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Our Perspectives


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Mike Nash

Chief Executive Officer



Jan 13, 2020

Surprise Medical Bill! That Will Be $7,670

How a routine surgery illustrated one of the many challenges facing price transparency in healthcare today

It’s been two years since the dermatology experience that set me back a few hundred bucks and left me frustrated with a system that doesn’t work with patients’ best interests in mind. It wasn’t frustration with the care-delivery side but with the financial burdens we bear as patients — oftentimes burdens that aren’t disclosed to us until it’s too late to take action.

Enter the world of in-network and out-of-network fees. Rather than getting into the complexity of payer-negotiated contracting and networks, we’ll glance the surface of the systemic price transparency issue across the US healthcare system.

Meet James, our 3-year-old in need of a tonsillectomy.

Last October, our son was struggling to breathe easily at night, and our family was struggling with his incredibly loud snoring. We took him to see an in-network specialist, and the doctor agreed that he needed a tonsillectomy.

At the time, we’d just switched health insurance, which meant that our deductible reset for the year. So we decided to defer the surgery until January and apply the costs to the next calendar year.

Fast forward three months to the pre-op appointment for James' surgery, just 5 days away at this point, and I realize I have no idea what this will actually cost me. At the time, this seemed like a perfectly reasonable question to be asking, but turns out I should have asked it months earlier: “What is this going to cost us out of pocket?” I asked.

“I can put in a request and we can get it to you in seven days."

A couple of days go by and I get a call from the doctor’s office with a set of pre-registration questions. At the end of the call, I ask again about the price estimate. I hear whispering on the other end to someone nearby, followed by, “Sure, let me transfer you to Susan. She’s sitting right next to me; she can help you.” Susan from billing has my insurance information already. She knows the procedure and says she’ll get back to me after she calls our insurance company. Susan called back and shared,

“While the doctor is in-network, the facility is out-of-network."

She shared that the negotiated rate for the procedure at this facility is $9,340, and after applying our insurance the remaining balance would be $7,670 - not including the anesthesiologist or physician fees, which would be billed separately. To which I replied, "No, thank you."

By asking the right questions, we avoided what would have otherwise been a huge out-of-pocket expense that we were not prepared for. Thankfully, we knew to ask the question. Many patients don’t, and this happens all the time.

The problem is only getting worse, as patient liabilities increase in the US with high-deductible health plans. Care is moving to lower-acuity settings — specifically because of cost. As patients bear more of the financial burden, the incentive to find lower-cost options becomes increasingly urgent.

So we cancelled our son’s surgery and are now in the next phase of the journey — evaluating alternative options that minimize out-of-pocket costs while maintaining care quality. Specifically, we’re looking for an in-network Ear, Nose, and Throat (ENT) specialist who performs tonsillectomies at an in-network outpatient facility that’s not attached to a hospital, so we can avoid the exorbitant facility fee. Not an easy task, especially considering the doctor doesn’t know the in-network answer without consulting his billing department to run a covered benefits check.

We’re also lucky that we had the time to shop around. This isn’t how Americans are primed to engage with healthcare, though.

As patients, we need information to make better financial choices in our care journeys — and this includes simply knowing which questions to ask.

Even if we do ask the right questions, we get an estimate for out-of-pocket costs. And as I learned first-hand, sometimes only an estimate for a subset of the total costs! Across the country, surprise bills are becoming commonplace.

Today, we’re still far from the consumer experiences in healthcare that we expect everywhere else in daily life. Patients too often don’t have an advocate, and too often end up footing a bill that’s much larger than necessary.

The experience with my son’s care helps validate an active area of development for Lumedic. This year we’re working on a patient financial engagement product line, which includes accurate estimates for patients. Our data science team is building the model that drives these estimates, and we look forward to the day that they’ll no longer be just estimates.

More to come!

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