Return on investment (ROI) has become a popular concept for companies, charitable organizations, households and even government agencies (humor emphasized). In simple terms, it’s a measure of the benefits delivered above the costs expended for a product or service.
There are many circumstances when it’s easy to measure ROI, such as when you invest in a security or put money in the bank. However, it’s not always so cut and dry.
Take health care costs, for instance. You’ve heard me talk about limited transparency in the health care space. It’s difficult for the average consumer to investigate the actual out of pocket (OOP) costs associated with the most basic medical procedures. An MRI image can vary in cost by thousands of dollars, depending on where the MRI is administered. The same goes for an operation. In fact, many people don’t know that surgeons are often accredited to perform procedures in multiple hospitals. The actual procedure cost is a constant, while the facility charges and other necessary services can vary significantly. By making the correct facility choice, you could save thousands.
Take note of the following real-life example:
A patient calls to pre-certify a total knee arthroplasty surgery. Without any professional assistance, the patient wouldn’t know the following facts (actual facility names have been altered): 1
Facility Total Cost
**** Memorial Hospital $28,400
**** Methodist Hospital $70,108.12
**** University Hospital $23,300
While all three hospitals have acceptable quality ratings and are geographically compatible, the least expensive option has the highest quality rating (believe it or not). By choosing the least expensive option, the patient saved 67 percent over what he/she could have paid.
Unfortunately, without assistance from a professional who can research the relative costs, it’s difficult for the average consumer to reach an educated decision. That will change, as transparency in the medical cost arena is evolving. Someday – probably sooner than we think – we’ll be able to shop for health care like we do for any other goods.
In the interim, here are some simple things you can do to positively influence your ROI:
1 Actual data received in 2016 from Paradigm Health
2 US Dept. of Health and Human Services
3 Expenses vary by plan.