News & Commentary

Surgery Shopping Saves County $$$

Santa Barbara County officials—following the example of large employers such as Boeing and Lowe’s—decided to do a little shopping, and are offering employees incentives to receive care at less expensive, out-of-town hospitals, Kaiser Health News reports.

The county encourages employees to travel to other regions in the United States for their surgeries by waiving copays and deductibles and paying about $2,700 in travel expenses. Santa Barbara County, which has about 4,000 employees, comes out way ahead in the deal, according to Kaiser. For instance, it paid $61,600 for a spinal fusion surgery for one of its employees that would have cost twice that much had it been done locally.

Andreas Pyper, assistant director of human resources for the county, tells Kaiser: “If that doesn’t speak to the inefficiencies of our health system, I don’t know what does. It’s almost like buying a Toyota Corolla for $50,000 and then going to San Diego to buy the same Corolla for $16,000. How long would the more expensive Toyota dealership last?”

The county saved 50% on surgeries for four employees since starting the program last year. Like many local governments, it has an older workforce prone with chronic illnesses and other problems that can lead to expensive medical interventions, noted Kaiser.

The program encourages some hospitals to offer deep discounts because it gives them access to patients they might not otherwise get. Also, they’re usually paid when the patients are discharged, so they dodge the tedious billing process.

Insurers want beneficiaries to be aware of price variation as well. Four large ones—UnitedHealthcare, Aetna, Humana, and Assurant—have worked with the Health Care Cost Institute to create the Guroo website, which allows some cost comparisons. But a recent check of the information on Guroo showed that it’s not very specific, a problem that has bedeviled efforts to improve price transparency and unleash market forces and comparison shopping as a way to rein in health care spending.

Meanwhile, back in sunny California, Santa Barbara County officials hope that they are finally getting a handle on medical costs that soared by 15% in each of the last two years.

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