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Insisting on Transparency in Pricing Can Make an Immediate Impact

Money
Advisors

Insisting on Transparency in Pricing Can Make an Immediate Impact

There is no headache in insurance like the “dealing with price” headache.

For example, the same procedure can cost you $10,000’s more depending on where it’s performed. That makes a certain kind of sense. After all, different locations have different costs of living and while one hospital may do X procedure ten times a day and have the staff and the resources to perform it very inexpensively, another hospital may only do X procedure a few times a year, necessitating bringing in experts and specific equipment that can increase your bill.

However, depending on your insurance and financial situation — the same procedure can vary by tens of thousands of dollars in the same hospital.

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Generally, the only way to find out how much your care costs is to wait until you receive your bill, and by then, it’s too late.

Fortunately, there are a growing number of alternative payment methods that avoid this insurance headache. Two that are gaining in popularity are Cash Advantage and Reference Based Pricing. Both of these not only grant you transparency into the cost of care beforehand, but they can also save you thousands in the process.

Cash Advantage is just what it sounds like — the advantage of paying cash. As premiums and out-of-pocket expenses increase, more people are getting unexpected bills they can’t cover. In fact, 67% of out-of-pocket insurance expenses to providers go unpaid. Healthcare providers know this, so if you tell them you’re willing to pay up front, not only will you receive a transparent price for the service, you’ll get a discount. How much of a discount? Larger than they give to insurance companies.

Reference Based Pricing (RBP) works like traditional insurance in that there is a network of providers you can access and a list of services covered, however, the major difference is that the cost of services has been agreed to beforehand, so surprise billing is eliminated.

The “reference” in RBP refers to Medicare, as costs of service are calculated as a percentage above the Medicare cost. As Medicare is essentially the “group rate” the government has negotiated, by building off the low prices they’ve already established, you can save thousands over traditional insurance.

Through both Cash Advantage and Reference Based Pricing, you eliminate one of the biggest headaches in traditional insurance — uncertain costs. With complete price transparency and the power to save thousands, it’s easy to see why these alternative payment methods are gaining popularity.