Negotiate your Healthcare Expenses

Now that you have mastered step three of the Ten Free Tips to Spend Less on Healthcare, asking about cash rates (instead of just assuming your co-pay and share of costs are the only option, you are ready to incorporate another capitalistic step to spend less on healthcare.  Start negotiating!

That’s right, step four is as simple as step three – negotiate your healthcare costs! You negotiate the price of a car when you purchase a car. You negotiate the price of a new home. Why not healthcare? Capitalism is capitalism and its driven by the almighty dollar and competition for each and every healthcare dollar. What are you doing to leverage your buying power? 

As a hospital CEO I was frequently asked by various doctors if I would be willing to discount our cash rate for a procedure for one of their patients. Doctors always presented the option to me as a sort of “take it or leave it,” meaning the patient wanted to go elsewhere or their insurance was directing them to another hospital. Thus, the only way for my hospital to get the business and capture market share was for me to agree to discount the procedure. Doctors often offered the patients a discounted rate on the physician component as well. Most doctors have one hospital they prefer to operate at so you didn’t mind discounting for them once in a while if you were their preferred facility. But other doctors I rarely saw as a CEO and they would often just call around to several different hospitals playing “Let’s make a deal” trying to get the lowest rate they could in town. 

But you do not have to rely on your doctor to request a discount on your behalf. You are free to negotiate for yourself as the patient. In fact, doctors and hospitals are very competitive and when a patient engages in a conversation about competitive pricing, they are often willing to negotiate to keep from losing the business to another provider. You might also learn that the support staff appreciate it when you engage in the pricing conversation as they will explore options with you and share pricing specials, discounts, and opportunities that you may not have otherwise been privy to. 

Whether it’s a hospital procedure, imaging, a lab test, or a physician specialist consult, ask in advance about cash rates, discounts, and options.  While your negotiating power is always stronger in advance of a procedure, you should also consider negotiating healthcare invoices after the fact, but buyer beware that your negotiating power and influence is greatly diminished. Another challenge with negotiating after the fact is that the provider is often limited in their ability to discount as insurance companies require them to collect the full co-payment or share of costs. Sometimes the doctor’s office ‘hands are tied” as the full amount you owe might be an insurance co-payment or part of your annual deductible and the provider is contractually obligated to collect it from you in full and their contract may prohibit them from discounting that amount.

Let me provide you two personal examples. As you are aware, my family has chosen to forgo health insurance and joined a cost sharing community, FitHealth. As a result, we are basically “cash patients” when we go to the doctor.  In 2019 I had bursitis, basically a sack of fluid build-up in my elbow.  So, after the doctor removed the fluid and injected some medication, he told his assistant to send the fluid in the vile off to the lab for testing. I very quickly responded with, “hold on, how much is that going to cost me? And I thought you said you already knew what the issue was so why are we sending it to the lab?” I thought those were both valid questions.

“I just want to be sure about the diagnosis and make sure there isn’t something else going on there, but I do not know how much it will cost,” the doctor said. 

“I would prefer it not be sent to the lab unless we know in advance what it will cost, could you please have your office manager call the lab and ask,” I responded. A few minutes later the doctor came back in the room.

“Its $305 to test the whole sample, but only $85 if we just send one vile,” the doctor said. 

“Is one vile enough to tell if there is anything else going on,” I asked. To which he responded “yes” and we agreed just to send the one vile at a savings of $220, instead of what he was going to order without even asking me. It’s a negotiation.

That’s a story of negotiating in advance with a doctor or provider that ended in a savings for my family of more than $200. I have a second example where the negotiation took place after the service was complete. In this case the situation occurred while my family was still insured with a PPO policy and each of my children had gone in for an annual well visit. 

The doctor ordered a bunch of tests, some covered by the insurance, others were not. My wife and I did not feel like we received ample communication in advance regarding the importance and costs associated with these tests so when we got the combined invoice of more than $1,800, I called with lots of questions. I also expressed my discontentment that the extensive costs of these visits were not communicated more clearly in advance. I also compared their cash rates and bundled pricing to other local doctors and advised them that their process appeared higher than the community standard. Ultimately, they agreed to discount or waive everything that the insurance company did not cover, but were contractually forbidden from discounting co-payments for any of the services the insurance carrier did cover. Ultimately from the consumers end any money you can save or get discounted is a win so we turned this into a positive outcome by negotiating after the service had been provided. 

As a side note, being a former hospital CEO I can tell you that providers such as doctors and hospitals do in fact contract with insurers with the understanding that they can not discount the agreed upon co-pay and they will make a best effort to collect the co-payment in full. With that said, the grey area that often gets exploited there is how each provider defines “best effort to collect,” as many will keep pursuing you and take you to collections, while other providers send you one letter and figure you are not going to pay if you don’t pay right away so they no longer pursue the debt and write it off as bad debt. So, in theory, I could have pushed the office manager in my second example to “forgo pursuing my outstanding co-pays any further and write it off as bad debt” and she may have been willing to consider that option. Many providers do take that approach. 

Well, that’s its folks, tip four is to negotiate your healthcare costs, hopefully in advance as your negotiating power is so much stronger in advance. But don’t give up if you are still able to negotiate after the fact as I just gave you examples of how each can be effective. Negotiate, it’s the American way!  And good luck! Visit Ten Free Tips to Spend Less on Healthcare for an immediate download and start saving today. And don’t forget to take three minutes to complete the Personal Spending Reduction Tool online to see if you qualify for our $5,000 annual savings guarantee.