Medical Sticker Shock: An Infuriating Encounter With A Cost Calculator

Man vs. The Cost Calculator

This is the story of a patient who tried to be a smart health care shopper. But the system wouldn’t let him.

The patient, Matt S., works in the health care industry and is a pretty savvy guy. Recently, his company offered a high-deductible health plan, administered by a large national insurer, which he selected. Under the plan, his family’s deductible is $2,800, which applies to almost all treatments and procedures except for primary care and prevention.

A few months ago, Matt’s doctor, who belongs to a primary care practice owned by Brigham & Women’s Hospital, suggested he get a cardiac stress test in order to determine the true severity of his “borderline” hypertension, and whether it required medical management. Before deciding to do the test, Matt — an otherwise fit 40-year-old marathon runner and “minimalist” when it comes to medication and interventions — wanted to estimate what it would cost out-of-pocket since he knew that basically 100% of the covered costs of this test would be his to pay. He figured if they were really high, he would ask the doctor if there was an alternative diagnostic option.

Navigating The System

As with many insurers these days, and particularly ones that offer high-deductible plans, which charge lower monthly premiums and are growing in popularity according to a recent report, the insurer’s website has a tool to estimate medical costs, which is supposed to help consumers get a sense of what the out-of-pocket costs for different procedures will be. Here’s what Matt saw when he plugged his zip code into the estimator and looked up “cardiac stress test:”

Estimate Medical Costs
Cardiac stress tests: A cardiac stress test monitors blood flow to the heart during exercise and compares it to blood flow at rest. Some heart problems that are easily missed when the patient’s heart is at rest become apparent when the heart is under stress. During the test, the patient exercises on a treadmill or stationary bike while being closely monitored.

Cost details for : Cardiac stress tests

Type of Service Cost Range
Cardiac stress tests $28 – $151

“I knew it was low,” Matt said of the online estimate. “You can’t even walk through the doors of the Brigham for $28, but I figured even if they’re wrong by a factor of 2, 3 or 4 it’s still worth it. Even if it costs $500 it would be worth it.”

So, on Jan. 31 he had the test. Unbeknownst to Matt beforehand, his procedure also required two echocardiograms, one before and after the stress test, as well as the test itself, which involved running on a treadmill while his heart was monitored. “The problem is, you don’t know that there are other components related to a “cardiac stress test” until you show up to have it done,” he said. “There’s really no easy way for consumers to find out all the pieces that might be included, either from the primary care doctor, the hospital or the plan.”

Charges Roll In: $4,000

As Matt tracked his charges on the insurer’s website, he was stunned. They were split into three separate parts totalling about $4,000. Yes, $4,000. There were charges from the cardiology group, and the hospital, even though Matt says he never saw a cardiologist. During the test, he said: “There was a student, an exercise physiologist and a sonographer.”

Matt continued to track the charges, and he saw that his insurer negotiated the bill down a bit by chopping off a couple of unbundled components.

When his paper bill arrived in the mail, it was for $2,300.

“Here I was trying to do the right thing by figuring out the cost,” Matt says, “But clearly, the system isn’t ready for prime time when it comes to transparency.”

Girded for battle, Matt called customer service. The first person he spoke to said he was charged for the echocardiogram as well as the stress test. So, even though the online calculator gave no indication that extra costs might be wrapped around a cardiac stress test, Matt went back to the estimator to try to figure out the price of an echo. Here’s what he saw:

Estimate Medical Costs
Diagnostic ultrasound of heart (echocardiogram): An echocardiogram (sometimes called an echo) is a test that uses sound waves to create a moving picture of the heart as it is working.

Cost details for : Diagnostic ultrasound of heart (echocardiogram)

Type of Service Cost Range
Diagnostic ultrasound of heart (echocardiogram) $147 – $290

Customer Service? Not.

Cleverly, Matt suggested that customer service charge him the top price for both tests and send him a new bill for $441.  But he was rebuffed, and passed along to a second level of customer service. That person told Matt he had a legitimate claim, and suggested he go through “The Appeals Process.”

“Not wanting to spend the rest of my life going through the appeals process, I decided to escalate it within my company,” Matt said.

He called his human resources director, who called the insurer’s representative who sold the company its health plan, and, eventually, the insurer agreed to hear Matt out. “They were responsive and called me right away,” Matt said. “I told them I did what you’re supposed to do in a high deductible cost plan — I looked up the cost. They acknowledged that the calculator could be confusing but the guy said, unfortunately, the charges are legitimate. I said, ‘They may be legitimate charges, but i’m not paying them. I suggested they charge me $500, that seemed reasonable.”‘

So, two months after the stress test, the insurer agreed to “tweak” the bill and override the cost codes, Matt said. Ironically, they agreed to bill him $300, but the final bill turned out to be $0. “Power to the people,” Matt says.

