I Almost Paid 76% More for the Same Healthcare Visit – Why It’s Important to Shop Around for Healthcare

Want to pay 50-100% or more for the same medical procedure? 

I don’t, and I almost did recently. 

I’ve previously written about tips to navigate the healthcare system. I’m back again because it feels like the healthcare system has too many traps to get consumers to pay more for healthcare than they need. 

When I previously wrote about shopping around for healthcare, I did it based on my experience with dermatologists. Once again, I’m writing about my experience with trying to see a new dermatologist. 

After moving across the country, I had the pleasure ? of finding new doctors. Since my annual check-up with a primary care physician is covered under insurance, I worry less about where I go. With dermatology, I am usually paying out of pocket because insurance does not cover regular skin checks even if skin cancer runs in your family as it does in mine.

Let’s talk about what happened where I almost paid 50% more for my annual skin check, what tipped me off to do more exploring, and how I shopped around. 

The Backstory

I moved across the country and since skin cancer runs in my family, I’ve been advised by doctors to see a dermatologist annually. This meant going on the hunt for a new dermatologist, which is not easy. 

It’s not easy because there are fewer dermatologists than primary care physicians. In 2020, the estimated number of dermatologists in the U.S. was about 18,898. For primary care physicians, the estimate was about 347,040 between internal medicine and family medicine.  

Also, if you find a dermatologist, it’s challenging to actually get an appointment that isn’t at least several months in the future.

I decided to have my primary care physician be at UW Health, which is a major healthcare provider in Madison, WI. Since I had my physician there, I decided to call their general line to request a dermatologist. 

After I received what felt like a warning/lecture of how people often see a dermatologist for unwarranted things, I could schedule an appointment. But, because they don’t require a referral and people do schedule for unwarranted things, the wait is often months out. 

There was one dermatologist who had an appointment available in about a month. I took the slot. It was part of UW Health, and they had an opening. I thought, “A month isn’t too bad because it’s a regular skin check.” 

Where I Became Concerned

A few days before my primary care appointment, which is at a different clinic than my dermatology appointment, I receive an email message to complete the questionnaire prior to arriving and sign the disclosures. 

I skim through them. Everything looks okay. 

Another day passes, and I receive my dermatology questionnaire and disclosures. 

I open the billing notice and see “hospital facility charges” on it. The hairs on my neck immediately stand up. I’ve read enough of Sarah Kliff’s work to know that hospital facility charges are a red flag. 

I recall that these facility charges are a fee on top of what the provider charges because the clinic is associated with or run by a hospital. I’m not sure of the exact definition or why they exist. I only know they exist, and the care is usually more expensive. 

It’s time to explore further. 

Deciding What to Do Next

Part of me really wanted to accept the appointment. I thought, “It can’t be that much more. Rescheduling and figuring out how to pay less is not easy. I don’t want to spend the time doing it.” 

However, I decided against the easy way out. Since I’m self-employed and money is not coming in regularly now as I build a business, I’m more cautious of my spending. I imagine if I was still employed full-time, I would have accepted the appointment and been done with it. 

Since I have more flexibility with my time, I was more curious. 

I read their web page on hospital facility charges. I’d encourage you to read it because I learned something new. You can read it here

The key sections are here:

  • Clinics that are owned and operated by UW Hospitals and Clinics are considered outpatient departments of the hospital, sometimes referred to as “provider-based” clinics.
  • They are considered part of the hospital, even though they are separate from the main hospital and you are not actually hospitalized.
  • When services are provided by a provider-based clinic, a portion of the billed service is charged as a hospital charge with a facility fee or a telehealth site fee.
  • Clinics that are owned and operated by UW Medical Foundation can include all costs on one bill so there is no facility fee.

And then in the FAQ, “What is the difference between a UW Medical Foundation Clinic and a UW Hospital Clinic?”

  • UW Medical Foundation Clinics and UW Department of Family Medicine and Community Health Clinics are owned and operated by UW Health physician groups. They are able to charge patients a single fee that includes all the costs associated with running their practice.
  • Clinics that are hospital-owned, meaning they are owned by UW Hospitals and Clinics, must provide patients with two separate bills. One bill is from the medical group for the doctor’s professional fees. The other bill is from the hospital for all other costs. This second bill is referred to as the “facility fee” or the “telehealth site fee.”

What I gathered from this is UW Health has two different ways to receive care. You can receive care in a UW Medical Foundation clinic or a UW Hospital Clinic. 

When I scheduled my dermatology appointment, they made no distinction on the phone. I went with the provider who had the soonest appointment. How many of us have done the same? 

I thought UW Health is UW Health regardless of where I receive care. I was very wrong. 

Since the dermatologist I had scheduled with was part of a UW Hospital Clinic, I was curious how much it would cost. 

Comparing Costs Between Facilities

I call to receive a cost estimate of a skin check-up with a dermatologist at the clinic I had scheduled the appointment for.

I’ve canceled by this point because the facility fee scared me off, but I wanted to know the cost in case I want to reschedule. 

I call, and of course, I can’t talk to anyone. It says I have to leave a message and someone will call back within 5 days. Awesome. 

I leave a voicemail and wait. Within about 30 minutes, I get an email back that I have a new message in MyChart. 

