No matter if you pay through insurance or out-of-pocket for services, cost is always a major factor when considering medical care options. How much you spend each time you visit a physician or purchase prescription drugs will depend on a few key elements:
One of the key components of your health plan’s deductible is payment upfront before it begins covering its portion.
Costs of Care
Health care costs can be complex and multilayered, leaving both patients and doctors uncertain as to exactly how much is owed them. Healthcare is an intricate industry with numerous participants at different levels interacting.
As an example, a patient might pay part of their care by way of copayments and deductibles; an insurance company might sell and collect premiums in order to cover these costs on behalf of its members.
No matter who pays, health care providers are under constant pressure to reduce costs and the new risk-based payment models are only magnifying this pressure.
Hospitals and health systems face a challenge in managing total costs of care as they try to manage budgets within premium dollar budgets and assess whether their services provide value to an enrolled population. With this framework in mind, these organizations can develop cost-effective strategies and optimize financial health so they can flourish under value-based care models.
Costs of Health Insurance
Health care is a multibillion-dollar industry with many factors impacting its costs, with primary drivers being medical practitioners (doctors, nurses, dentists, therapists and hospital systems), their fees for their services and hospital systems’ fees for providing care.
As long as you have health care insurance, your coverage limits how much of the expenses associated with healthcare can be covered – this includes deductibles, copays and coinsurance payments.
A deductible is an amount you pay each year before your health insurance plan will start covering its covered services. Once this deductible has been met, insurance may cover some or all of your medical expenses.
Deductibles are an effective way to save money. They allow you to determine your out-of-pocket maximum, at which point your health insurance company pays 100% of all health care and prescription drug expenses.
Costs of Prescription Drugs
Prescription drug costs are an integral component of overall healthcare costs. Accordingly, any changes in their prices or usage could significantly impact employer plans, employee premiums and patients.
As drug prices escalate, consumers may feel pressured to opt for less costly treatments or opt not to take any. This could reduce effectiveness and result in adverse consequences for patients.
Drug spending growth has been propelled primarily by newer and higher-priced products, while existing, higher-priced ones have also seen usage increase. A drug’s “net price” takes into account discounts or rebates offered to insurers or federal programs such as Medicare Part D or Medicaid from its manufacturer.
Over the past decade, net prices for brand-name drugs have significantly increased under both Medicare Part D and Medicaid; while generics’ net prices have fallen dramatically due to increasing availability at lower costs than brand-name alternatives.
Costs of Surgery
Surgery costs can vary significantly, depending on what procedure is performed and the level of care provided before and after it. Total expenses could include surgeon fees, anesthesiologist fees and hospital services.
Depending on your insurance plan, some costs for procedures will likely be covered; however, you may still be required to pay coinsurance or copayment costs.
There are a number of strategies you can employ to lower your overall healthcare costs, including forgoing emergency surgery or shortening testing and recovery time, or asking your physician to prescribe generic medicines – among many others.