The Clinton Herald, Clinton, Iowa

AP story section

October 26, 2013

Businesses, patients shop for better deals

Paul Freeman drove 600 miles last year to save himself — and his employer — thousands of dollars on his surgery.

Freeman’s insurer covered his travel costs and the entire bill because a medical center in Oklahoma City could remove the loose cartilage in his knee for about 70 percent less than a hospital closer to Freeman’s Texhoma, Okla., home.

At first, the community bank CEO hesitated because he thought the lower price would mean lower quality. But he knew if he didn’t make the roughly 10-hour roundtrip trek, he’d pay about $5,000 out-of-pocket.

“You immediately think, ‘Oh they’re going to take me into a butcher shop and it’s going to be real scary,’” Freeman, 53, says, noting that instead he had “a wonderful experience.”

People shop for deals on everything from cars to clothes to computers. Why not for health care too?

Insurers, employers and individuals are shopping around for health care as they try to tame rising health care costs. Companies are doing things like paying for workers to travel if they agree to have a surgery performed in another city where the cost is cheaper. They’re also providing online tools to help people search for better deals in their home market.

And some patients are bargain hunting on their own. Through a website called MediBid, people who pay out of pocket are soliciting doctors, hospitals and medical centers to bid to perform knee surgeries and other non-emergency procedures.

Patients who shop for care represent a tiny slice of the roughly $2.7 trillion spent annually on health care in the U.S., said Devon Herrick, an economist who studies health care for the National Center for Policy Analysis. But he and other experts expect this trend to grow, especially as more companies offer insurance plans that require employees to pay thousands of dollars before most coverage starts. These so-called high-deductible plans also will be among the cheapest options available on the public exchanges set up as part of the health care overhaul to enable millions of uninsured people to shop for coverage.

Advocates say all the shopping will help control medical spending.

“We waste an enormous amount of money in this country by overpaying for health care,” says John Goodman, an economist and CEO of the National Center for Policy Analysis. “The only way to get rid of waste is to have people compete in a real marketplace.”

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