Tips for Consumers to Shop Around Amid Wildly Differing Hospital Costs

By FOXBusiness

Consumers headed to the emergency room don’t usually have time to compare prices to find the best deal for their medical care, but for those in non-emergency situations, it might be in their interest to shop around.

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A study recently released by researchers at the University of California San Francisco finds surgery costs can vary widely at different hospitals, even if they are just down the street or right around the corner from each other.

The researchers found that among 20,000 cases of routine appendicitis, at 289 hospitals and medical centers across the state of California, the price range was as low as $1,529 and as high as $183,000. The median hospital bill came in at $33,611. The patients were all adults, and were admitted for three days or less.

National Center for Policy Analysis senior fellow Devon Herrick says hospitals simply aren’t competing based on price anymore, which is why the prices fluctuate so much.

“Eighty-eight percent of doctor and hospital bills are paid for today by third parties,” Herrick says. “And even when a hospital tells you a price, it’s not a real price. This is a negotiation point, or starting point for these plans.”

He adds that no matter if it’s the government or an insurance company picking up the tab, it’s all about negotiation power when it comes to determining the price of a surgery.

“They are never paying list price,” he says.  “And if consumers offer cash, especially cash up front, they will be given a better price. So these prices are fictitious.” What’s more, he says health-care prices will increase across the board as premiums rise next year under the Affordable Care Act. “It’s all of our problems.”

If you are going into the hospital for a pre-planned procedure, here are some tips from Herrick to attempt to lower your costs.

No. 1: Find out if a visit to the hospital is actually necessary. If you can visit an outpatient center or ambulatory medical center instead, the price tag will significantly drop, according to Herrick.

“Hospitals are the worst places for these costs.”

No. 2: Get the billing code ahead of time. This code will allow you to call other hospitals and doctors’ offices to price the procedures.

“The Healthcare Blue Book is a good resource for this.” Herrick says. “This can give you a good indication of what something will cost, but it’s just a ballpark of the cost to come.”

Also call before showing up, and offer to pay cash up front if you can—hospitals are more likely to offer a discount to all-cash payments.

No. 3: Talk to your doctor. Be honest with your doctor about your financial situation, he or she might be able to find a lower-cost alternative or make suggestions to reduce costs.

“If you can shave off a few thousand dollars but going to a hospital across town, or to a major city one state away, it’s worth traveling for,” Herrick says.

No. 4: Bid online. Herrick suggests tools like, which allow patients to enter their procedures online and have a network of doctors and hospitals put out potential bids on a request.

“More and more people, especially in employer plans have high deductibles,” he says. “You can get bids for these potential procedures, and choose between doctors and hospitals.”

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