Coming up with “A Bitter Pill”

March 5, 2013

For the past 10 days I’ve been interviewed on various television and radio shows about the article I wrote for the March 4 issue of Time, called “A Bitter Pill.”  It’s all about how exorbitant prices and profits are at the core of the crisis America uniquely faces when it comes to financing healthcare, the cost of which now accounts for roughly a fifth of our gross domestic product. The article took a new approach to reporting on an overreported issue by avoiding “on the one hand, on the other hand” policy analysis. Instead, I took actual medical bills and dissected them line by line.

Invariably a question has come up in these interviews about how I thought of that approach. So, since this is supposed to be a column about good story ideas, I think I’ll use it to explain the genesis of “A Bitter Pill” in more detail than I’ve been able to on the talk show circuit.

I always tell the students in a journalism seminar I teach at Yale that the best stories come from what you’re most curious about. Because I’m interested in business (as well as legal and political issues), questions about business and money often are what make me most curious, sometimes to the point of idiosyncrasy. For example, when I read last week that Jeff Zeleny, a star political reporter for the New York Times, had been hired away by ABC News, one of my first thoughts was that I’d like to see a story detailing how much more money he’ll be making – I bet it’s as much as twice his Times salary – and perhaps analyzing whether for Zeleny and other journalists his move represented a wrenching market misallocation of talent, given that his work is likely to have more impact, not to mention space, in the Times than on network television.

Similarly, during the long debate over President Barack Obama’s health insurance reform proposals, a question kept nagging at me: Everyone on all sides seemed to accept as a given that healthcare was wildly expensive, and the only debate seemed to be over who should pay for it. I wondered: Well, why is it so expensive in the first place?

At about the same time, a relative suffered a series of medical crises that produced hundreds of thousands of dollars in bills. For him, it was no problem because he had Medicare and terrific insurance to supplement what Medicare didn’t cover, leaving him on the hook for just a few hundred dollars. But again, I wondered, why were the bills so high?

What finally got me to act on that curiosity and turn it into a reporting project was a chance event, which I recounted in the Time article as follows:

I got the idea for this article when I was visiting Rice University last year. As I was leaving the campus, which is just outside the central business district of Houston, I noticed a group of glass skyscrapers about a mile away lighting up the evening sky. The scene looked like Dubai. I was looking at the Texas Medical Center, a nearly 1,300-acre, 280-building complex of hospitals and related medical facilities, of which MD Anderson [Cancer Center] is the lead brand name. Medicine had obviously become a huge business. (In fact, of Houston’s top 10 employers, five are hospitals, including MD Anderson with 19,000 employees; three, led by ExxonMobil with 14,000 employees, are energy companies.) How did that happen, I wondered. Where’s all that money coming from? And where is it going?

I had no idea what the answers were. But it seemed obvious that there was only one way to find out: If you want to know why something is so expensive, figure out every element of its costs. In other words, follow the money.

Perhaps doctors were overcharging and making out like bandits while the rest of us suffered. Maybe the unions representing nurses and other hospital workers were so strong that they were driving sky-high prices at hospitals, which I had always thought of as benevolent, non-profit pillars of our communities. This was something I was particularly inclined to suspect because I’d recently written a book about how the teachers’ unions had made public education so cost-inefficient.

Maybe the reason drugs cost so much was because the process of inventing them is such a crapshoot that research and development expenses really do, as the pharmaceutical companies argue, justify the price tag for the drugs that end up on the market.

Perhaps inflated insurance company profits were the culprit.

Maybe it was all of these factors. Or could it be some combination of them, plus the fact that American healthcare is so much more meticulous and effective that the high cost is simply the product of caring for the sick better than any other country does?

The truth is, I had no idea. But I thought I could find out if I could dissect a bunch of bills, then trace the money back to who got paid what and look at who was making what levels of profit or sustaining what levels of losses.

As those who have read the article or heard about it now know, I found that all my initial suspicions were wrong. By following the money, I discovered that our healthcare prices are out of whack for a reason that was hiding in plain sight — a reason that should be obvious to anyone who has ever been a healthcare consumer, which means all of us: There is no such thing as a free market in healthcare, if one defines a free market as a place where there is some balance of power between the buyer and the seller. Instead, healthcare is – except when Medicare is the buyer – a lopsided seller’s market. That became clear at both ends of the money trails I followed – from the patients’ lack of any knowledge of what they were buying or its prices, much less any leverage to bargain over it, to the sellers’ ability and willingness to charge absurdly high prices on everything from gauze pads to ambulance services to cancer wonder drugs.

