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Tuesday Mar 31, 2015

High Deductibles: Out-of-Pocket Shouldn't Mean Empty Pockets

Hearing patients ask, "How much is that going to cost me, Doc?" makes many physicians cringe. But with rising insurance deductibles, it is a question that is being asked more frequently.

Primary care physicians are busy; we're formulating differential diagnoses, satisfying meaningful use criteria, motivating patients to check their sugars and completing seemingly endless paperwork. Given the general lack of knowledge(www.ncbi.nlm.nih.gov) in this arena and time constraints, it might seem impossible to also help patients navigate the murkiness of out-of-pocket costs. Wanting to pass the buck is understandable, but doing so likely will impact patients' clinical outcomes. No matter how medically appropriate, many of our orders and recommendations go unfulfilled(www.ncbi.nlm.nih.gov) because of financial considerations.

Patients are not capable of answering the question, "Is the newest blockbuster drug really superior to older, generic options?" And even if they were, they also would need to know, "Is the benefit worth the increased cost?" Nobody is better equipped to answer these questions than their physicians.

Practicing in a safety-net clinic in residency -- and now in a direct primary care solo practice -- I have learned to navigate the "How much?" question with more comfort.

One of the most important lessons I've learned is that having an insurance card in your pocket does NOT necessarily lead to lower prices, particularly on labs, radiology and meds. In fact, often the opposite is true. Just making sure a facility or provider is in-network is not a strategy to insure fair pricing. Regardless of a patient's insurance arrangements (or lack thereof), the most important thing is to be open and proactive about financial discussions.

When prescribing or reviewing medications, ask patients if they have difficulty paying for them. We should not always assume insured patients have $10 copays for meds(www.healthpocket.com). Pharmacy pricing can vary dramatically, and without obvious patterns among retail chains. We frequently reference GoodRx.com(www.goodrx.com) to price-check meds before sending prescriptions to pharmacies. This doesn't factor in insurance coverage, but using coupons is often cheaper than going with insurance copays (if they exist). Spending three minutes looking can often result in saving a patient hundreds of dollars per year on a single medication.  

Medical practices can legally dispense and sell prescription meds in most states, and we have found it simpler -- and better for patients -- to provide in-house dispensing of many generics. Being fully membership-fee supported -- without a need to profit off any ancillary services -- we are able to offer patients meds at wholesale prices(neucare.net) without markup. We can often sell meds for 50 percent to 90 percent less than most pharmacies, which is a huge plus to being members of our practice. Even with a small markup and profit, on-site dispensing can be a big help to patients versus navigating the pharmacy world.

When ordering diagnostic tests, we encourage patients to ask for total costs before proceeding. Although it can take some work to get a price, it's much better than getting stuck with a bill that could've been hundreds or even thousands of dollars cheaper elsewhere. If billing an insurance plan, the insurance-based fee (ironically often called "discount" price on explanation of benefit forms) has already been set in contract with the facility, so that is not negotiable. But, insurance-based prices can be determined ahead of time to avoid surprise bills later.

When shopping for a price for a test, finding a baseline fair or average price for the service is a good start. A few resources we've found helpful are ClearHealthCosts.com(clearhealthcosts.com), HealthcareBlueBook.com(healthcarebluebook.com) and Guroo.com(www.guroo.com).

To bypass the need for our patients to go shopping, we have contracted out many ancillary services, including labs. As with medications, we can charge our members our negotiated rate without markup. In fact, we purchase basic labs (lipids, hemoglobin A1c, thyroid-stimulating hormone, metabolic panel, blood counts) so cheaply we decided to provide them at ZERO cost to our members(neucare.net). We price other labs at a small markup (no more than $5 dollars each) to offset the no-cost labs so we break even overall.

We have found we can offer patients an average of 50 percent to 70 percent savings versus insurance-based prices and 80 percent to 95 percent versus self-pay prices. As with medications, subcontracting lab services could be easier and cheaper for patients than dealing with insurance hassles and profitable for practices with even small markups.

For radiology services, we have developed a local network of facilities with cash-friendly prices. It may seem unreasonable for patients to pay cash for things like CTs and MRIs, but we have found steep discounts when paying cash upfront (i.e., $450 for MRI). Cash discount price is often less than 20 percent of what co-insurance (after meeting the deductible) would be at other facilities. We subcontract X-ray technical service with a local orthopedic group ($25 to $35 per series), and I don't charge patients for my interpretation -- not bad, considering our local hospitals charge $100 to $300 for X-rays.

For the foreseeable future, being a comprehensive patient advocate will involve financial considerations of care and discussions with patients. Thankfully, many organizations are starting to push for transparency in health costs and provider education to help make this part of our job easier. If you'd like to learn more, you can follow the #hcpt hashtag on Twitter, or check out CostsOfCare.org(www.costsofcare.org) and the Choosing Wisely campaign.

Ryan Neuhofel, D.O., M.P.H., owns a direct primary care practice in Lawrence, Kan. You can follow him on Twitter @NeuCare. He will be speaking at the Direct Primary Care Summit(www.dpcsummit.org) in July in Kansas City, Mo.

Posted at 04:18PM Mar 31, 2015 by Ryan Neuhofel

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