Free Market Medicine and Lab Tests


As my surgical experiences come to a close, I have now begun to receive all the bills for services that were provided to me.

One bill shows what one national health care provider considers “fair payment” for laboratory testing performed prior to my surgery. I matched that bill up with my insurance explanation of benefits to determine which prices go to what tests. Click on the picture below to enlarge.

Fees for the lab testing were discounted anywhere from 70% to 90% off the provider’s published rates.
A CBC cost $8.12
PT/PTT (coagulation studies) cost a total of $10.15
A basic metabolic panel cost $8.12
Nearly $200 in “handling fees” was waived.
They accepted five bucks instead of the $16.70 they charged for drawing my blood.

In summary, it would have cost me $350 for the tests if I didn’t have insurance.
Instead, it cost me $31.46 for the tests since I do have insurance – more than a 90% discount.
Great for me, but a gouge to patients who don’t have insurance.

The thing is … if the medical provider advertised these rates to all the patients who don’t have insurance or who have high deductible plans, it would probably have lines of customers out the door waiting to have their blood drawn. In fact, they would probably still have lines out the door if they doubled the prices below.

I don’t care how much providers want to mark up their prices. That is their business and they can keep that secret.

We go to a grocery store and purchase products at the advertised price, yet few of us know how much the grocery store has marked up the price. The ability of shoppers to vote with their feet keeps prices down.

In order to decrease costs of health care, health care reform must include some form of transparency in pricing.



  1. Wayne Conrad on

    We’ve already got socialized medicine: If you’re private pay, you get to help pay for all those who can’t pay. Yay.

  2. The bigger question is…why is an otherwise-healthy dude not on Coumadin (presumably) getting a pre-op PT/INR done anyway?

    Who uses a PTT for anything?


    • I’m not a surgeon, but I think it might be nice to know that my patient that I am about to cut on doesn’t have undiagnosed Von Willebrand’s(or other less common clotting errors) before I begin major surgery on him. It is a fairly common but often unknown diagnosis.

      • Well I am a surgeon and there is no reason to order coags on someone not taking anticoagulants and without a family or personal history of bleeding disorders. it is not cost effective. with ASA or plavix, you just have the patient stop taking them 7 days in advance.

  3. Yup, due to various circumstances, we’ve been without insurance for ~2 years. We’re pretty healthy as a family, so when we have needed something, we’ve used the little clinic in the grocery store. I’d like to have a family doctor, but it’s very hard to get a straight answer re: what the possible charges are (and they are so high since paying cash). With the clinics, I can look up online and see what they will charge for everything. Yeah for a HSA starting in July finally.


    Large supermarkets operate on a gross margin of about 26%, and a net margin of about 6%.
    When they sell you an average $100 worth of stuff:
    They pay a supplier $74.
    They pay expenses of $20 for buildings, energy, accounting, and employees.
    They pay their investors/owners $6 profit.

    If we legislated a profitless food distribution system, all we could reasonably “save” is that $6. Realistically, we would pay more than the original $100, because there would be no one with an incentive to be competitive, so the business would be less efficient.

    The counter-intuitive result is that food costs less in a system with private profit than it would in a system of “non-profit” government direction and control.

    That is also the counter-intuitive truth about healthcare, which suffers from layers of well-meaning but suffocating government command and control.

    Government Management of Doctors

  5. Bill Alexander on

    … “transparency in pricing”.

    Isn’t that when they use invisible ink to explain everything?

  6. newsouthzach on

    The problem of course is that the insurance companies negotiate some large discount off the “standard” rate — so the standard rate has to be astronomical!

  7. For patients without insurance, most hospital billing offices are willing to negotiate to the “insurance” discount rate just so they get paid at all. The trick is, the patient has to know to ask for that rate. They don’t offer it up front without prompt.

  8. Pharmacies are as bad. Years ago I had to fill some scripts for a flu/bronchitis episode and the Tricare computers were down so I couldn’t prove that I had insurance. The Flovent cost me $70. Two days later I went back and they ran the stuff again, and between my co-pay and the insurance they accepted $40. I can’t believe that they were losing money on the $40, nor that they have to pay the manufacturer based on what they can sell it for. So folks without a prescription plan get hit 75% more?

    I’d like to see a system where pharmacies charge X for drug Y to everyone, the only question being how much of that comes from the patient and how much (if any) from their insurance.

  9. At the Gas Stateion this morning, paying cash resulted in a ten cents a gallon discount. In medical care, paying cash results in a mark-up. What’s wrong with this picture?

    • Is this a serious question? Stores have to pay a fee to credit card companies for every single transaction that is done using plastic. By encouraging you to use cash, they don’t have to do this fee and they pass the savings on to you. Buying gas and buying medical care aren’t even in the same league.

  10. I wish I could find the price of an MRI since I have to pay for it myself. No one seems to have that info. (wink, wink)
    I thought one of my kids had a hernia. I called to ask the price for a cash paying patient. It was going to cost me 600 for the surgery…and again, not one anesthesiologist would give a price for his cost.
    I wish I could tell them all to take a hike.

    • I’m with you.
      Most states have consumer fraud statutes. If you have written proof that they would not provide you with a price before the procedure/test, you probably could tell them to take a hike in small claims court.

  11. When we were without insurance, I also tried to get prices out of my medical system. They couldn’t tell me outright. I had to go through layers of people and more than two weeks waiting before someone could give me a price for a lab test.

    That is ridiculous.

    And I was able to save a lot of money after that by going through a “patient directed testing” service.

Leave A Reply