- Thank you to Ancestry for supporting PBS.
I don't know about you,
but I'm never thrilled to go to the doctor.
Needles, sickness, injuries
and that crinkly paper they make you sit on.
But the worst part is the inevitable headache
of trying to pay for the visit.
- The American medical billing system
is like putting salt in our metaphorical wounds.
It's standard to have no idea of what a procedure will cost
when we agree to it.
Then, six weeks later,
this piece of paper written in an alien language
appears to inform you
that you owe such and such for such and such,
and how would you like to pay for that?
- If we want to engage productively
with our healthcare system,
we need to have a basic understanding
of what's going on behind the scenes.
Only then can we protect our health
as well as our pocket books.
(bright music)
- [Philip] When measured by GDP,
the US is one of the wealthiest nations on earth.
So it's understandable that we, as a group,
might pay more for the healthcare we receive.
But when you compare what we pay as a ratio to our GDP
to other similar countries, we are an outlier.
We pay far more for our healthcare
than the size of our economy would suggest.
- [Julia] No shortage of theories as to why that is.
Issues like defensive medical care,
bloated administrative costs,
higher doctor pay and drug prices all contribute.
But when you start sorting through the mound
of complicated data,
it's really hard to single out the clear villain.
Many healthcare experts believe
that the main reason our spending is so high
is because the price is high.
Don't get that confused with the cost.
The cost of a good is the expense required
to make and provide the service.
The price is the amount
that the customer is willing to pay for it.
In layman's terms, the cost of our healthcare
actually isn't unreasonably high, but the price markup is.
- [Philip] Normally, a seller's market occurs
when demand exceeds supply.
This results in an increase in competition,
which drives up the prices
and allows the bulk of the pricing power
to be wielded by the seller.
Theoretically, a free market economy could balance this
by allowing consumers to not buy the product outright
or buy their products elsewhere.
And this happens to a degree in the form of medical tourism.
But for most of us,
flying to Mexico or Thailand for a medical procedure
simply isn't an option.
And as for foregoing medical care completely,
good luck with that.
- A critical factor in keeping it this way
is a criminal lack of pricing information.
Think about it.
When do you finally know how much your care costs you?
Not til weeks after you've already bought it.
We also typically don't pay for it directly ourselves,
thanks to insurance companies.
Medical pricing sheets
are traditionally disclosed only to them and not consumer.
Imagine if you wanted to buy a house,
but you couldn't see the listing price before closing.
Only your realtor, working on commission,
is allowed to see the price in advance.
That's basically what's happening here.
- The way other wealthy countries,
even those with large private insurance companies,
have dealt with this is through government regulation.
But for the most part,
the US has completely stayed its hand.
Stanford economist, Victor R. Fuchs said it this way:
"Governments usually eliminate
much of the high administrative cost of insurance,
obtain lower prices for inputs
while keeping tight control
on the number of specialist physicians
and expensive technology.
In the United States,
the political system creates choke points
for diverse interest groups
to block or modify the government's role."
Suddenly, this whole mess and political hullabaloo
makes a lot more sense.
- [Julia] The one large exception to this is Medicare,
which is a government program that covers medical costs
of those over 65 and some younger folks with disabilities.
This accounts for just under 20%
of the entire US population.
So it shouldn't come as a surprise
that when you have that much medical care to negotiate for,
you can create some serious leverage.
A recent study showed
that the same service at the same facility
would have cost a privately insured person
two and a half times more than one covered by Medicare.
- Now, other than voting and calling our representatives,
which you should do,
we don't have a ton of individual sway
when it comes to changing things at the top.
- But do have more power than we think
when it comes to the bills that show up in our mailboxes.
- This is Kira.
And she's what you might think of as an extreme couponer
when it comes to medical costs.
Let's see what we can learn by following her.
- When she got hired at her new job,
she sat down to compare the cost
of three separate plans available to her.
She was a bit confused as to what each plan actually covers,
so she called her HR department for a little guidance.
This is a critical step.
Though medical benefits are really important to people,
most don't actually understand
what their policy does or doesn't cover.
How can you effectively use something you don't understand?
- [Philip] Now it's time to make a plan
for urgent and emergency care.
Urgent care facilities are for medical needs
that can't wait to see a physician, like a dog bite,
but aren't immediately life-threatening.
The ER should be used for life-threatening needs.
These visits can get expensive in a hurry,
with the average ER visit clocking in around $2,000.
Kira checks out Google maps
and calls two to three places that are closest to her house
to see if they accept her insurance.
Now they're entered into her phone
so she can easily speed dial them if anything should happen.
- [Julia] Third, Kira never accepts a medical bill
at face value.
Every time she goes to the doctor
for anything more than a checkup,
she calls and asks for an itemized bill
just to see if the things
she's being billed for actually occurred.
Billing errors are frighteningly common.
Experts estimate medical billing errors
to be present 75 to 80% of the time.
- Fourth, she actually shops around for her care.
For non-urgent procedures,
she spends some time on websites,
like healthcarebluebook.com or fairhealth.org.
These sites are like the Kelley Blue Book for medical care,
giving her average prices
for things like tests and procedures.
Kira compares the prices
and even calls the hospital ahead of time
to settle on it before she walks in the doors.
That's right.
You can actually negotiate directly with the hospital
ahead of time.
- Sometimes she finds herself looking at a bill
for a procedure she couldn't shop for.
But many larger institutions, like hospitals,
actually have medical billing advocates on staff
to help patients, but you usually have to ask for them.
And if Kira is experiencing a financial hardship
or was without insurance for a season,
simply mentioning this can help knock down the price.
There were even independent third party advocates
that you can hire yourself,
which may well be worth it
if you're facing an especially large bit.
- If navigating all this feels overwhelming and unfair,
you're right, it is.
Our medical system can leave us feeling powerless and lost.
But just because we might feel powerless
doesn't mean it's totally true.
- If the system treats us more like consumers
and not patients, then let's take every opportunity we can
to be the savvy shoppers we know we can be.
- [Both] And that's our two cents.
- Thank you to Ancestry for supporting PBS.
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If you're young and thank you can skip health insurance,
you might want to check out our previous video on the topic.
(bright music)