And The Moral Is?
Matt’s point in going public with his saga is simple.  “There’s a fundamental infrastructure problem,” he says.  “Neither the hospital nor the health plan is equipped to provide reliable and tranparent cost information to allow consumers to make an informed decision.  Furthermore, most people don’t have the stamina, connections or industry knowledge to pursue this.  If I worked at Tony’s Toasters, I don’t think it wouldn’t have happened this way.”

A spokesman for the national insurer concedes that the cost “estimator” can be imprecise. “It’s considered state of the art in the industry,” he said. “But we know it needs to be improved.”

He said a new, more accurate “cost of care” calculator that allows patients to plug in more detailed medical information — including the hospital they’re going to, the procedure, any discounts and other specifics of their insurance plan — will be available to consumers this fall. It will replace the current cost estimator.

Currently, this comprehensive cost of care tool is available only to to doctors and hospitals in the insurer’s network, the spokesman said. “We were cutting edge when we came out with our estimator,” he added. “But in terms of precision, the tool is not as precise as we’d like it. With the new calculator, it will be remarkably precise.”

Stress Rising

As for Matt, his story has a bittersweet ending.

Even though he prevailed over his medical bill, his stress test determined that he did, indeed, require medical intervention for his hypertension. He’s been taking his new pill for a while, he says, but it’s not really helping.

“Compared to what this drug is competing against — my highly increased stress — it’s not having an impact,” Matt says. “I’ve had to fight or inquire about every claim. If I had to do it again, I would go back to the high premium plan and get rid of the high deductible.”

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  • homebuilding

    It is very, very hard to understand why there remain any defenders of our current system, the costliest to consumers (and ever lower number of employers who offer a health insurance plan) in the world, by far.  It’s bankrupting so many businesses and individuals.  The great American tragedy–unfolding in so many ways, right in front of us.

  • susan256

    Despite the extra stress this must have caused Matt, I still would be driven to ask a lot of questions of all parties involved…practitioners, insurers,  and the hospital system. It is an imperfect system and we must cut through it. I found this helpful:

  • Krsphilipson

    I too have been working in heath care for a couple of decades-on both the provider and insurer sides.  My husband and I, for the first time this year, have a high deductible plan.  Yesterday we were puzzling over why a 20 minute doctor office visit and urine test was being billed at $510. With 6 visits over the course of 2 months we have a potential liability of $3,000+.  And this is for a minor health problem!  Fortunately (or unfortunately), I fully understand the accounting and contractual issues behind these charges.  But what this shows is that very few people really care what medical costs are until they are sittling there with checkbook in hand.  I hope that these types of experiences help patients understand that:  1) there is an awful lot of money being made in healthcare (and who in the industry has the incentive to change it under current reimbursement models?); 2) no one is looking at the cost/benefit equation except academics and policy makers; 3) the sky is the limit when it comes to providing care. There are no incentives to limit care.  Who will even touch that elephant in the room?  Not provide any possible service that just might help or work or teach a medical student??  And let’s not even bring grandma into the picture… 

  • 4Watson4

    This is an excellant illustration of why medical care is so expensive in the US.
    Unnecessary testing.
    1. Why would one do a stress test on an individual who runs marathons??!
    2. Why is an echocardiogram required to go along with a stress test?
    The physicians involved have forgotten the ‘very expensive instrument’ called a stethoscope! If one hears no abnormal heart sounds in a fit individual why is one doing all this stuff?
    Defensive medicine? Then it is time to take a refresher course, at the least.
    “Just to make sure’? Then it is time to retrain and regain conifidence in one’s clinical skills.
    A diagnosis of ‘borderline’ hypertension requires the BP being taken several times -> before and after exercise as a start.
    Cost would be at most 2 -3 office visits. Not the $4000 of technology that is irrelavant

    • 00doc

      The echocardiogram was the type of stress test (” a stress echo”). I agree that if a stress test had to be done, which is very doubtful, a simple treadmill EKG stress test would have been more appropriate. There still would have been the extra cost of the cardiologist reading the strips.

  • Michelle Bottorff

    Disclosure: I am an employee of an insurance company. While I agree that the cost calculator was way off, the “bill” isn’t from the insurance company but rather from the hospital/provider’s office. The insurance company negotiated that lower rate from the $4,000 initially spoke of but the insurance company itself doesn’t charge for the tests, that is what the hospital is charging for.

