The Phases of Shopping For Healthcare

The shoppability of healthcare is a hotly contested area of the health insurance debate.

“Lasik is the way. Lasik has gotten better and cheaper over time!”¹

“Nonsense, you can’t shop for care when you’re unconscious.”

Both have some truth. Not all health interventions are shoppable. Many are, 40-60% of care², and if you’re paying for your plan directly you can shop for that as well. If you get coverage through work you likely have a menu of 2-3 plans to choose from.

What counts as shopping depends on what you count. There are dollars you spend when you pull out an insurance card or swipe your Lively HSA card. There are also the payroll dollars you spend if you get insurance through work, which over time is the biggest piece for most³. There are the millions who buy their own coverage and pay full sticker price. They choose noticeably higher deductibles: 3x higher. $4,500 vs $1,600 with employer-sponsored insurance.

• First: the plan you choose. The premiums you pay matter a lot and could mean tens of thousands of dollars over time if you’re over-insured. Be informed.

• Second: routine items like over-the-counter, cough syrup for Billy, or a basic pediatrician visit. The dollars are small. This is the “oil changes” of healthcare⁴.

• Third: These are felt during the deductible phase up until your out-of-pocket limit. >90% of consumers in a given year never pass this phase. This is where dollar savings at point-of-swipe can flow to the consumer, the $400 MRI at an imaging center instead of $2,000 at the big fancy hospital. The specialist who doesn’t recommend unnecessary surgery.

• Fourth: you’ve reached your $5,000 out-of-pocket maximum and you’re dealing with bigger events like a new baby, an accident, or a cancer diagnosis.

Not every penny is worth chasing down the street but healthcare is shoppable enough, and if you do it over decades you’ll save even more. Positive compounding works.

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Disclosures: my personal healthcare coverage is a $5,000 deductible cost-sharing plan (non-ACA compliant). Healthcare investments: Cigna, Clover Health, HealthEquity. I have an affiliate agreement with Lively HSA. I’m also a happy customer. 

1. Could Healthcare Be Like Lasik?
2. ranges of 43% from the HCCI and over 60% from Dr. Marty Makary
3. there’s a free nifty tool to help consumers know if they’re getting a good deal at work
4. imagine the price inflation of oil changes if supply was restricted and you had to use regulated insurance, where higher prices meant higher profits for the company