Why does Healthcare Cost So Much? One Reason- Facility Charges

by | Oct 7, 2019 | Direct Primary Care, Ridiculous Healthcare Costs | 0 comments

Why does health care cost so much?
Unnecessary Facility Charges Drive Up Healthcare Costs

In this regular blog series, Dr. John Hallgren will reflect on one of the many news stories that focus on the ridiculous cost of healthcare and share tips on how to be a better healthcare consumer.

On September 30, I heard an interesting and very common story on NPR’s radio show All Things Considered. So, I hate to see people get gouged, but I love the teaching element of these stories as it can really shed some light on why people pay unnecessarily high healthcare cost, and the opportunity to show how to avoid doing that.

The young woman featured in the story had recently started seeing a primary care physician, presumably through her new insurance plan, and they were working on a game plan for her health. This small skin bump was to be evaluated and removed and she was referred to a hospital for a minor procedure that she didn’t have to change clothes for. What should have been inexpensive ended up costing her $3400 despite her having insurance coverage.  

Much of that charge – $2,200 — was a facility fee. This is a new-ish additional charge many hospital systems, surgery centers, and even some doctors’ offices add to ostensibly cover overhead. It would be like your car mechanic charging you over-and-above parts and labor just for the privilege of having your car worked on at his or her shop. You can avoid this charge by asking beforehand if there is a facility fee and if so, where you can be sent that doesn’t have one. Often ambulatory surgery centers and doctors’ offices don’t have them.  

While I don’t like to second-guess clinical decisions, I’m curious that this was sent to another doctor at all. Most primary care physicians can do minor procedures like this in the office. A referral inherently increases cost, so try to avoid this by asking whether the doctor who identified it could do the procedure. In a lot of systems, it’s not that the doctor isn’t capable of doing a minor procedure, but the scheduling is such a hassle that it’s easier to refer out. So try to get them to make their schedule work for you instead of you working for their schedule. 

Three tips to save money on minor medical procedures:

  • Ask if the referral is clinically necessary or if you can wait for an available appointment with your primary care provider to complete the evaluation.
  • Ask if the procedure can be done in the clinic or at an ambulatory surgical center.
  • Inquire about facility fees prior to the procedure.

How would this healthcare cost be different with a Mission Direct Primary Care membership? 

Removing lumps, bumps, and moles on the skin is one of many in-office procedures that are included in a Mission Direct Primary Care membership. For a small skin lump, I most likely would have removed it in the office at no additional charge. Once I looked at it after removal, I may have decided to send it out to have a pathologist examine it and confirm it was not cancerous — $70. I’ll do the math on the savings: $3400 minus $70 equals $3330 or almost the same amount as entire year’s membership for a family of 5! That’s the savings from one visit in the traditional healthcare system paid for with insurance.  A direct primary care membership takes care of these routine things in a cost-effective and predictable manner.

If you are ready to take control of your healthcare costs sign-up for our email list to learn more about how a Mission Direct Primary Care membership can save you money and provide a personal relationship between you and your doctor. Follow us on Facebook for information about upcoming events.

John Hallgren, M.D.

John Hallgren, M.D. is the co-founder of Mission Direct Primary Care in Omaha, Nebraska. He graduated from the Uniformed Services University of the Health Sciences medical school in 1995 and has been a board-certified family physician since completing residency in 1998. He is a 26-year veteran of the U.S. Air Force and has been an assistant professor of family medicine for the University of Nebraska Medical Center and Uniformed Services University. He has several publications in such journals as American Family Physician and The Journal of Family Practice.

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