Out of Pocket Shouldn’t Mean Out of Luck

HBI Blog / Out of Pocket Shouldn’t Mean Out of Luck

For the past couple of decades, paying out of pocket for health care services has been almost impossible for all but the richest patients. The reason prices have risen  to astronomical levels are well known to those in the medical service industry.

Patients, on the other hand, are often left in the dark about the real cost of their health care services. This is because there is no place to go and discover exactly what you are paying for when you pay a medical bill.

Breaking Down the Health Care Dollar

In researching this piece, we discovered that nowhere that we could access as a patient, an actual breakdown of what you’re paying for with your healthcare dollar. We did, however, find all kinds of studies that gave us pieces of the puzzle until we finally came up with a full picture.

On average, the estimates for every dollar spent on health care breaks down like this

  • 40 cents go to administration. This includes all the paperwork and the staff to do the paperwork involved in billing, insurance, collections, and meeting government regulations.
    • 28 cents of this go into insurance-related billing and collections.
    • 12 cents go to all non-insurance billing, collections, and government regulations
  • 20 cents go to care. This includes all overhead, equipment, tests, and procedures.
    • 4 cents for various overhead costs such as rent or non-medical equipment
    • 4 cents for medical equipment
    • 5 cents for tests
    • 7 cents for procedures
  • 20 cents go to trained medical staff. This includes doctors, nurses, pharmacists, and technicians and pays for their salary, continued education, and benefits packages.
    • 5 cents go to personal taxes
    • 6 cents is non-cash benefits
    • 9 cents is paid and other cash benefits
  • 10 cents go to prescription medications.
  • 5 cents go to the government. This includes taxes and fees paid by the practices, not by any of the staff.
  • 5 cents go to other medical services and needs. This is a catch-all category that includes, but is not limited to – non-prescription drugs, bandages, and vitamins either given by the provider or bought by the patient.
  • The average accuracy rate for all the studies was +/-3 cents.

What That Means to Out of Pocket Costs

Self-pay patients and cash patients that have not found a cash doctor that specifically bills only for actual cost are paying  roughly 28 cents out of pocket for services they do not use in any way. Moreover, every self-pay patient and cash patient is paying approximately 45 cents of every dollar to costs that have nothing at all to do with actual health care services.

Every industry has overhead costs. Every industry passes these costs on to the customer. This is expected and accepted. However, the healthcare industry seems to be the only one that actively allows and accepts charging overhead costs to a customer that in no way apply to THAT customer.

How HBI Helps Fight Overpaying Out of Pocket Costs

Using Health Beyond Insurance (HBI) offers a great many ways to save for both the provider and the self-pay patient. Using just the example of one doctor, the reduction in cost is automatically 28%. When you consider that the costs of all the other services – Pharmacy, Testing, Procedures, etc. – you very quickly get to the point that what used to be a $100 bill could easily be a $70 or even lower dollar bill.

So what does all HBI services cost?

For the Provider:

  • Total Cost of  becoming part of the listing and Using HBI services -$0.00
  • Pay a small fee when we sell a service a you have listed
  • Providers can pass on these savings to their self-pay patients

For the self-pay patient and cash patient

  • Total Cost of Using HBI and all it’s services – $0.00
  • Self-pay patients can use these savings to access better care

The HBI healthcare portal is dedicated to allowing both self-pay patients & cash patients and providers to join the fight to reduce healthcare costs so that everyone can finally afford all available health care services.

Patients will finally be able to comparison shop for their health care services.

Providers are once again able to structure their prices around actual costs instead of bloated administrations.

Everybody wins. That is the HBI way.



Sources: Blue Shield of CA – 2010 to 2011, HPA Plan Survey 2012

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