The Truth Around Cost And Quality: Healthcare Cost Variability

When it comes to your healthcare options, how do U.S. businesses really know they’re getting the highest quality healthcare? 

Many people tend to believe that the more expensive a product or service is, the better it must be — think cars, restaurants, jewelry, or just about anything really. This type of thinking often leads us to believe that all we need to do to find the best quality is to do some research and open our wallets. However, in the US, finding quality healthcare isn’t anywhere near that simple. 

You Can’t Impact The Past: ↑ Advocacy + ↑ Quality = ↓ Cost

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Thursday, May 20, 2021, 2:00 PM ET / 11 AM PT

Unlike most things, healthcare services have an inverse relationship between cost and quality: the better the quality, the lower the cost. Unfortunately, the current health benefits market is completely opaque and lacking any meaningful, realistic transparency. Additionally, we have always been taught that easy = better when designing health benefits programs for employers and their employees. However, the cost and quality of healthcare can vary dramatically within the same city. Utilization Management for example, where your members access healthcare, is one of the single most important additions to your health plan design.

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Depending on where a person receives a procedure and who your insurer is, the cost of healthcare can vary wildly. For example, if you get your knee or hip replaced at Kaiser Permanente’s Oakland Medical Center, it can cost you approximately $69,000. However, when you receive the same procedure at Northwestern Memorial Hospital in Chicago, you could pay as little as $5,000. 

You may think this price difference exists because they’re two locations separated by thousands of miles, but at Sutter Health’s California Pacific Medical Center in San Francisco, the price for a knee or hip replacement ranges from $22,865 to $101,571. At the same hospital! 

If the cost can vary so greatly for one common procedure, clearly it can’t be used as an indicator for the quality of care. Perhaps we should rely on hospital and doctor rankings to determine who provides the highest quality healthcare?

Unfortunately, rankings tell us almost as little about quality as cost. In fact, every ranking system has different criteria that measure “quality” in different ways. The top hospital or doctor in one survey may not even rank in another — one study found that only 10% of the hospitals ranked as high quality by one system were also ranked as high quality by any of the other systems. This variability creates more complexity for employers aiming to offer the highest quality benefits for their employees.

When it comes to rankings, everyone has their own method, which means they’re all equally valid, even if they contradict each other. So, if we can’t tell quality from price or ranking, how can we ensure we’re getting the highest quality healthcare? 

It’s simple — we can’t. The system is too complex. There are too many locations with too many doctors with too many insurers with too many policies for us to find the best care at the best price at a location near us. And that’s exactly why we need help; that’s why we need healthcare advocates. 

A healthcare advocate is someone who knows the healthcare system inside and out and knows your coverage just as deeply. Every person has individual needs that demand individual attention. A healthcare advocate pairs patients with the right care, when they need it, and at a price they can afford. Engaging health care advocates ensures far greater quality of care and reduces costs for employers.

The reason cost or reviews don’t help us find great healthcare is because there is no single “Best Doctor” or “Best Hospital.” There is only the best doctor or hospital for you and fortunately, a healthcare advocate can help you find them.