health care costs
Medical Care

The High Cost of "Surprise" Medical Bills

The average anesthesiologist, emergency physician, pathologist and radiologist charge more than four times what Medicare pays for similar services, often leaving privately insured consumers stuck with bills that are much higher than they anticipated, new research suggests.

The problem is that most patients do not actually choose these doctors with the highest markups, allowing them no opportunity to anticipate how high their bills will be, say the researchers from the Johns Hopkins Bloomberg School of Public Health and the Johns Hopkins Carey Business School.

The findings were published in JAMA.

After anesthesiologists (charging six times what Medicare pays), the interventional radiologists (4.5 times), emergency medicine doctors (four times), pathologists (four times), neurosurgeons (four times) and diagnostic radiologists (3.8 times) have the highest markups. Those specialties with the lowest markups are internists, psychiatrists, and family doctors — physicians with whom patients have the most interactions and whom they are most likely to actually choose.

These high charges affect not only the uninsured, but also the well-insured when they see physicians out of their insurer’s network. While most people expect to pay more when they choose to go to an out-of-network physician, they are often surprised to be charged four-to-six times more when they are referred to a specialist, see a doctor as part of a medical emergency, or when an out-of-network physician is practicing in an in-network facility. Many times, it is an emergency situation and an out-of-network provider cannot be avoided.

The findings, published Jan. 17, suggest that patients should be vigilant in choosing doctors that are in their network whenever possible, and policymakers should find ways to protect patients from ending up with surprise medical bills.

“The doctors with the highest markups are often the ones that patients don’t actually choose,” says the study’s senior author Gerard F. Anderson, PhD, a professor in the Department of Health Policy and Management at the Bloomberg School. “Many people are shocked two weeks or two months later when they get a bill from a doctor they didn’t really meet and no one told them what the exam would cost and later they discover the price is outrageous. But this is happening all the time.”

Ge Bai, PhD, CPA, an assistant professor of accounting at the Carey Business School, and Anderson analyzed the 2014 Medicare Provider Utilization and Payment Data, comparing physician charges to Medicare rates across medical specialties. The data set included more than 400,000 individual physicians in the United States.