Frugality

One of the ideas behind the spread of health-saving accounts combined with high-deductible insurance is that it will make consumers more aware of what health care actually costs and they will make more responsible choices.  One problem is that it can be very difficult to compare the costs of different health-care providers.

I don’t have an HSA but I do have high-deductible health insurance.  This works fine for me since I rarely go to a doctor.  A couple of years ago when I needed to go to a doctor though I wanted to find the one that charged the least for an office visit since I knew all the expense would come out of my pocket.  Trying to find out the price of an office visit wasn’t easy.  Most would just answer “it depends”.  I finally went to an urgent care facility that wasn’t cheap but much less expensive than an emergency room visit and probably comparable to a doctor’s office visit.  If there was any premium over an office visit the ability to come in without an appointment made up for that.  I told them up front that I would be paying out of pocket and I’d like to keep the cost down.  The price for an office visit was fixed but they did hold off on ordering a lab that I probably wouldn’t need(and I didn’t) which saved me a little money.

It is somewhat easier to comparison shop today.  There is a website Nahdo.org that will let you search cost data by state.  Knowing what the average cost for a procedure in your region is makes it easier to haggle.  It still will probably require a lot of phone calls though.

It would be cheaper for me to make an office visit today also.  I can get one for free at my school.  If I wasn’t in school the proliferation Minute-clinics and their similar competitors makes it cheaper and easier to go in for a simple office visit.  If you need something more involved though you can save considerable money through haggling.  Of course, you don’t want price to be the only concern when it comes to health care.

It is often debated as to where is the cheapest place to buy groceries. I decided to do a price comparison of 10 common grocery items.

The results came out as I expected with Aldi being cheapest then Wal-Mart and the supermarket last. I used the cheapest store brand where applicable for the comparison. I probably should have used a different item than the chicken breast since it skewed the results somewhat.  Since Aldi was cheaper on most products though I think the results are a fair price comparison. The supermarket was cheaper on some products and they offer double coupons. If you used coupons strategically you could probably get the supermarket cost to about the same as the others. As a single person it is easiest for me just to do the bulk of my shopping at Aldi.

In the summer of 1997 I had a plan to travel to Guatemala and teach English.  Between the time I booked my flight and my departure date I did an extremely poor job of managing my money and only had $450 left.  It probably would have been smarter to change the flight date but I just decided that somehow I would get by on what I had.

After arriving in Guatemala I had to take a 10 minute,$5 taxi ride and 4 hour,$4 bus ride to get to my destination.  Since my return flight wasn’t for 3 months I knew I needed to find some cheap accomodations.  I had a page with a map and a list of several cheap hotels that I had photocopied out of a travel book.  That night I couldn’t find any of them though and ended up having to get a $20 motel room. That might seem cheap but it was expensive considering how little money I had.

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You do not necessarily get what you pay for.   An earlier post “Cheap Wine is Fine” showed how wine enthusiasts rated wine higher when it had a higher price tag but in a blind taste test they ended up preferring the $5 wine over the $90 wine.  Now there is a similar example in which audiophiles couldn’t tell the difference between music passed through coat hangers from that which passed through pricey Monster cables. The full story is at the Consumerist.   This shows again that quality is often perceived rather than actual.

There probably is a general correlation between higher priced goods and higher quality but you shouldn’t assume that to be true.  Many times even if an item is higher quality it isn’t enough to make it worth the higher price.  Before spending more on an item in order to get higher quality determine if it truly is higher quality and if you actually need the higher quality.