To take one example, when I decoded a line in one bill to find that $1.50 was being charged for a generic version of Tylenol, while Amazon sells bottles of 100 for $1.49, the explanation offered by the MD Anderson Cancer Center was that the profit on the pill helped defray the costs of all the other care involved in housing and treating the patient. That seemed logical enough until I found another line item for $1,791 just for each night of the patient’s stay, along with dozens of other ridiculously high charges for everything from blood tests to cotton swabs. But the best evidence ‑ what allowed for a final verdict ‑ was found at the bottom line, in the financial report the hospital has to file with the government every year. The revered nonprofit Houston cancer center had an operating profit of $531 million – an astounding 26 percent margin. That certainly meant they could have thrown in the Tylenol with the $1,791 room charge.

When I followed the money trail behind the drugs, medical devices or CT scan equipment that the patients or their insurance companies were billed for, the profit margins for the hospitals that supplied them, as high as they were, were eclipsed by the margins of the manufacturers that sold them to the hospitals. In the case of the drug companies, their research and development costs, it turned out when their securities filings were examined, were not nearly high enough to justify prices whose only real justification seemed to be that in the United States, unlike other developed countries that control drug prices, they can charge whatever they want because their patents give them a legal monopoly.

In other words, everyone along the supply chain – from hospital administrators (who enjoy multimillion-dollar salaries) to the salesmen, executives and shareholders of drug and equipment makers ‑ was reaping a bonanza. The only exceptions, I found, were those actually treating the patients ‑ the nurses and doctors (unless the doctors were gaming the system by reaping consulting fees from drug or device makers or setting up diagnostic clinics in their practices in order to steer patients there for expensive tests).

It really mattered that I was so curious about all this, and that I became almost obsessively curious as I began to discover what was behind these bills. For there was a mountain of grunt work involved in following the money line by line, from the patient, to the doctor’s office or the clinic or the hospital, and then back to supplier.

That brings to mind another lesson I push on my students, which, because they are a bunch of smart Yalies, sometimes rubs them the wrong way: In journalism, hard work is a lot more important than a high IQ.


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If you think it’s expensive now, just wait until it’s free.

Posted by 7825gmetnb | Report as abusive

Funny, 7825, my Canadian and Swiss friends can’t understand why Americans cling to such an exploitative system for something as important as healthcare. And I remember an American saying something like, “we’re all just one (serious) illness away from bankruptcy.”

Now, that’s expensive….

Posted by SunAndRain | Report as abusive

Until one removes the third party payor (be it government, an employer, or insurance company) the beneficiary has little invested.

If we converted every citizen to an HSA, where they pay their premiums and deductibles with their own dollars (regardless of the source), you would see medical costs decline dramatically–much as we have experienced in elective procedures (e.g.lasik and cosmetic surgery.) There is little motivation for the health delivery system to be efficient under the existing structure.

To do so, however, also requires that we modify out tort laws, so that providers are not motivated to prescribe additional tests and services solely to protect themselves from litigation.

Posted by COindependent | Report as abusive

Funny, 7825, but my Swiss and Canadian friends agree with Steven Brill, that unbridled capitalism is what makes healthcare truly expensive. They think we’re mighty stupid to handle this the way we do.

What is it going to take for Americans to change this? Health costs here reach X height and then they’ll demand change? Or does every single one of us have to have a loved one perish from something so expensive to treat that it is life-wrecking and family-wrecking, before we see the error of our ways?

Posted by SunAndRain | Report as abusive

Excellent artice.

Andy Grove, the builder of Intel, and its former chairman, wrote a few months ago in Wired Magazine, that of all the industries in America, only one, medicine, was allowed to operate without transparent pricing.

Grove’s business, manufacturing computer processing chips, is highly complex, with hundreds of thousands of different products, parts and services, such as programming, changing quickly.

Yet, one can readily get price quotes and pricing lists, even for complex, unusual services. Anybody that can’t publish prices in that industry can’t stay in business. And that’s the same in any business.

But in medicine, he said, the players go to great lengths to make sure nobody publishes any prices.

As an example he chose the appendectomy, one of the most common medical procedures performed on humans. Grove attempted to get price quotes for a common appendectomy from hospitals across America. He was flabbergasted to find that zero hospitals would publish their prices.

But worse, many of the new laws being written actually forbid medical companies from publishing prices.

Grove’s conclusion: To reduce medical costs, America needs only one law: Price transparency.

Your article is well timed, and much needed. Thanks.

