them with your doctor. I'm amazed how rare these conversations are and even when I bring them up, many patients don't even want to have them.
Shop Around
Due to systemic issues with transparency of pricing and the urgency of some medical problems, you can't always shop around. But that doesn't mean you NEVER can. Lots of things can be shopped- recurring prescriptions and labwork, outpatient MRIs and x-rays, cataract treatments, elective surgery, LASIK, and uncomplicated deliveries. Spend a little time and you might find you can cut the cost of care dramatically.
Obtain Care in the Cheapest Possible Setting
A clinic is usually the cheapest place to get care, as it can be provided during banker's hours and with a minimum of technology and staffing expenses. Urgent care raises the price but provides more access and treatment options. True emergencies belong in an ED, but can often be treated as an outpatient. The most expensive setting is the acute inpatient hospital, so avoid admissions whenever possible and get out of the hospital, even if it means going to a rehab facility, as soon as is safe.
The hospital usually isn't the cheapest place to fill prescriptions, get outpatient lab work, get x-rays or MRIs, or have elective surgery done. Become familiar with outpatient pharmacies, labs, imaging centers, and surgery centers. We'll treat your silly, little problems in the ED as best we can, but don't be surprised when it costs you five times as much for the convenience.
Treat Your Anxiety
The most expensive medical problem I know of is anxiety. Anxious people seek care more frequently, have more testing done, and have more treatments done. This results in more “incidentalomas” being found, which then need to be worked up. It also results in more adverse medical effects and other complications. Anxious people are more likely to get addicted to controlled substances, more likely to be admitted to the hospital, and more likely to have defensive medicine practiced on them. If you can get your anxiety under control, you might be surprised how much your health care costs go down (and how much healthier you feel.)
Don't Be Stupid
Finally, it should be noted that many of the tips in this post could potentially result in you getting sicker or even spending MORE on health care if improperly applied. When in doubt, sometimes it is best to spend the money to make sure something isn't serious. You need to be practical and remember moderation in all things. I saw a patient in the ED recently with glaucoma which I treated with the exact same acetazolamide his ophthalmologist had prescribed to him but he didn't fill due to the expense. He could have paid for A LOT of acetazolamide pills for what his ED visit cost. Don't be penny-wise and pound-foolish.
What do you think? What tips do you have to reduce health care costs? Comment below!
This is a great post. Pre-empts something I had partially written and was going to publish later this summer. 🙂
The other thing I’ll add — know who is treating you. Doctor, NP, PA, etc. This isn’t meant to be judgmental — I’m married to an NP — but there are often different approaches between those trained differently.
Could you elaborate for this non medical professional?
Find out if your medications have an “Authorized Generic.” Generics generally work just as well. But they don’t always… especially if the active ingredient of a medicine is not the only important ingredient. For example some generic eye drops cause worse eye irritation and eye allergic reactions than the brand names because of the preservatives in the bottle. The “Authorized Generic,” however, should be the exact same medicine, made by the same company, with just a different label to compete with other generics.
I wish our neighborhood “kid suture friends” still lived in the neighborhood. Not ER docs, but two veterinary surgeons. We had one $2,400 bill for an ER doc throwing two stitches in a rural area (no clinics or urgent care available) and am waiting for the latest ER bill for examining and irrigating another minor head wound.
With that background, another good add-on for families with high-deductible plans and kids is getting a supplemental accident rider. It typically covers medical treatment due to accidents up to the full deductible with a minor co-pay. Kind of expensive on a dollars vs. likelihood analysis, but relatively cheap overall for those of us paying for health care out-of-pocket.
Interesting, although like most insurance, on average surely you’re coming out behind on it, no?
Well, the early ER bill made the math simple, but it still feels a bit like justifying buying lottery tickets. The accident rider is $70 / month for the family to cover our $10K HSA deductible. They picked up the $2,400 tab without complaint (still rolling my eyes about the bill itself) which translates to about 3 years of monthly payments. The simplistic take is we can ride another two years without any accident payouts and still break-even on the supplemental premiums.
Is $840 in annual premiums worth up to $10,000 in payouts for oddball things happening? 12::1 is a pretty lousy benefits ratio for optional insurance coverage and I definitely wouldn’t spend $700 monthly for $100K in potential annual benefits in general.
But…
We spend a lot of family time hiking, camping, kayaking, back country activities in the mountains. Both girls (6 & 8) are also doing things like Ninja warrior classes (the fun way to get injured!!). Just waiting a bit longer to start outdoor rock climbing with them. It seems almost inevitable that someone will be in urgent care / ER every couple of years from an accident related injury that we can’t self-treat or ignore. Since the first $10K of health care comes out of pocket, my crystal ball thinks we’ll be right-side up on the accident rider premiums for a very long time.
Hello Jim! Great post. I’ve been working towards and learning about ways I think will help decrease costs in our broken healthcare system. I believe you are right that the lack of pricing transparency and the fact that so many consumers have no “skin in the game” prevents true market forces from applying. I would invite your readers to read a white paper written by a couple friends of mine about four major drivers of health care costs in our current system and possible ways to fix. It touches on some of your points. Cost of medications and hidden costs and markup at hospital systems for procedures and imaging.
http://aid.wildapricot.org/resources/Documents/WHITE%20PAPER-Saving%20America%20from%20Four%20Horsemen%20of%20Health%20Care%20PPA%20AID.pdf
I pretty much agree when it comes to using specialty services such as the ED or Urgent Care. For some things, I don’t even go my regular MD. Example: I was diagnosed years ago with arthritis in one foot. I am now getting similar pain in the other foot. When I see the MD for something else, I may or may not mention it, but it makes no difference. OTOH, I went to Urgent Care last year because I was running a high fever (maybe 103) and my throat hurt a lot. I’d had strep as a child and was concerned I might have it again. It turned out to be some sort of nasty virus going around. I don’t regret going to Urgent Care that time because it could have been serious.
