NCPA - National Center for Policy Analysis

Many Hospitals, Doctors Offer Cash Discount for Medical Bills

May 30, 2012

Unknown to most consumers, many hospitals and physicians offer steep discounts for cash-paying patients regardless of income.  But there's a catch: Typically you can get the lowest price only if you don't use your health insurance, says the Los Angeles Times.

That disparity in pricing is coming under fire from people like Jo Ann Snyder, whose share of a $6,707 CT scan amounted to $2,336 after her Blue Shield of California negotiated price.  The cash price?  $1,054. 

Indeed, the difference in price can be stunning.

  • Los Alamitos Medical Center in California, for instance, lists a CT scan of the abdomen on a state website for $4,423.
  • Blue Shield says its negotiated rate at the hospital is about $2,400.
  • When the Los Angeles Times called for a cash price, the hospital said it was $250.
  • The newspaper contacted seven other hospitals across Southern California, and nearly all had similar disparities between what a patient would pay through an insurer and the cash price offered for a common CT scan, which provides a more detailed image than an X-ray.

Cash prices -- typically available for hundreds of common outpatient services and tests -- have a real appeal to millions of consumers who are on the hook for a growing share of their medical costs as employers and insurers cut back on coverage and push more high-deductible plans.

Robert Berenson, a senior fellow at the Urban Institute and vice chairman of the Medicare Payment Advisory Commission, says big hospitals are exerting their market power to charge ever-increasing rates and major insurers go along with it because they can pass along the costs to employers and consumers.  Insurance industry officials say that health plans negotiate the lowest prices they can, but that they also need to include prominent hospitals favored by customers in the network, and those institutions can command higher prices.

Health policy experts say the growing awareness of cash prices should accelerate the trend toward increased disclosure of all types of medical costs.  But entrenched interests are likely to resist.

Source: Chad Terhune, "Many Hospitals, Doctors Offer Cash Discount for Medical Bills," Los Angeles Times, May 27, 2012.

For text:,0,4627745.story


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