The business office of our local hospital volunteered that they offer a 20% cash discount for MRIs. (I did not ask, but I imagine it is available for other procedures, too.) The cash discount doesn’t surprise me. The 20% certainly does, though.
Simply stated, if one pays for an MRI at the time the work is done it costs 20% less than if one pays it out over time. That’s really nice. A 20% cash discount is a big discount. You won’t get that large a discount from many businesses.
In fact, from a management perspective 20% is a huge discount! (I know these financial matters are an odd topic for a blog written for MS caregivers. Follow me a bit, though, and I’ll come back to an important tip for MS caregivers. A good book for those who would like information about the financial formulas used to calculate a cash back discount is, “Working Capital Management: Strategies and Techniques”.)
Cash discounts are usually offered for one of three reasons; to attract customers away from other businesses (not an issue in our small town where the local hospital holds a monopoly on many services), to save a few dollars (if the cash discount is less than the amount paid to a financing firm), or to help a hurting cash flow problem. In any of these cases, 20% is a huge discount. That amount does not make financial sense when viewed from a classic cash management perspective, but … I don’t know about the hospital’s business. It must make sense to management if they’re doing it.
Like me, you may not have considered asking for a cash discount for medical services. I was surprised, but now realize I shouldn’t have been. Healthcare is a business like any other.
Caregiver Tip: Medicine seems to become more and more like any commodity business as time passes. Therefore, it makes good sense to ask for a cash discount whenever you purchase medical services. The worst that can happen is that you may be told, “I’m sorry, we don’t.”
However, if they do, you can save a good bit of money … especially at my local hospital.