Below is the estimate. 

Estimate of healthcare at provider-based clinic

WHOA! That’s not happening. 

The total fee is $508, which is comprised of a $200 hospital fee and $308 physician fees. My insurance will cover $161. I’ll be out of pocket $347. 

Keep in mind this is at one of the “provider-based clinics.” 

Now, I’m really curious. How much is it at one of the UW Medical Foundation Clinics? 

I called back the cost estimate hotline. I leave another message and within 15 minutes, I have an estimate. Side note: Why require people to leave a message if you can respond that quickly? Talking to someone would be helpful in these circumstances to understand the billing better. 

Below is the new estimate. 

Estimate of healthcare at UW Medical Foundation

Notice any differences? 

I sure did! 

The total estimated fees are 117% more. My out-of-pocket estimated costs are 76% more. 

This is for the same service by the same healthcare organization. Keep in mind that as a patient, I see these clinics as UW Health. I see no distinction. 

It would be like walking into a fast-food restaurant down the street, ordering without seeing prices (because that’s how healthcare works), and then finding out that your chicken fingers are going to cost you 76% more than the same fast-food company down the road. 

Imagine if that’s the world we lived in with everything else we buy. It’s a shame that’s how it works in healthcare. 

One other thing that caught me by surprise was how it was coded in the estimate. The more expensive estimate at the provider-based clinic was coded as a new patient, level 3 while the less expensive estimate at the UW Medical Foundation Clinic was coded as a new patient, level 2. 

I’m still not sure why, but I had already spent enough time on it that I didn’t bother calling back to ask why. If anybody knows, I’d love for you to tell me.

What You Can Do to Try to Avoid More Costly Healthcare

Obviously, healthcare costs vary widely. Even within the same healthcare organization, I was potentially going to pay 76% more for the same service. Imagine the price difference between different healthcare organizations! 

A few lessons stand out to me:

  1. Ask for a cost estimate
  2. Shop around between healthcare organizations 
  3. Scrutinize every bill you receive

I know shopping around for healthcare is not feasible for everybody. It takes time, and the system is set up to make it challenging and wear you down. I also know emergencies happen and you simply need to get the care you need as fast as possible. 

However, there are situations where you can shop around. If that’s the case, ask for a cost estimate. 

If you are having any sort of procedure where you don’t need it immediately, it might be worthwhile to ask for a cost estimate from multiple healthcare organizations. At the very least, ask for a cost estimate of where you plan to do it. 

You can use that cost estimate to compare it to other providers in your area using a tool like Medicare Procedure Price Lookup, FAIR Health, or Healthcare Bluebook

Is the procedure more than the average? 

Is there somewhere else nearby where it is cheaper? 

Is the care you will receive similar or better?

Although cost estimates are only estimates and surprises can still happen, it’s better than doing nothing and waiting for the bill. 

The other thing I would recommend is to shop around to see which healthcare organizations in your area routinely offer lower-priced services. If you are fortunate enough to have multiple healthcare organizations, you may be surprised that one routinely has cheaper services. 

Unfortunately, that’s not possible for everybody, and there are areas with a lack of access to healthcare, but for those with options, it can pay off to shop around. 

I experienced this in Seattle. There are many hospital and clinic systems. When my doctor left the practice I had been going to, it was a good reason to shop around.

I discovered Virginia Mason had lower prices than many other healthcare providers in the area. I moved my care to them, and I was very happy with the care I received. 

Ask around. Maybe a certain healthcare system in your area is known for being cheaper while still providing quality care. If so, that might be a reason to check them out. 

Although procedure costs can still vary, it might require less shopping around if you ever need a procedure. 

Lastly, scrutinize every medical bill you receive. We still have a long way to go to make the prices of medical procedures easily available, but there continues to be progress in making medical prices more transparent. 

I’ve heard of people calling a hospital after receiving a bill to ask for an itemized bill and simply by asking, they reduced the bill. 

Medical billing errors are hard to estimate. There are estimates of around 7% to 80% of all medical bills have some sort of error. Even if it is on the low end, it’s worthwhile to review your medical bills to check for errors. At the very least, ask questions to understand it better. 

It may help you avoid an expensive bill in the future.

Summary – Final Thoughts

Healthcare pricing transparency is an issue in the United States. As I discovered recently, care from the same healthcare organization can vary dramatically. 

I almost paid 76% more for the same procedure because I was tempted to not investigate the billing notice I received in advance.

As you sign medical paperwork, review it carefully. Look for “hospital facility fees” or other phrases that might imply expensive care. 

If you have the time and are not putting your healthcare at risk, consider shopping around. Some healthcare organizations are known for having lower costs across the board. 

Although that can help, don’t forget to ask for cost estimates before having procedures done when you are able. Use that estimate to shop around if it seems expensive. 

Until our healthcare system is more transparent and fair, you’ll need to be diligent in how you receive care if you want to save money. 

Disclaimer: This article is for general information and educational purposes only and should not be considered investment, financial, legal, or tax advice. It is not a recommendation for purchase or sale of any security or investment advisory services. Please consult your own legal, financial, and other professionals to determine what may be appropriate for you. Opinions expressed are as of the date of publication, and such opinions are subject to change. Click for Full Disclaimer