How ‘Cash Pay' Could Save You Money on Hospital Bills (2024)

The idea came after Joanne Rodrigues-Craig's daughter got sick.

"My daughter got a flu test at an emergency room," Rodrigues-Craig said. "We got an $800 bill for this flu test, and I called the hospital and they told me, 'If you had paid cash, it would have been 30 percent less.'"

Like many parents and patients, Rodrigues-Craig had no idea she could have paid less. But her initial frustration became inspiration and motivation to help other California families.

"I'm really passionate about solving fuzzy technical problems, and this was a perfect one," she said.

That curiosity had served Rodrigues-Craig well. A data scientist and author, she holds multiple bachelor's and master's degrees in mathematics, economics, demography, and political science. She recognized that medical costs are a problem for millions of Americans, and that the problem could be tackled with a scientific approach.

Her quest to make saving money on health care more affordable took the form of a website, ClinicPriceCheck.com. It pulls pricing data from publicly-available hospital pricing indices, known as "chargemasters", as well as information from government agencies, and self-reported patients' bills.

“We take all that data, and we collate it using advanced analytics or basically machine learning matching algorithms, to put this data into a nice consumer-friendly format, so it’s easy for you to use and compare,” Rodrigues-Craig said.

After completing a free registration process, Clinic Price Check users can search and compare prices at hospitals across California.

"The lowest prices that you can pay for health care are extremely low," Rodrigues-Craig said. "If you shop around, it's possible that you can get a much better rate than what your insurer is offering you, especially if you consider paying cash."

Paying Cash vs. Using Insurance

Can you really just sidestep your health insurance, if you find a lower price? The California Department of Managed Health Care tells us: yes, you can.

Lisa Berry Blackstock, a private patient advocate, says many of her clients have saved hundreds or even thousands of dollars by paying cash, even when they have insurance.

"In my experience, it happens a lot," Berry Blackstock said.

As a patient advocate, Berry Blackstock helps her clients navigate and negotiate billing disputes. She recommends anyone scheduling medical care should check to see if there is a cash price -- particularly if they have a high-deductible health insurance plan.

Berry Blackstock says all you need to do is ask at the hospital.

"Who may I speak with that I can explore my cash payment options with?" she said. "They'll know exactly what you're talking about. They will not deny it. They won't discourage it."

Paying cash could be especially helpful to patients with high-deductible insurance plans. About 43 percent of American families are covered by these plans, according to the U.S. Centers for Disease Control and Prevention. Such plans require enrollees to pick up thousands of dollars in medical costs before their insurance kicks in.

California state law requires hospitals to give patients a "good faith estimate" of what a procedure or treatment will cost, upon request. Some hospitals even have price estimate calculators on their websites. We used one to compare several procedures at a large Bay Area hospital gorup. We eventually found cash prices that average around 10 percent less than the patient deductible with insurance.

The Risks of Paying Cash

Choosing to opt out of your insurance and paying cash instead might save you more in the short run, but it doesn't always make sense. For example, the California Department of Managed Health Care says cash payers "may not receive the same consumer protections offered by their health plan." Those protections include a ban on balance-billing by an out-of-network provider at the hospital.

It's also important to remember that if you bypass your health insurance, you won't be chipping away at your annual deductible, which could come back to bite you later. So, paying cash could help patients with a high-deductible plan, but won't necessarily be useful to families with a low deductible or out-of-pocket maximum.

Everyone we spoke with for this story also emphasized the importance of doing research before you have a procedure done. That includes talking with the hospital and your insurance provider well in advance, to make sure any pricing you found online is still accurate.

Rodrigues-Craig admits her website isn't perfect, and it allows users to up- or down-vote listed prices if they don't match what patients have been billed. Clinic Price Check also includes a disclaimer that states it "...cannot guarantee the accuracy of these prices."

Still, Rodrigues-Craig says she's working to improve the database, and she hopes efforts like Clinic Price Check drive changes in medical billing.

"I want to get rid of price discrimination," she said. "I want everybody to be able to pay the same rates."