Health care haggling
When Sandra Hughes' insurer wouldn't cover her pregnancy, she started negotiating. Bargains are possible, but not easy.
By KRIS HUNDLEY
Published March 13, 2005
TAMPA - Sandra Hughes is on the cutting edge as a health care consumer.
Unable to get maternity coverage for her third child's birth because of prior caesarean sections, Hughes called local doctors, hospitals and specialists well ahead of her February due date and negotiated for lower charges by offering cash upfront.
Whether she realized it or not, her frustrating journey through the business end of medical care could be the wave of the future as insurers try pushing responsibility onto individuals to spend health dollars wisely. Consumer-directed health plans, which put the patient in charge of finding the best care at the best price, are the rage among insurers and employers as they seek ways to control rising costs.
Gary Claxton, vice president of the Kaiser Family Foundation, said although these plans are being aggressively promoted by insurers, no one knows how successful an individual will be in negotiating lower prices for medical services.
"There's a group who think individuals will get the pricing an insurer normally gets," he said. "A smaller camp thinks it may mean an opportunity to be stuck with higher rates. Then there are all the jokes about how good a negotiator you can possibly be when you're not wearing your pants."
Hughes got herself a deal, but it wasn't easy. Hers is a cautionary tale from the future.
Hughes and her husband, Brian, a self-employed financial planner, had little choice. Though they have a policy that covers medical emergencies for their growing family, the insurer refused to cover additional pregnancies. So when Hughes, 31, of Odessa found herself expecting again last summer, she immediately set out to get the best deal.
Hughes, a former teacher in Pinellas County, is not alone in wheeling and dealing for maternity care. Crista Far, whose husband, Mohammad, is a self-employed land surveyor, said their insurer wanted to tack on a $600-per-month rider for maternity coverage, even though the couple's first birth had been problem-free.
Instead, the Fars, who live in Trinity in Pasco County, opted to pay themselves for their second child's birth in November 2003. Far is still angry that when her hospital stay was unexpectedly extended, the hospital demanded $572 more before she could take her baby home.
"The theory of negotiating for health care is beautiful," Far said. "But to be honest, I don't think it will be very effective. And the time it took to do the legwork to prepay for a baby was just silly."
Hughes, who is in a mothers' group with Far, thought she had a couple of major advantages as she set about bargaining. Since she'd had two daughters, the first in October 2001 and the second in January 2003, it was easier for her to be businesslike about birthing.
"You're used to warm, fuzzy feelings about having a baby," said Hughes, who kept meticulous records of her negotiations. "I told my obstetrician I felt like I was buying a car."
Hughes also had the advantage of knowing what her former group policy, through Cigna, had paid for the earlier caesarean sections. She used that as a benchmark when calling each provider.
Her strategy worked with the obstetrician, anesthesiologist and a surgical assistant. All agreed to accept the Cigna reimbursement rate even though it was lower than their usual rates for self-pay patients.
Hughes ran into a brick wall, however, when she tried to negotiate a discount with her hospital, Mease Dunedin, which is the same hospital Far used. The hospital's billing office quoted her a caesarean section rate of $5,000 for self-pay patients, despite the fact that it had accepted $3,200 for the same procedure from Cigna. When Hughes pursued the matter with a supervisor, she said she was told the hospital did not negotiate with individuals.
"The attitude was so belittling and so condescending," Hughes said. "It was "Take it or leave it."'
In January, Hughes wrote to Mease Dunedin's president and chief executive, Jim Pfeiffer, asking why a self-pay patient should have to pay $1,800 more than an insured one. She got no response. Angry but inclined to stick with the hospital where she had delivered her other two daughters, Hughes paid the $5,000 before having her baby Feb. 7.
Pfeiffer, who said recently that he never saw Hughes' letter, nevertheless defended his hospital's pricing. He said managed care contracts cover a range of services, some more profitable than others, so it's not fair to compare Cigna's reimbursement rate on maternity, for instance, to the self-pay rate.
"To cherry-pick and say a specific managed care rate is lower than self-pay is not apples to apples," he said.
Pfeiffer said Mease Dunedin's $5,000 self-pay rate for caesarean sections, which has been in effect for several years, is a money loser.
"Our average cost for a C-section is about $5,100," he said. "Maybe it's time for us to re-evaluate it. But we get people shopping around for self-pay rates all the time, and I believe Mease is very competitive."
Pfeiffer said his hospital provided $8.5-million in charity care to uninsured patients last year and it offers a generous sliding scale of discounts for qualifying, low-income families.
Hughes said she was never looking for charity.
"I made a conscious decision to get pregnant, so I never looked for someone else to pay for it," she said. "I just wanted to be treated fairly."
By the time Hughes went in to have baby Allison, she had prepaid just less than $9,000.
Dr. Thomas Umstead, her obstetrician in New Port Richey, had accepted $1,900 rather than his usual $3,000 fee for prenatal and postnatal care. Hughes said she was initially nervous about trying to negotiate a lower price from her obstetrician, especially after a friend compared it to buying a parachute on sale. But she said Umstead was extremely accommodating, assuring her that he was in the business of delivering babies.
"We don't mind helping people out," said Jennifer Fowler, Umstead's office manager, who said the practice has very few self-pay patients. "She approached it in a very businesslike way. And if people simply show up uninsured at the hospital, what chance do we have to get paid at all?"
Anesthesiology Associates of Dunedin agreed to a $900 payment from Hughes, reducing its initial quote by $500. She paid the surgeon $250, matching Cigna's reimbursement rate. And, simply by asking, Hughes negotiated 15 percent off her prenatal lab fees and a 25 percent discount on the neonatologist's services.
Though insurance experts think consumers will factor quality data into their health care buying decisions, Hughes said her selections of hospital and doctors were largely based on past experience or friends' referrals.
"I wish there was more information out there about doctors' and hospitals' prices and quality," she said. "But there's really nothing for people to grab onto."
Overall, however, Hughes said the experience of bargaining for birth care was very empowering.
"I felt like I was in total control until I started dealing with the hospital," she said. "And I know so many people who are in this position and can't afford or can't get insurance. Word needs to get out that you can negotiate this stuff. You might hit a stumbling block, but if you don't ask, you'll never know."
Kris Hundley can be reached at 727 892-2996 or hundley@sptimes.com