Expensive Hospitals Aren’t Better — So Why Do People Think They Are? 

It’s human nature to assume that when something is more expensive, it’s better. Research shows that there’s a deep psychological link between an item’s price and the decision to buy it. That’s why brands that engage in prestige pricing — such as luxury car and fashion companies — know that by inflating prices, they can increase demand for their products.

It’s true that in some cases cost and quality are linked. But it can be hard to know when to reach deeper into your wallet — and when to save your money. A new report from the National Bureau of Economic Research just answered that question regarding health care. It found that much of the time expensive hospitals were no better than those that charged lower prices. The researchers found that when patients went to high-priced hospitals, their spending went up by 52%, but they didn’t get better outcomes unless they lived in less concentrated markets, such as rural areas.

“The key takeaway is that when it comes to health care, you don’t necessarily get what you pay for. Just because a hospital is more expensive doesn’t mean it’s higher quality,” says Michael Hochman, M.D. He’s a primary care physician in Los Angeles and author of 50 Studies Every Doctor Should Know. “We also know that research shows that more health spending doesn’t necessarily translate to better outcomes.”

Here are four ways to save money without sacrificing medical care.

Did you know that you can price-shop the cost of a procedure? Go to Healthcare Bluebook to find medical facilities near you and compare costs.

Ask about outpatient facilities

If you need a procedure or surgery such as a colonoscopy or cataract removal, ask your doctor if you can have it done at an ambulatory surgery center. These are care sites that offer surgical procedures as well as diagnostics and sometimes even preventive care services. Often, getting care there is cheaper than having the same procedure done at a hospital.

A recent UnitedHealth Group analysis concluded that ambulatory surgery centers can lower costs for hospital outpatient procedures by 59%. Translation? If patients regularly shifted routine outpatient procedures to lower-cost ambulatory surgery centers, they’d save an average of $684 per procedure.

In 2019, for example, the typical hospital outpatient procedure cost about 144% more than the same procedure done at an ambulatory surgery center. Since a common hospital outpatient procedure costs, on average, more than $7,700, that means the same procedure in an ambulatory surgery center would only be about $3,160.

Consider a virtual visit

If you feel under the weather, you may want to consider asking your doctor if you can do a virtual visit, rather than an in-person one. It’s not just that it saves you time and is convenient. It costs less than $50 on average, compared to about $160 for a visit to your health care provider. Virtual visits are good for relatively minor complaints such as cold or flu symptoms, pink eye, and even sinus problems.

Research suggests that you’ll get similar care to what you’d get in your doctor’s office. Patients who did telemedicine visits for upper respiratory infections, for example, got adequate care and weren’t likely to be given unnecessary medications, such as antibiotics, according to a study published last year in the International Journal of Infectious Diseases.

“Believe it or not, we can actually have a patient angle their phone or iPad and shine a flashlight into their throat so we can get a decent look,” says Dr. Hochman. But if you have a more complex issue — for example, you think you have a urinary tract infection, or you have a bad cough that requires your doctor to listen to your lungs — then you’ll need to see them in person.

Head to urgent care instead of the emergency room

If you burned your hand grilling or think your kid broke their arm, the emergency room (ER) may seem like your only option, especially if it’s the weekend. But much of the time, urgent care clinics can treat the exact same conditions at up to $2,000 less than the emergency room. The average urgent care visit is only about $180, while a trip to the ER costs about $2,200.

Another bonus: You’ll usually wait only about 30 minutes at urgent care, compared to about 2 hours in the ER.

If your medical provider isn’t available, you can head to the nearest urgent care center for things like:

• Sprains
• Minor broken bones (such as a finger)
• Minor burns
• Minor infections
• Strep throat
• Earache

But if the condition seems more life-threatening — for example, heavy bleeding or chest pain — don’t hesitate to head to the ER. Just don’t make the mistake of heading to a freestanding emergency room. Sure, they may advertise shorter wait times and large rooms, but many aren’t in network. They also often don’t have the ability to admit patients to a hospital, in which case you’d have to pay for an ambulance transfer as well.

Stay in network

Whenever possible, see doctors who are in your insurance network. You’ll pay less because they have a contract with your health plan. But you also need to make sure that all your providers are in network when you’re in the hospital.

Once you know where your procedure will take place, call the facility to make sure that it’s in your health care network. Also, ask which health care professionals the facility uses for services that you may need, such as anesthesia. You want to make sure that all those providers are in the network as well.

Some doctors may also ask you to sign something called the Surprise Billing Protection Form. Don’t. When you do so, you agree to pay their out-of-network charges. Also, doctors aren’t allowed to slip this form to you at the last minute — it must be provided at least three days before treatment. The form should also list in-network doctors who are available to provide the same care. It’s best to try to use them first, since it will be cheaper.

Use Guroo.com to help you find the most affordable place near you to have your procedure.

Additional sources
Price versus quality: National Bureau of Economic Research (2022). “Do Higher-Priced Hospitals Deliver Higher-Quality Care?”
Antibiotics and virtual visits: International Journal of Infectious Diseases (2021). “Antibiotic Stewardship in Direct-to-Consumer Telemedicine Consultations Leads to High Adherence to Best Practice Guidelines and a Low Prescription Rate”
The no-surprises rule: Centers for Medicare & Medicaid Services