Where’d that $800 medical insurance charge come from?

Key takeaways

• Surprise charges are routine: a preventative physical became a diagnostic visit billed at $800 after one question
• Price transparency data shows no correlation between cost and quality—a colonoscopy can cost $350 or $3,500 for no reason
• 164.5 million people (60% of Americans under 65) are covered by employer-sponsored plans, per KFF
• Healthcare cost boils down to two levers: negotiated unit prices and how much care we consume

I asked a single question. How was I to know that one query would transform my annual physical from a preventative exam to a diagnostic doctor’s visit?

Annual physicals, which are preventative, are free. I later received a bill for $800.

When I first looked at the insurance bill, I couldn’t understand why I was being charged. I come from a family of pharmacists, and I spent years working in hospitals in New Zealand. Later as a consultant in London, I learned how to run an effective healthcare system, all the way from how care is funded to how you evaluate population health. I’ve spent my entire life in the healthcare industry, and I still did not understand why that $800 fee was staring me in the face.

That was my first encounter with the U.S. healthcare system and medical insurance, but I soon learned that these types of surprise charges are a normal part of going to the doctor. I know this same situation has played out thousands of times across the country.

It was then and there that I decided to work to make U.S. healthcare pricing more transparent, care more accessible and the entire experience more affordable for everyone involved.

How can healthcare pricing data change the insurance landscape?

It’s more possible than ever before because healthcare pricing transparency has shifted from a policy aspiration to a federal mandate. The Transparency in Coverage (TiC) rules and the No Surprises Act required unprecedented levels of public disclosure from hospitals and payers.

When we first got a look at the pricing data, the information showed us a surprising fact: take any five providers, compare the same procedure, and you’ll see that there’s no correlation between cost and quality. I could see that patients paid $350 for colonoscopy at one facility, and $3,500 for the same procedure in a different area. For no reason.

The data files themselves are confusing and pretty useless at face value, but there’s a lot you can do when you put in the work. That’s where we started, and we realized there are so many other datasets we can use to nourish that pricing data, creating information that will lead to meaningful change in the healthcare industry.

Let me tell you, this was an exciting prospect. We started at the consumer level, but we soon realized that in order to effect true change and bend the cost curve for healthcare, to correctly assign prices to procedures and drive down total costs, we needed to move upstream.

Why focus on employer-sponsored health plans?

The most durable way to drive down healthcare costs and increase patient accessibility is by empowering the organizations responsible for designing and managing these employer-sponsored health plans. Why? More than 164.5 million people are covered by employer-sponsored plans. That’s 60% of all U.S. citizens under 65, according to KFF.

That means we needed to work directly with insurance brokers, who are the main point of influence and decision making for employer-sponsored health plans. Terabytes of health pricing data is available, but these customers still struggle to put the data in action, hampered by inconsistent formats, unstructured information and wide variability in the integrity of data.

From my experience in overseas healthcare, I know what it looks like to create incentive structures for providers that drive outcomes for patients. And drive down costs.

There are myriad reasons healthcare is expensive, but it really boils down to two ideas:

✅ How much we pay for a service or procedure: the price that insurance carriers negotiate with providers in their network

✅ How much healthcare we consume or use.

The Handl Health platform is tailor made to solve these two systemic healthcare challenges.

Healthcare costs in this country are a universal problem. Healthcare pricing and the quality of patient care have been issues for decades. At Handl, we’re solving these challenges by changing how healthcare plans are designed, elevating patient care while driving down costs for all parties.

Handl Health is revolutionizing how health plans are built and managed. We’re doing that by bringing the latest tech Innovations to the employer-sponsored benefits ecosystem. Our holistic infrastructure platform empowers users to design, deploy and monitor alternative health plans.

Schedule a demo to see how we can help you design better plans and flatten the healthcare cost curve.