What would happen if both doctors and patients knew how much healthcare costs?

There has been a movement toward price transparency and consumerism in healthcare over the last decade or so. If people can get an accurate cost prior to receiving healthcare, the assumption is theyll use healthcare more intelligently and cost-effectively. If they only knew that getting their hip replaced at a specialized hip replacement center was $54,000 versus $103,000 at a large academic hospital, they would choose the most bang for their buck.

But lets analyze the actual process of healthcare delivery and see how the knowledge of cost applies to something as common as headaches from sinus pressure thats been plaguing you for the last month.

So now its Monday. Your head hurts and youre afraid theres something really wrong. If youre not that savvy with how to use the healthcare system, you might just make an appointment with your primary care doctor or go to an urgent care center. But those places dont really have the deep expertise nor the time to truly evaluate your sinuses, so youll be referred to a specialist. If youre super savvy, you know that you need an Ear/Nose/Throat doctor. Then, you need one close to your home or work who also takes your insurance. So whats the typical next step?

Great, one of your Facebook friends said she had a sinus problem and recommended this ENT, Dr. Blewitt, who happens to be relatively close to your work. He had an ok personality but really fixed her up about 3 years ago. You google this doctor and see that his Yelp rating is 4 stars with many one star and five star reviews. Seems ok. You give his office a call and ask if they take your insurance. They do! And you try to make an appointment and are told its going to be 3 weeks from now. This guy must be good, so you make the appointment. Hes relatively close. Hes recommended by a friend and the internet doesnt seem to hate him. He takes your insurance. Hes associated with the academic medical center with the best reputation in your area. And, hes busy and in-demand.

But what if you knew that it would cost you a baseline $300 for an office-visit with him but only $260 with a visit from another doctor you found via your insurance companys website who was a few more miles from your home, did not come with a recommendation from a friend, had a Yelp rating of 3.5 peppered with interviews like he was fine, and graduated from residency last year.

This $300 only includes the actual visit fee. It doesnt include any tests Dr. Blewitt may do in the office or orders he might make. Depending on what happens in the office, you could walk away with a simple $300 fee or the opposite could happen. Because of your unique situation and your story, Dr. Blewitt is concerned and wants to throw a full battery of tests at you to take a really good look at your sinuses. He whips out his endoscope and sticks it up your nose to look around (this is a diagnostic procedure and he later bills you $505 for it). He cant get a perfect look, so he says I need to order a CT scan of your sinuses to really understand whats going on up there. In your mind, Dr. Blewitt has a great personality, really seems to know what hes doing, and hes being very complete, covering all bases. Hes truly gained your trust.

He pulls out his pen. He orders you a CT scan of your sinuses. You dont know this, but this is whats happening here: Dr. Blewitt always refers CT scans to the in-house radiology group because thats what hes always done, he trusts their results and their state-of-the-art scanners, he knows he can give the radiologist a call on his mobile to ask any questions about the findings, and he knows they will turn this test around in no time. Plus, the radiologist is his golfing buddy every single summer Saturday morning. He also has the paper requisition forms pre-printed in his office that he fills out and faxes over to his favorite radiology group. He orders radiology tests in the same way, every day, 5 to 10 times a day. Youve already decided to trust Dr. Blewitt, so you assume hes acting in your best interest. The problem here is Dr. Blewitt has no idea how much youll be charged for the CT scan. And, frankly, hes too busy to care. At the point of his decision-making, he has absolutely no idea about how much his orders cost his patients. For him to find out how much youll be charged, hed have to personally call the insurance company for you. The insurance company could tell him how much they typically reimburse for that test. But they couldnt tell Dr. Blewitt how much the radiology group actually bills them because the test hasnt been done. And youre only on the hook for the difference between what the radiology group bills and what your insurance company pays. He doesnt have time to do that for every single one of his patients. And hes simply doing whats medically indicated for you because hes trying to do the best thing for you and hes also trying to cover his butt and do the things that will protect him in court should there be some sort of bad outcome for you. Price is honestly not even on his radar because its not his problem. And he doesnt think it should be his problem. Its too complicated and his job is to do whats medically right for you. Cost be damned. But the radiology group gets you in for the test right away (another reason why Dr. Blewitt loves them!) and bills your insurance company $935. Your insurance company only pays $300 for the test, so it costs you $635.

But, the private radiology group a few blocks away from the hospital offers the same service, the same quality equipment and only bills your insurance company $400 for the CT scan, leaving you to hypothetically pay $100 for the CT scan.

What if you had access to all of this price information? How would this change the process of healthcare delivery and the behaviors of all the players?

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