Gerard Anderson, Johns Hopkins Bloomberg School of Health, and Ge Bai, Johns Hopkins Carey Business School, conducted a national study to determine the extent to which doctors charge patients in excess of Medicare’s approved rates. They found a very wide charge variation among doctors, with doctors charging on average two and a half times the rate they accept from Medicare. If you have commercial insurance–including a private Medicare Advantage plan–and get out-of-network care, beware of high doctor charges.
Specialties in which patients have little or no choice of physician had some of the highest excess charges. Anderson and Bai found that the median charge to uninsured and out-of-network patients for anesthesiologists was 5.8 times Medicare’s approved charge. Emergency doctors, radiologists and pathologists on average charged four or more times Medicare’s approved rates to these patients.
These findings underscore the plight of some patients in the health care marketplace, particularly the uninsured and people hospitalized, receiving out-of-network care unexpectedly. Many of these people lack choice of physicians or lack knowledge that their physician is out of network. And, they generally have no recourse. Just like drug companies with patented drugs, physicians treating the uninsured and out-of-network patients can charge whatever they please.
To be clear, because the physician marketplace, for the most part, is not competitive, physicians generally command rates well in excess of Medicare’s rates from insurers. Insurers are largely unable to drive down provider charges to Medicare levels, which drives up premiums and deductibles for the insured patients. To rein in health care spending, we need to address this issue as well.
Medicare Advantage plans come closest to negotiating rates akin to Medicare’s because of the competitive pressure the traditional Medicare program exerts on the market.
Without a national database reflecting the amount physicians actually charge patients and how much patients pay, it’s impossible to know exactly what patients receiving out-of-network care and uninsured patients are paying for their care. But, the bigger issue is that even if we knew, it would not keep doctors from charging high rates whenever they can. The simplest way to drive these rates down is to expand Medicare, making it available to everyone without employer coverage and creating some competitive pressure in the marketplace.
Here’s more from Just Care:
- Public option key to reining in health care costs
- Competition can’t rein in health care costs
- Medicare is the solution to out of control health care costs; everyone should be able to buy into it