A thought on cost structure incentives

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I find myself in need of a chiropractor, and my insurance covers only part of the cost for this service. I have a $25 co-pay, and (unlike other covered services) pay 20% of the remainder of the bill. That means the cost chart goes like this:

Total cost ($)	I pay ($)	Insurance pays ($)	Ratio (me / ins)
40	28	12	.7/.3
50	30	20	.6/.4
60	32	28	.53/.46
70	34	36	.48/.51
80	36	44	.45/.55
90	38	52	.42/.58
100	40	60	.4/.6

The point at which I perceive my insurance is bearing a fair share of the cost of treatment is not the lowest number on the chart. It's right around the 50/50 cost split, at $70/office visit. This is clearly not an incentive for me to seek the lowest-cost treatment. I could, if I wished, pay an extra $6-12 in order to stick the insurance company with an additional expense of $24-48. If I thought that this were an iterated prisoner's dilemma situation, where a defector who has been punished might actually change their behavior next round, I would select an expensive chiropractor in order to make the point. Sadly, this isn't, and I don't.

So what will I do? I'll most likely ignore cost and settle on the doctor I feel most comfortable with. And thumb my nose at the bureaucrats.


ETA: Talking with zeightyfiv, I also realized that if the insurance had decided to pay only a flat 30% of the cost of chiropractic care, I would perceive it as significantly more fair than the chart above, even though it would be financially disadvantageous for me. This probably indicates that if I have to reconstruct a formula to figure out how my benefits work, it's going to smell fishy regardless.