Posted by AdamSmith | Report as abusive

Finally, someone talks about the real healthcare problem: that it costs too much. The other piece of it is that healthcare isn’t about making people well, it’s about treating their disease. There’s a big difference, the difference between profit and loss for the drug companies, hospitals and the whole industry that has been profitable for the last three decades.

Posted by thinkb4its2late | Report as abusive

“Bitter Pill” is great journalism. The structure of the U.S. health care industry (concentration from hospital consolidation, vertical integration of providers, and barriers to entry at the local level) have made the health care market unresponsive to demand. We have laws in place to curb the sorts of excesses that this causes. We can only hope that antitrust provisions can be applied to make this market rational before health care in America sucks the blood out of our economy and the patient can never recover.

Posted by CharleneKing | Report as abusive

I’ve been saying this for years and no one has listened . THANK YOU for this commentary.
The health industry is simply NOT a free market. When your life/well being is on the line you have to pay whatever is charged. There is no give and take like in a free market. And the sellers know it. Do they ever.
Why are we ranked around 40th in the world in lief span, deaths in childbirth, overall care, etc? Yet, we pay 2X the cost per person of the next highest country (Canada.) And more than 3X the cost of any other country. Socialized/regulated systems cost far less and provide far better health care. These are the facts. They may not fit the belief system of some, but they are the facts.
You cannot have a free market in a system where the buyer has to pay whatever is charged. so forget about that and bring in a system (like every other industrialized country has) that works.
Why oh why is this not obvious to everyone?

Posted by Bob108 | Report as abusive

Wonderful, wonderful article.
“Everyone on all sides seemed to accept as a given that healthcare was wildly expensive, and the only debate seemed to be over who should pay for it. I wondered: Well, why is it so expensive in the first place?”

It seems “reform” in this country seems to amount to buying off everybody involved (pharmaceutical companies, insurance companies, doctors, medical device manufacturers, ad infinitum) except the taxpayers and patients.

I would hope that at some point there is a rule that any entity that takes medicare has to post the price, and the non-medicare walk in price. I think just being able to compare prices for MRI’s, blood draws, etcetera would do wonders for health cost containment….

Posted by fresnodan | Report as abusive

I too was puzzled that the conversation about “obamacare” seemed to pay little attention to the absurdly high costs. How can a catscan cost $5,000 or more when you can buy one of those machines for (starting price) 100,000? How can someone charge 1,000 to put two stitches in my forehead? The author is 100% correct that the US medical market is totally a sellers market in which the customers have no knowledge of or control over pricing. A complete failure of the so called “free” market. Bring on government moderated health care. How could things possibly become more expensive?

Posted by Roger23 | Report as abusive

Bravo, Professor Brill! Well done!!

Posted by Rock475 | Report as abusive

Funny, 7825, but my Swiss and Canadian friends don’t think it’s expensive. On the contrary, they think Americans are crazy for allowing something as vital as healthcare to be left unprotected against unbridled capitalism. And it was an American I heard say, “Most of us are just one health disaster away from bankruptcy.”

Posted by SunAndRain | Report as abusive

The good professor has missed one important factor in all of this, the high cost of malpractice insurance. A friend of ours is a baby doctor his malpractice insurance is 9,000 a month. Every device maker, hospital, nurse, drug manufacture must build in this cost to every service they provide. Until tort reform in on the table the cost of health care is going to rise

Posted by dridge | Report as abusive

Having been diabetic for almost 40 years, I knew spreading the costs of healthcare via BarryCare was a complete waste of time and will only add to the costs. There will never be cures for a lot of illness, there’s just too much $$ to be made by the pharmas, device makers, insurance companies, and doctors/specialists. The only “grunts” in the medical industry are the techs, nurses, and administrators at each office.

Posted by wthcares | Report as abusive

The insurance companies and patients who can pay, pay for the people who can’t pay. That is the the problem. If there was an alternate method to bill the govt for those who can’t pay, all the costs could come down because a patient would be paying for the actual services he received. For this problem, blame the government who dictates the rules to insurers and medical suppliers and are responsible for the overhead for that 1.50 tylenol-generic. Govt regulations add billions to the cost of medicine.

Posted by jschmidt2 | Report as abusive

One of the major problems with the Affordable Care Act, sold as a reform of our healthcare system, is that it doesn’t actually reform ANY of the problems touched on by this author.

Instead, it basically just forcibly expands the customer base of these same providers/manufacturers, under threat of a tax penalty for failure to enroll.

