Published Pricing—What is usual and customary?
PRICE
BOUNDS OF OUR ASSOCIATED SURGEONS
Health insurance companies collect the
published prices of most non-elective procedures. This
is done through
the bill or claim form. An array of prices, fees and costs
are developed for physicians practicing in a geographic
area.
This distribution of physician prices results in a percentile
ranking by the insurance companies of the highest priced
service/physician
to the lowest usually by zip-code or other geographic area.
The insurance company, according to policy,
may then determine what price they are willing to pay for
each service in a geographic area. For example, your policy
may read: “we will pay at the 75 percentile of what
is usual and customary”.
This makes pricing, coverage and payment
very easy to understand in the world of traditional health
insurance.
---- This is not
the case in elective procedures. ----
A physician working in our market economy
establishes prices, fees, and costs. This is based on what
the consumer or patient is willing to pay, or what competitors
are charging. What the consumer is willing to pay may be driven
by what they can afford, or if there is some service or outcome
the physician provides that the patient will be willing to
pay a premium. Ultimately, the price
or fee the physician may charge may be due to his own capacity
to provide the service and the demand that the public has
for this very scarce resource - his time.
For published pricing view these sources:
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In our market economy prices must be the
same for all, or there may be a question of price discrimination.
These prices may of course be discounted for individuals or
group purchasers if a certain volume is offered or other concession
is made, or if there is a special promotion or offer given
to the public at large.
Many physicians are true artists and their
services are so in demand that they can command high prices
or fees. Their services become exclusive, and expensive. However,
some physicians may price their services at the highest rate
in order to position their services in the minds of the consumer
as being “premium”.
It is essential to ask about their credentials,
time in practice, number of procedures performed
to learn if this premium price is warranted or if they are
just positioning themselves to appeal to the upscale mind.
Additionally, a lower priced physician
may not be signaling a lower quality to the consumer. They
may not have updated their prices to be in keeping with the
demand for their services or the “going rate”
in their community. Therefore
price is not always a signal for quality.
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