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Are you scheduled for an endoscopy after months of stomach pain and bottles of ulcer medicine? A gastroenterologist will use a camera to investigate the cause of your symptoms by examining your esophagus, stomach, and possibly the beginning of your small intestine. But how much will this procedure cost?
The cost could range from $1200 to as high as $5000, depending on various factors. This is particularly important if you are in a high-deductible plan with significant out-of-pocket costs.
The final price you pay for the endoscopy will be influenced by the negotiation between your insurance company and the healthcare providers in your area. If you are facing high prices, you may point the blame at your insurance company.
However, if you work for a self-insured company, the responsibility for high prices falls on your employer.
Let’s delve into the dynamics at play here.
It’s a simple truth: healthcare prices are often the result of negotiations between provider organizations and insurance companies. Providers naturally want higher reimbursement rates, while insurers aim to keep costs down. This tug-of-war shapes the prices we see.
Here’s another key point: larger insurance companies typically negotiate lower prices from healthcare providers. Conversely, provider organizations with significant market power can demand higher prices from insurers, making it harder for insurers to walk away from negotiations.
Now, let’s talk about self-insured companies. When these companies negotiate healthcare prices, they tend to end up paying higher rates. A study from the Health Care Cost Institute revealed that healthcare prices are typically higher for self-insured patients compared to traditionally insured individuals. This disparity is evident in the data, with self-insured companies paying about 8% more on average for procedures like endoscopies:
Higher prices for self-insured plans
But why do self-insured companies end up paying more?
Firstly, most companies lack the leverage to negotiate lower prices effectively with healthcare providers.
Secondly, many of these companies may not have the expertise in negotiating healthcare prices, even if they have considerable market influence.
In the absence of government regulations on healthcare prices, the burden of negotiating fair rates often falls on the employer. Unfortunately, some employers may opt for high-deductible plans, shifting the financial burden onto employees.