This is not the first article I’ve read that has attributed the nightmarish costs associated with our healthcare to lack of competition and lack of transparency. When the government enacts programs which in reality only force employers and individuals to enroll in the EXISTING system, they have only served to strengthen the systemic problems we are facing.

Posted by Yashmak | Report as abusive

Thank you Mr. Brill.

It is not the least surprising to me that free enterprise and the capitalist system are the cause of our extremely high medical costs. As you have agreed, health corporations have us over the barrel. Each one of us is very easy pickings. What is a good corporation to do?

The only possibility to keep costs down is to face the corporations collectively. That is, their size against our group size. Obviously it works well for Medicare, and for single pay systems throughout the world.

But, the bottom line on high health care costs in America: American gullibility. Americans believe free enterprise is best, no matter what the cost. No matter if the health corporations get to shake you down for your life. Good going Madison Avenue! Good going advertisers of America!

Thank you again Mr. Brill. Now, if we could just get Americans to open their eyes.

While we are at it, we could think about all the other ridiculous expenses foisted on the 99%: war budget equal to rest of the world put together; heaping on that, wars without end; bailouts for banks; billion dollar bonuses for 10 CEOs; bought out government; for starts. There seems to be no natural limits to the avariciousness of the corporations and the gullibility of the people.

Posted by xcanada2 | Report as abusive

Medicare and medicaid could just pay less for everything. Problem is now solved. Oh wait the government is just too corrupt for that to happen.

Posted by M.C.McBride | Report as abusive

The author mentions that he always thought that hospitals, etc., were “benevolent” providers. That cracked me up. Since when is a for-profit hospital in the U.S. benevolent? (And he teaches WHERE?) But I agree with his assessments.

Doctors, if their fear of lawsuits is to be taken seriously, guide us to expensive tests. Have any of you had a doctor tell you they need to order more tests because they’re afraid you’ll sue them if they don’t? I haven’t. I’ve only been told they need to “rule out” a more serious and sinister problem. Not once have I had a more serious problem.

If a doctor pays $9.000.00 a month for insurance, that’s only 108K a year. My income is considerably lower (emphasis on “considerably”) and I would have to pay over $1,000 a month for routine insurance coverage for myself. I’m not feeling particularly sorry for them, so spare me the “It costs a lot to be a doctor” argument.

We’re sent to a specialist for pimples, cancer, feet, lungs, legs, veins, ears, noses, throats, pain, bones, sports injuries, blood, penises, vaginas, joints, teeth, brain surgeons (I’m actually okay with that one)… . Pick a body part or illness and there’s a specialty for it. And they all order more tests, and they charge more because they’re specialists.

An MRI machine that cost $2 million 10 years ago is still charging patients $1500.00 a pop to pay for the cost of the machine plus the tech to run it. It only takes 1,333.33 patients to pay for the machine itself. They can image that many patients in a month (66.65 patients a week). They also wrote the cost of the machine off as a capital expense, as well as the salary and insurance bennies of the tech.

And for those who think Obamacare will only contribute to the systemic problems in our healthcare industry, get back to us when you suffer a compound fracture and need a pin put in your bone, and you don’t have health insurance. You’ll be cryin’ for your mommas, and relieved to sign up for the evil socialist’s healthcare plan.

We’re being hosed, fleeced, rolled, mugged, and swindled, and told that we should shut-up and be grateful. The reason we don’t care about costs is because we don’t have to. Yet. But it’s not far away.

Posted by JL4 | Report as abusive

You cannot have a free market that functions for the consumer when the consumer does not have the ability to judge the quality of what he is getting. At best you can a regulated market that protects the consumer from great harm but at cost.

In addition there is no drive to get more competition into health care. First you have create doctors and nurses (free medical school for students that can show on standard tests they are becoming doctors and for schools that accept the program as payment of all fees not just rob the student of it to get higher salaries). Then how about encouraging more independent hospitals and trust busting firms owning most of the hospitals in an area. Since the government is paying for Medicare et. al what purpose is the insurance companies other than either rob the government or the consumer.

Posted by SamuelReich | Report as abusive

@COindependent, forcing individuals to use HSA’s and pay for their healthcare using before tax dollars is in no way a fix for the problem that Brill identifies here.

Unless pricing by all entities in the chain of health care provision is not only transparent, but able to be chosen in a free and fair marketplace, it will make no difference if consumers have HSA’s.

Consumers buying health services individually have zero buying power. Only when they get together in a buying bloc (as they do in Medicare, or through an insurance plan) can they effectively bargain with health care providers.

