Health Care Costs And How You Could Be Overspending

Six Ways You're Overspending On Health Care

There's no way around it: Health care costs a fortune.

Insurance premiums, drug prices, the cost of doctor visits and hospital bills are getting bigger. Last year, Americans spent $2.6 trillion on health care, or $8,402 per person. Though it often seems we have no control over these costs, there are some things that can stanch the bleeding. Some common ways we overspend on health care:

Buying the wrong health insurance plan

Picking a health insurance plan just because it has the lowest monthly premium or the smallest annual deductible isn't always best. What matters is total "out-of-pocket" expense. That means the maximum amount of the deductible -- the number you must reach before benefits kick in -- plus, total co-payments in a year, says Carrie McClean, a licensed insurance agent and head of customer service at eHealthInsurance.com.

So don't be fooled by a program with low monthly costs and a high deductible -- particularly if you know you have a major health expense (say pregnancy) on the horizon.

Of course, insurance shoppers should buy the benefits they really need, says McClean. If you know you have health conditions, make sure they're covered and don't buy benefits you won't use. To get an idea of how much coverage you need, tally up medical expenses from last year and estimate needs for the coming year. Some insurance companies and employers provide online "cost calculators" that might help.

Buying drugs you don't need

“Oftentimes, Americans think that more is better," says Jeffrey Cain, chairman of the Department of Family Medicine at Children's Hospital Colorado and president-elect of the American Academy of Family Physicians. But in health care, what's important is the right care, he says. An antibiotic for the sniffles? Elective surgery for back pain? If your doctor says you don't need it, maybe you should listen. If your doctor says you do, think about getting a second opinion.

“You end up literally flushing your money from that prescription down the toilet because antibiotics don’t cure the common cold,” Cain says. Sometimes, doing nothing is better. “People want treatment for stuff that’s going to go away by itself," according to the New America Foundation's Shannon Brownlee, the author of Overtreated: Why Too Much Medicine is Making Us Sicker and Poorer.

And before you go ahead with surgery when it's not an emergency, find alternatives. They could be cheaper and less dangerous than going under the knife, says Brownlee.

Buying the same over-the-counter drug twice

If you have one bottle of pills for headaches, another for back pain, and another for migraines, read the labels: They might have the exact same active ingredients. For marketing reasons and because of some U.S. Food and Drug Administraton rules, drug makers will package the same medicine in different ways. Not only can this lead people to buy the identical product more than once -- the cough and cold version and the allergies version, for instance -- they can take too much medicine without realizing it, says Maria Mantione, a pharmacist and a professor at St. John's University in New York.

Using brand-name drugs

Switching to generic drugs can mean major savings. Yet some people refuse to stoop to store labels. Generic drugs aren't the equivalent of store-brand macaroni and cheese. The actual medicines are chemically identical.

"I personally never, ever purchase a brand-name over-the-counter product," says Mantione.

Patients should also consider a similar medicine that's available as a generic, Mantione says. Brand-name Crestor costs more than generic Lipitor, for example, but the medicines work the same for some patients, she says.

Skipping your check-ups

Most of us started missing annual checkups once we outgrew the pediatrician, but that's a mistake. Annual physicals and routine screenings can help patients find out early that they're at risk for a serious illness like heart disease and diabetes before they get sick.

"There’s no doubt that preventative care ultimately saves money and saves harm," says Christoper Moriates, a senior resident in internal medicine at the University of California, San Francisco. Simple things like getting flu vaccinations and having your blood pressure checked can make a big difference, he says.

Getting medical tests you don't need

Not every situation calls for high-tech medical tests. “I have definitely had experiences where I’ve had to explain to my healthy, 40-year-old, muscular patient that he does not need a stress test for his heart," Moriates says. MRIs and the like are costly, scans that use X-rays expose patients to radiation, and tests can even produce "false positive" results that lead to treatments for ailments people don't even have, he says. “People that are healthy and without symptoms don’t need some tests," Cain says.

X-rays and other medical-imaging tests "also pack a wallop" from radiation, Brownlee says.

Not taking care of yourself

This one seems obvious, but it bears repeating. Obesity, tobacco use, and alcohol abuse all lead to chronic, costly health problems. “The biggest way I see my patients wasting their health dollar is they’re buying cigarettes,” Cain says.

Junk food and unhealthy habits like tobacco and booze cost money to purchase and even more down the road if they damage the body. Be honest with your doctor about your medical history and habits, he says. “Patients who are spending their money most wisely are very involved in their care," he says.

CORRECTION: An earlier version of this story inncorrectly indicated that MRIs expose patients to radiation.

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