So, my suggestion is that you should know your own body. If something seems off, get yourself to the nearest ED or Urgent Care. And if you think something is really wrong, but the MD dismisses it, tell them how you feel or even ask for another doctor (if possible).
Excellent article and as a non-medical person who has been very frustrated by the lack of price transparency for procedures and tests, you’ve given me much to think about.
My approach these past few years has been to seek out doctors or hospital appointments in the countries i visit often (singapore, India) and set up planned checkups and procedures (root canal, foot surgery) there. The costs are clear up front and even with flights and the cost of care, I still pay less than my total deductible for my insurance.
This didn’t work for my delivery of course! But it has taken out some of my anxiety about a crazy bill showing up one day! And best of all I dont have to interact with insurance companies at all.
As a Radiologist I have seen a huge change in imaging done after hours in the 25 years I’ve been practicing. 25 years ago it was RARE for any CTs to be performed after hours, and we had to drive in to the hospital to read them. Now, its CT imaging 24/7 at our larger hospitals and we have one or two Docs in house at our central office all evening and all night reading cases nonstop. The majority of them are negative or worse as WCI stated above, we find “incidentalomas” which then need further work up or follow up. Its my impression that CT has become the stethoscope for the ER, they get ordered at times before the patient has been seen. Our area has seen an explosion in NPs in the ER which has compounded the ordering of “emergent” imaging. Recently I had an NP order a CT of the hip in an elderly patient with hip pain and no trauma. The NP thought the xray she ordered first looked suspicious for a fracture so she ordered the CT (a Radiologist hadn’t had the chance to read it before she did that). The xray clearly showed common hypertrophic spurring around the femoral head, not a fracture. This kind of situation is becoming more common with the changes in our health care delivery. The expenses are going to continue to increase as a result. I know that the medicolegal environment that most of us practice in is a big cause of this change, along with the fact that CT imaging is a very fast and accurate way to find out whats going on, and with a negative CT they can be sent home without worry. The radiation and cost are issues. I’m sure if the fear of being sued was less there would be more restraint.
This post is proof we need single payer
I got electrical stimulation therapy from my friend, a veterinarian! He insisted on helping me when I got tennis elbow from my Taiko drumming. It was free and helpful. Pretty funny. I wonder if other people have been treated by a vet?
Excellent article, thanks!
Best treatment \ cure (!) for tennis elbow ( from golf, racquetball, etc.) is this exercise:
http://www.thera-bandacademy.com/tba-exercise/FlexBar-Tyler-Twist-for-Tennis-Elbow
These tips are very timely since Fidelity Investments just released a survey about the health care costs that couples, men, and women would pay for in retirement. A couple that is 65-year-old would have to pay for $280,000 health care costs in retirement. A man would have to pay $133,000 while a woman would have to pay for $147,000 for health care costs. I agree with all the tips here especially living a healthy lifestyle. In addition to these tips, it’s also a good idea to buy smart insurance products like long-term care insurance and Medicare supplement plans, and considering HSA too.
I’m late to the party but still glad I found this!
Your post reminds me of my last trip to the ER. I slipped while snow shoveling and cut my lip pretty bad. The next day it was going to be 50 F, and I didn’t have anywhere to be before then.
We can’t control everything about our health, but smarter decisions = lower costs!
Have you had much experience seeing patients receive continuity of care from insurance provider if their doctor is no longer in-network? My wife is expecting, and also happens to be an OB resident at the hospital where she is planning to deliver. We opted to use a high-deductible plan with UnitedHealthcare through my work, for access to HSA and lower premiums. We didn’t decide to start a family until after our enrollment window last November, otherwise we may have picked a different plan or chosen hers provided through hospital.
Here’s the issue – baby is due in November, and my wife’s hospital (largest hospital system in the state) just told her that United would no longer be accepted starting in July. My wife wants to continue to see her doctor, and be delivered in the hospital where she is familiar with colleagues, their experience, etc. The insurance still pays for out of network coverage, just with a higher deductible/out of pocket max and higher coinsurance (40% vs. 20%). That might be acceptable, but balance billing is allowed in our state, which could make our out of pocket expenses very high, especially if there were any complications.
I’ve looked into applying for continuity of care, which would only be allowed for pregnancy if moderate/high risk, or in 3rd trimester. I was told we could apply for this when she gets to her third trimester, but would have to apply for each doctor that may be caring for her. Looks like the largest expense will actually billed by the hospital directly based on the insurance cost projection (based on in-network), and i’m not sure if i can request an exception for the entire hospital system or not.
I realize easy solution would be to see another provider in-network, but if this change does take place, it eliminates the 2 best hospitals in our city. Crossing my fingers that a compromise is made between United and hospital, and that we are able to maintain coverage. if not, ideally would like to get current hospital/doctor on “in-network” status through the continuity of care request, but obviously don’t want to do this if it’s going to result in a large financial toll to us.
Any advice on how to proceed?