Here’s a hard truth that many physicians would rather not admit: all too often they don’t know what they’re charging you. They don’t know how much you pay, they don’t know how much your insurance pays, and they don’t know how billing is handled. When your doctor doesn’t know what you’re being charged, there’s something wrong with the system!
Unfortunately, many doctors outsource their business functions. Doctors do not want to code or negotiate prices with each network, so they hand it over to someone else—and that means that you’re losing out.
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Healthcare Pricing By Law
By law, doctors must offer the same list price to all of their patients. Unfortunately, the creation of PPOs, or discount programs, began as managed care networks. This means that they had a select list of providers for you to see that you controlled. Pricing is different for each PPO. This means that some patients are able to receive much lower costs than others.
Most managed care network agreements (PPOs) are based on a discount off a billed charge. Billed charges bear little relationship to actual costs.
Why Do Practices Negotiate Healthcare Costs?
It all comes down to supply and demand. Doctors negotiate with insurance companies because insurance companies control access to patients.
Like any other business, doctors need customers; thus, the phrase “being in-network” with an insurance company was born.
Are In-Network providers actually more expensive?
In-network healthcare providers are the cause of the problem; insurance companies own the largest networks of providers. It’s assumed that they will give them the best discounts.
The problem is this: you might have a variety of networks, but only one or two hospital systems to serve the area.
Limited supply makes prices go up, and as a result, both insurance companies and healthcare providers make more.
How Do We Fight Rising Prices and the Lack of Transparency?
At the end of the day, people are the ones who make a difference. If people are able to negotiate their own pricing relationships with providers, insurance companies no longer hold them in their power. Instead, millions of purchasers shift the tide creating a direct relationship with providers.
Middlemen—in this case, the insurance companies—create more cost. End the need for the insurance company and you create benefits for your employees and your business.
FairPrice removes the middleman. FairPrice is the new, patient-first way forward. It’s an online insurance community that’s built to provide coverage and transparent pricing. We give patients direct access to the doctors and hospitals that are known for quality care. Patients choose their provider based on what they’re willing to pay—full transparency. No hidden markups—just true prices.
