AMISH DRIVE DOWN MEDICAL COSTS
February 23, 2006
When the Heart of Lancaster Regional Medical Center opened in Pennsylvania Dutch Country in 2004, the Amish and Mennonites (or Anabaptists) were able to organize and successfully negotiate lower rates for medical care, says the Wall Street Journal.
Anabaptists choose to go without insurance or Medicare as part of their rejection of the secular world. Like uninsured patients everywhere, they are often billed a hospital's full retail price. But unlike many of the uninsured, they negotiated discounts:
- Collectively, the Anabaptists spend about $5 million a year in Lancaster County for health services, all of it in cash; to qualify for discounts, they agreed to pay 50 percent of the fees upon hospital admission.
- The hospital agreed to discounts of up to 40 percent off its top rates, resulting in prices still slightly higher than Medicare reimbursements; the hospital would not drop the prices any lower for fear it could be charged for fraud for charging Medicare patients more.
- The Anabaptists pay flat rates such as $16,577 for a hip replacement -- which is about half of the national average cost in 2004; the rates include the hospital stay and fees for surgery, anesthesia, medication, testing and occasionally outside specialists.
Anabaptists often go to Mexico for cut-rate treatment and were able to use prices south of the border -- along with their willingness to pay upfront in cash -- as leverage to bargain for lower prices at home. (Also, the Anabaptists pledged they would never sue for malpractice.)
Source: Joel Milliman, "How the Amish Drive Down Medical Costs," Wall Street Journal, February 21, 2006.
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