It took me two nights of bathtub reading to get through the 26,000 words of Steven Brill's masterful cover story in TIME magazine: "Why Medical Bills are Killing Us." It was time with TIME well spent.
Do it. If you haven't already. Read the story. You'll never look upon the health care system in the same way again. Most likely in this way:
If you aren't already convinced that hospitals (both non-profit and for-profit), drug companies, and medical device manufacturers aren't dedicated to screwing over the American public, Brill's expose will make you scream: You bastards!
If you were already convinced, as I was, that scream will be just as loud: I knew they were bastards!
Aaron Carroll, a physician who speaks the truth about our horribly inefficient and ineffective health care policies, correctly points out that little or nothing Brill wrote about is new news. Read his "You mean its the prices, stupid?"
So I finally got around to reading Steven Brill’s piece in Time this weekend. Yeah it took me a while, but man – why so long? I have a number of thoughts on it, although I’ll be very disappointed in you long-time readers if you found much of it surprising.
First of all, IT’S THE PRICES, STUPID! Is this really news to anyone (each of those words is a different link, BTW)? Seriously? Not to beat a dead horse, but it’s one of the ways Switzerland keeps its costs under more control. As Sarah Kliff points out, other countries do this, too. Have you guys really not read or heard us talk about Maryland? Yes, it’s the prices. They are super, super high in the United States. Everything costs more here. Granted, the sensational nature of the piece carries far more weight, but I’m shocked at how many of my Twitter followers got the vapors after reading it.
The Sarah Kliff piece in the Washington Post referred to by Carroll provides a good overview of the TIME story in many fewer words. In fact, she does it in one sentence:
Steven Brill started his cover story in this week’s Time magazine with a simple health-policy question: “Why exactly are the bills so high?”
His article is essentially a 26,000-word answer, the longest story that the magazine has ever run by a single author. It’s worth reading in full, but if you’re looking for a quick summary, the article seemed to me to boil down to one sentence: The American health-care system does not use rate-setting.
We should. Medicare is the only aspect of our health care system which comes out looking really good in Brill's story. I can hardly wait to ditch Blue Cross/Blue Shield and jump into Medicare when I turn 65 this year.
There's no rhyme or reason to the charges you see on your hospital bill. Doctor bills maybe make a little more sense. But not a whole lot. Brill's many real life examples make clear that there is very little relation between what a patient is charged, and what the actual cost of the service is.
Medicare, though, carefully calculates what it actually costs to provide a medical service. Then it makes payments based on those costs. This isn't exactly rate setting. But it's a heck of lot better than what goes on outside of Medicare and Medicaid in the private insurance and no insurance sides of health care.
The people who get screwed the most are the ones who can least afford it: those who pay out of pocket. They're at the mercy of the Evil Chargemaster described in horrendous detail by brill.
The chargemaster, I learned, is every hospital's internal price list. Decades ago it was a document the size of a phone book; now it's a massive computer file, thousands of items long, maintained by every hospital.
...No hospital’s chargemaster prices are consistent with those of any other hospital, nor do they seem to be based on anything objective — like cost — that any hospital executive I spoke with was able to explain. “They were set in cement a long time ago and just keep going up almost automatically,” says one hospital chief financial officer with a shrug.
Health insurance companies get a discount from the chargemaster prices. My wife and I have noted this on our medical bills, even though they're not from a hospital. Even when we haven't met our deductible, we get a discounted price because we have Blue Cross insurance.
People who pay out of pocket because they lack insurance thus are the only ones who get billed the full chargemaster price. That's obscene. Especially when hospital, insurance, drug company, and other health care executives are making millions of dollars a year.
Our system is terribly messed up compared to how health care is provided in other countries. Brill makes that crystal clear.
Taken as a whole, these powerful institutions and the bills they churn out dominate the nation’s economy and put demands on taxpayers to a degree unequaled anywhere else on earth. In the U.S., people spend almost 20% of the gross domestic product on health care, compared with about half that in most developed countries. Yet in every measurable way, the results our health care system produces are no better and often worse than the outcomes in those countries.
According to one of a series of exhaustive studies done by the McKinsey & Co. consulting firm, we spend more on health care than the next 10 biggest spenders combined: Japan, Germany, France, China, the U.K., Italy, Canada, Brazil, Spain and Australia. We may be shocked at the $60 billion price tag for cleaning up after Hurricane Sandy.
We spent almost that much last week on health care. We spend more every year on artificial knees and hips than what Hollywood collects at the box office. We spend two or three times that much on durable medical devices like canes and wheelchairs, in part because a heavily lobbied Congress forces Medicare to pay 25% to 75% more for this equipment than it would cost at Walmart.
The Bureau of Labor Statistics projects that 10 of the 20 occupations that will grow the fastest in the U.S. by 2020 are related to health care. America’s largest city may be commonly thought of as the world’s financial-services capital, but of New York’s 18 largest private employers, eight are hospitals and four are banks.
Employing all those people in the cause of curing the sick is, of course, not anything to be ashamed of. But the drag on our overall economy that comes with taxpayers, employers and consumers spending so much more than is spent in any other country for the same product is unsustainable. Health care is eating away at our economy and our treasury.
The health care industry seems to have the will and the means to keep it that way. According to the Center for Responsive Politics, the pharmaceutical and health-care-product industries, combined with organizations representing doctors, hospitals, nursing homes, health services and HMOs, have spent $5.36 billion since 1998 on lobbying in Washington.
That dwarfs the $1.53 billion spent by the defense and aerospace industries and the $1.3 billion spent by oil and gas interests over the same period. That’s right: the health-care-industrial complex spends more than three times what the military-industrial complex spends in Washington.
Brill's analysis re-convinced me of something I already was convinced of: any efforts by politicians of the Republican variety to reduce government health care spending by cutting benefits, or increasing premiums, makes no sense.
It isn't patients who are the problem. The problem is crazily irrational exorbitant charges for services people in other countries pay much less for. Medicare is administered in a highly efficient fashion, much more so than private insurance companies.
Even so, Medicare is constrained by the health care-industrial complex lobbyists mentioned by Brill. For example, Medicare should be allowed to negotiate down the cost of prescription drugs.
The most atrocious Republican idea is to make a bad situation worse by putting even more emphasis on an unfettered free market in health care. We already have the highest medical costs of any industrialized country, with lower than average health outcomes.
Regulation in the form of "Medicare For All" is the best way of bringing costs down and positive outcomes up. For some reason Brill doesn't go quite that far in his list of policy recommendations, but he should have.
Another way to get the gist of Brill's story is to watch a 13 minutes Wonkblog discussion between Ezra Klein and Sarah Kliff. I didn't watch the whole thing, but what I did see, I liked.