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Free markets are generally by rules of economics, such as: supply and demand and other principles we’re accustomed to, like paying more for quality service. The health insurance companies however have come between patients and their healthcare for so long that patients generally don’t know what the cost is of most of the care they receive. Doctors, also, don’t generally know when they will be paid for procedures or the amount – payments can take up to three months or longer.
There has been a trend recently in the media and from our politicians to push for cash-based payment for medical services – bypassing insurance for all but catastrophic incidents like major surgery.
The idea is gaining momentum and for good reason. An article from the Wall Street Journal details how a colonoscopy in San Francisco varies between $600 and $5,500 meaning if the prices were known and you could shop them, you could save 89% on this single procedure. A woman who starts getting colonoscopies at age 40 and continues receiving them every three years until age 80 – the typical female lifespan in the U.S. could save more than $63,000 on colonoscopies alone.
Of course it isn’t that simple to make such calculations as a person could have multiple types of insurance in their lifetimes – private, Medicaid and Medicare to name a few. So how do we compare the potential savings?
In the same article, an example is given where a patient with insurance receives an MRI which costs $5,400 has to pay $2,500 for the procedure. What the patient didn’t know was if they had chosen to forego their insurance and pay cash instead, they could have paid just $725. In this case, they would have saved 71%. This of course doesn’t factor in the cost of insurance premiums.
A family of four saves $14,000 or $3,500 per person by paying cash and using a high deductible plan.
The average person with a low deductible plan in 2016 overpaid insurance by $3,500 meaning if they switched to a high-deductible plan and saw a doctor four times per year at $125 per visit, they would have saved almost $200/month. The savings in 2017 is even greater.
But let’s use the 2016 numbers and say the patient switched to a high deductible plan. If we assume three months of savings and round down, that’s another $500 they didn’t need to shell out. So the $2,500 procedure actually used to cost them $3,000. In other words, the patient paid insurance for the privilege of paying more. The final comparison now becomes paying $725 instead of $3,000 or a 76% savings for an insured person.
It doesn’t have to be this way and it won’t be. It’s why we invented UMA Health, the free market for healthcare. Our platform connects patients with doctors but bypasses insurance. It allows patients to find doctors based on cost, distance, ratings and availability.
UMA stands ready to connect you with the doctor you need – we are available in the New York Area and initially targeting podiatrists and dentists. We are open to all doctors and we welcome new patients. Use our platform, save money and get 5% back to spend on future visits. Try us now.