by Ralph Weber
About a year and a half ago, Perry Hunt needed a hip replacement. He had been in constant pain for years and owned a construction company, and could not afford to take the 6 months off that he was told he’d need for a hip replacement. Eventually the pain got so bad, he could not stand it, so he finally booked the surgery. He was approved by his insurance company and had his pre-op visit. Then, just 5 days before the scheduled procedure, the hospital called him and told him that the insurance company would not cover it, but if he paid cash at the time of care, they’d take 30% off the price. That would reduce his cost from $100,000 to $70,000. He could not afford $70,000 and 6 months away from his company, so he cancelled the surgery.
Then he found MediBid. He made an online medical request and got bids back ranging from $7,500 to $21,000. He selected the $21,000 procedure since he liked the quality outcomes of the surgeon. In addition, this surgeon would perform a minimally invasive procedure, so his recovery time would be 2 weeks, not 6 months.
The above story was featured on the Today Show in the fall of 2013.
Now comes the sequel to this story:
Almost 18 months after his hip replacement, his other hip needed replacing. Since he was so thrilled with the outcome that he got from the orthopedic surgeon the first time, he decided to go to the same surgeon. Only this time, his insurance plan would definitely cover the cost and the doctor was in network. In March of 2015, Perry went for surgery on his other hip with the exact same surgeon and facility.
On March 19, he received his EOB (Explanation of Benefits). It stated that the billed rates were about $65,000, but that the insurance company had gotten a $29,000 discount. After paying his deductible and co-insurance, the cost to him was $6,500. The remaining $29,500 was paid by the insurance company and charged to his employer’s health plan.
Why would it cost one of the largest insurance companies in America $36,000 to get what he had paid $21,000 just 18 months earlier through MediBid? Are insurance companies getting a fair price or are they being overcharged? Employers are saving incredible amounts using MediBid instead of their insurance networks.
One question which has not been asked is whether the insurance provider actually received $36,000?