Q. Do you have or know of a post on the best practices for minimizing costs of health care services?
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.
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!