  • Peter

    has anyone tried to look at the indication or “medical necessity” for an exercise stress test in an asymptomatic “marathon runner” – presuming the “baseline” “screening” EKG for normal – please…

    • 00doc

      I was scanning down this list of replies to see if anyone brought this up. Stress tests are good tools for diagnosing anginal symptoms (chest pain, shortness of breath, palpitations etc). They provide no information germain to asymptomatic hypertension and in this case, a young runner, the false positive rate was bound to be much higher than the the true positive rate so the test was not just worthless but potentially counterproductive.

      The other poster was correct – the cardiologist bill is legitimate as the cardiologist is needed to interpret the test even if he is not present in the room when it is done.

      The insurance company sets virtually all of the rules regarding how claims are submitted, evaluated and paid. They seem to be able to figure it out just fine when dceciding for themselves how much to pay. It makes no sense at all to blame anyone else for the confusing nature of the payment system and their inability to automate for the patient a process that they have automated for themselves and do countless times per day.

  • Susan

    This was a great story to share, and the discussion has been really informative as well. As a MA resident, I have been curious and concerned about how much the state (and federal) policy reforms depends on “consumer-based” healthcare decisions — not only on care but on health insurance plan choice as well. However, clear information and transparency seems to be lagging far behind, as this story brings to light and many of you have noted. I recently had to buy a health insurance plan for my family and even with a background in benefits administration, I had to work extremely hard to dig into the details and to make lots of calls to adequately compare plans and estimate costs of high deductible plans. I think transparency and better information is critical for the “healthcare consumer” portion of these reforms to work. Where, beyond this site, are health care consumers collecting their experiences and voicing them to insurers, providers, and policy makers? How can we make our individual experiences have a greater impact?

  • Phil Kousoubris

    he’s absolutely right – the billing department of most departments/ groups/ hospitals have to weave through the thousands of insurers’ and medicare’s coding labyrinth, while creating their own pricing opacity for the consumer.

    but – being a ‘savvy healthcare iindustry’ worker – he should have figured out that the echo(cardiogram) US component was part of the test recommended ‘through the grapevine’. I was in similar shock when i paid my mom’s deductible for the same test years ago, and I’m a radiologist physician!

    Don’t get me started on why the costs are so high (cost shifting and medical equipment manufacturers highway robbery retail prices, etc).

    Can someone do a story interviewing the big imaging/other machine manufacturers on one side, and a smart MIT tech type for counterpoint, and hear their ‘sob story’ as to why they charge so much for what amounts to a fancy computer?

  • Jeff_Southshore

    I agree with geffe’s comment about the cardiologist’s behavior. The comment about the NHS is also instructive. In the UK, private physician groups bid for contracts to provide services to a defined population. They must then deliver that care within a defined budget. Failure to return a set portion of that budget disqualifies them from re-submitting a bid for the next contract. Imagine that – living within a budget! As President Obama has said, a “Medicare For All” approach would have been his first choice, but that’s politically not doable. So, we’re left with the accidental legacy of a hybrid public/private delivery system. This means denmark’s comments are also relevant. This is the system we have, so let’s let the market do as much as it can and help it deliver the correct pricing signals with transparency (Charlie Baker, the former CEO of Harvard Pilgrim and Gubernatorial candidate here in Mass, was absolutely correct on this issue.) There’s lots of common ground here – we just have to have the nerve to call the game. BTW: Our local insurers have a duty to start advocating for their primary constituency – their paying customers. They spend far too much time thinking that their first duty is to the providers.

  • Amy Lischko

    why am I able to get very good price information for my orthodontist care, LASIK surgery or any cosmetic procedure I contemplate……because I am paying out-of-pocket. These providers have had to bundle their care into a package and price it reasonably (well, not always reasonably but at lest transparently!) If more people were enrolled in plans that had deductibles, I believe the market would move in this direction. It’s a chicken-and-egg situation, why provide the information if only 10% of the market cares and it’s much easier and lucrative to hide the true prices.

  • Miro

    A HUGE healthcare cost reform would be to make prices transparent, and to make them available at the point of delivery. Sticker shock alone would drive down the level of services we consume without thinking about it, simply because they’re covered. There is a European country, I forget which (Switzerland? Holland?), where the patient has to pay the bill and then get reimbursed (quickly) by the insurance company — and doctors have to list a schedule of fees for services publicly in their offices.

    This would go a long way to reining in healthcare costs.

