Blood Work, MRIs and Other Tests Cheaper in Non-Hospital Settings
Ask the price first, then shop local clinics
Having health insurance is costly enough. In 2018, employees with coverage through their work paid nearly $285 billion for their share of the premium.
And when you actually need care, deductibles and co-pays inflict their own pain. In 2018, workers ponied up more than $375 billion in out-of-pocket costs.
A new study suggests that staying away from hospitals for blood tests, MRIs and other standard items can save you a bundle.
The outsize cost of hospital out-patient services
Insurance companies set the “allowable” charge for various out-patient treatments, and those limits vary by where the treatment occurs. Hospitals are consistently the most expensive:
—A $15 charge is typical for a simple metabolic blood panel conducted in a physician’s office (PO). The same test conducted in a hospital out-patient department (HOPD) has an allowable cost of $101.
—A lipid panel done at a doctor’s office has an average allowed cost of $18, compared to $54 when done at the HOPD.
—For a spinal MRI, the average allowable charge for a HOPD is $1,109, nearly double the average of $582 when conducted in a physician’s office. A similar price differential exists for MRIs of upper and lower joints.
—Hospital out-patient departments are typically allowed to charge $472 for imaging to explore lower back pain. The same procedure elsewhere has an average allowable charge of $178.
—An echocardiogram conducted at a HOPD had an allowable charge of $1,154, compared to $378 when the same exact procedure was done at a physician’s office.
All those data points come from a new report issued by the nonpartisan Employee Benefits Research Institute (EBRI), based on an analysis of nearly 11 million health insurance claims filed in 2018 by patients between the ages of 18 and 64. The study focused on 25 tests and treatments that are often conducted in both settings.
The study also found gaping discrepancies in the cost of administering specialty drugs for inflammatory diseases such as rheumatoid arthritis and multiple sclerosis. A separate EBRI study found a similar pattern for chemotherapy drugs; if the cost of administering 37 chemo drugs was consistent across POs and HOPDs, insurers would have saved 45% in 2016.
Billions more for the same treatment
For just the 25 procedures analyzed in this study, EBRI estimates that employers and employees could have saved more than $11 billion if there had been no price differential based on treatment location. About $9 billion of that would have been saved by employers, and around $2.2 billion would have been direct employee savings.
If pricing were consistent regardless of where delivered, EBRI estimates that combined savings for employees and employers could be more than 55% for chest x-rays, 49% for echocardiograms and 41% for bone-density screenings. If the price differential was erased for the specialty drugs analyzed in this study, savings could be as much as 36%.
Stay out of the hospital, literally
As with all matters health insurance, it would be helpful if public policy or insurer policy did more to get rid of this sort of price discrepancy that has nothing to do with quality of care.
But here we are.
Yet there is plenty you can do.
For starters, when your primary physician suggests testing and recommends a hospital out-patient setting, ask if there is any specific reason why. Ask if there is a non-hospital lab or medical office that they would recommend. Based on this EBRI study, chances are it will be less expensive.
Then check to see if your employer health plan offers access to HealthCare Bluebook, an online cost-comparison service that shows a “fair price” for medical services within specific zip codes. If you were referred to a high-cost site and there are options nearby, see what they charge. Be sure to ask what the rate is if you pay upfront, rather than use insurance. The discount can be 50% or more as businesses are just as eager to avoid dealing with health insurers as you are.
The cash route only makes sense if you anticipate you won’t have ongoing (or costly) medical needs that will exceed your annual deductible.