  • geffe

    You know what, I do blame the insurance companies. They are there to make profits, period.
    This only adds to the problems we face as nation.
    The whole system is broken as the commenter below and this article clearly points out.
    “There were charges from the cardiology group, and the hospital, even though Matt says he never saw a cardiologist.” This should be made illegal, period. There is no way that padding a bill should be tolerated. This also points to the extreme dysfunction of our for profit market based health care system. In short, it’s broken and not one actor in this mess is really willing to deal with it. The people, the doctors, the hospitals, the pharmaceutical corporations, the health insurance corporations are all playing these games and not willing to give up anything.

    • denmark

      geffe, while your frustration with insurers is understandable, you offer not alternative solution. Everyone (other than the patient) must make a profit or else they couldn’t exist (hospitals, doctors, brokers, employers). If their services are not necessary, then they would not be part of the system. Insurers provide an invaluable service which is to spread the risk. If you prefer, bypass insurance company and pay for your hospitalization directly out of your own pocket. No one is holding a gun to your head to buy insurance.

      • geffe

        Well they are in Massachusetts, I am mandated to buy insurance in this state.
        You seem to think our market based health care system is fine and dandy.
        If that’s the case how is that not one country in world has been trying to copy our dysfunctional health care system.

        My solution is single payer and that means everyone has to give here.
        I lived in Great Britain for years and used the NH system there and all I have to say is my experience with was very good. I also know of one person how had a liver transplant who most likely would have died in this country as they had a rare live disease which would have been seen as a preexisting condition.
        Not only did they get the transplant they had wonderful outpatient help that was needed for years. Our health care system is broken scrape heap, period.

        • Dlehew


          In case you hadn’t noticed, you don’t live in a socialist country any more. And if you liked the system in Great Britain so much, why don’t you go back there – and soon!

          • geffe

            How mature of you. An ad hominem personal attack.
            First off you need to get some geo-political facts straight.
            Great Britain is not a socialist country. Second being an immature adolescent and lashing out at people who have a different opinion than you do is not helping the situation. Now is it. Maybe you should try some anger management therapy. If you do I hope your insurance covers it.

    • Michelle Bottorff

      I am a little confused by your statement. You first say you blame the insurer, but then you go on to talk about how the hospital and cardiology group shouldn’t have been able to bill the way they did. That isn’t the insurance company, but rather, the practitioner. Disclaimer: I work for a not for profit health insurance company. I agree that insurance companies have a share in this but so do the do the practitioners, hospitals, and even the consumers. If we made healthier lifestyle choices some costly care could even be avoided (not saying that was the case here, just in general)

      • geffe

        I should have made it clearer. As you have pointed out all the parties are to blame in the mess we call health care in this country. As for folks like myself, well I’m getting older and so are you. I live a pretty healthy life style as well.
        I don’t smoke, I drink moderately and only beer and wine. I eat home cook meals for the most part and those are predominantly vegetarian.
        Still I’m going to get old and get sick. It’s going to happen.

    • Grattongal

      The cardiologist interpreted the test. If Matt wants to interpret his own echo, more power to him!

    • Paula

      Perhaps Matt never saw a cardiologist, but who do you think reviewed the results of the stress test?  If the stress test had been abnormal, but Matt was not told about the abnormality and then later had a heart attack, who do you think would be identified as the clinician to sue for negligence?  THE CARDIOLOGIST.  That’s another piece that patients (consumers) do not understand about our system:  someone, somewhere is taking the responsibility (professional and legal) for reviewing all testing and that is what, to some extent is being compensated.

  • Jmtyrakowski

    Disclosure: I’m an employee benefits broker. And while I sympathize with Matt, who tried to do the right thing, this article makes the mistake people have been making my entire 20-year career: Blaming the insurer for the practitioner’s bill(s). A huge part of the reason the posted prices aren’t reliable is because for years providers have insisted – contractually – on non-disclosure. They don’t want transparency (economists call this “asymmetry of information”.) The insurer is literally prohibited from posting your provider’s specific rates (that’s why they post “ranges” – they’re literally not allowed to say.) It’s a sweet deal: hide behind people’s reluctance to confront issues of cost directly with their doctor, then blame the big bad insurance company when everything goes pear-shaped. Notice that the article alludes to another provider tactic – “un-bundling” – without delving into the philosophy and consequences of this behavior. Essentially, providers attempt to maximize their incomes by atomizing the service into its component parts and billing separately for each. They hire software consultants to teach them how to do this. Simultaneously, insurers and third party administrators spend millions on software to combat this. Ultimately, it’s the premium payors who suffer. In short: The game is rigged and the health care profession hides behind the emotional barrier of talking about your money and your health at the same time. Caveat emptor!