Posted by lauradeen | Report as abusive

Thanks for doing this research, which confirms what I have believed for about five years. In 2008, I wrote:

I believe there are three factors which insulate health care from normal market forces and account for why costs in the health-care sector are out of control:
a. the total price of the services provided is usually hidden from the consumer (the patient) until after the services are rendered, making bargaining or comparison shopping impossible;
b. patients are often in a state of duress (or incapacity) when they purchase health care services and cannot make rational judgments regarding cost;
c. when the services are covered by health insurance, the patient has no motivation to control cost in any event.
Legislation requiring full disclosure of pricing might help counteract the first of these factors. However, the second and third factors listed above suggest that the market is inoperative and that some governmental regulation or intervention is justified.
[end of quote]

The provider monopoly you speak of could, of course, be counteracted by the monopsony of a single-payer health care system.

Posted by samBerry | Report as abusive

Great article sir, perhaps if enough cries such as this arise from the wilderness we might actually get a little healthcare and tort reform.

Follow the money and therein will lie the truth.

Posted by CaptnCrunch | Report as abusive

Brill’s article should be awake up call to all of us. The costs of our mediocre medical care are unsustainable and unjustified and millions are excluded. We are not getting “the best medical care in the world” as the politicians opposed to reform like to say, unless you are rich or very well insured. There is an obvious solution in front of us “Medicare for All”. Medicare, with needed reforms, could serve all Americans in a cost-effective and humane manner. The ACA will offer “coverage” to some of the excluded but will not do enough to lower costs or correct many of the faults in the system. The exclusion of a single-payer option from the ACA was a sop to the insurance companies but omitted an element that might have taken us closer to comprehensive reform.

Posted by wmfogartyjr | Report as abusive

We likewise do not have a free market in medical insurance. My book “Health Democracy” describes collusion between legislators, regulators and insurers to monopolize the industry, keeping genuinely nonprofit grassroots co-ops out of the game.

The book also explains how to start such co-ops, based on author’s experience.

Posted by metroeco | Report as abusive

“If you think it’s expensive now, just wait until it’s free.”

Sorry to say Americans but its people like this that are holding you back from modernizing.

Posted by JesterJT | Report as abusive

So you’re the guy who wrote this article, Mr. Brill. I’ve read your op-eds before and recently saw you on The Daily Show, but it didn’t connect. A sincere thank you for your excellent work. Your piece is what real journalism is about. It should earn you a Pulitzer. Maybe it will.

The cost of healthcare in the US is one of our most serious problems, if not THE most serious. The only other issue that should be equal in priority is the influence of lobbyists and their money on our government. I bring this up because until we do something about that, don’t expect much to change in the way of our healthcare costs. It is the reason no one was talking about the exorbitant cost of US healthcare during “negotiations” over Obamacare. There was no reason to broach the topic because no politician is willing to risk their career trying to tackle the REAL problem in US healthcare–the cost. The healthcare industry and their lobbyists have it safely locked up.

If you think the Republicans were intransigent in their opposition to market-based reforms, which Obamacare is, imagine the category 5 storm the Republicans would have created if Obama and the Democrats proposed anything that would have interfered with the massive profit taking by any of the healthcare players. And I don’t want to put this all on the Republicans. Democrats, too, take healthcare donations from sources in the healthcare industry. With 100% of Republicans opposed to any healthcare reform, all that was necessary for the healthcare industry to get their way regarding any reform is to bribe just one or two Democrats, which they did. And if they had to bribe more, they would have. They didn’t have to, thanks to the monolithic position taken by the GOP.

I really don’t blame Obama for not addressing the cost of our healthcare in his reform because he’s smart enough to know that had he done so then no reform would have taken place at all. None. Obamacare barely scratches the surface on what needs to be done to save us from our selves with our excessively high cost of healthcare, but it does address a few things that needed addressing. Unfortunately, it’s like handing someone a snorkel after being chained to an anchor and tossed in the water. We need real reform, but the people running our government won’t allow it because they’re being paid money to keep the status quo and they love their money. Plus, they don’t personally have to worry about the cost of healthcare for themselves or their families. Tax payers pay for that.

In other words, until we get SERIOUS campaign finance reform, we will continue to sink under the weight of our absurdly obese cost of receiving healthcare in the US. That’s the mountain we have to climb, and it’s daunting.

Posted by flashrooster | Report as abusive

It is probably even worse than this article states. These industries collude with governments that will not license a business if it planning to charge less than other licensed companies already operating. So governments bear a huge responsibility for driving health costs higher. It seems that regulators have been bought off and captured by the regulated. So even if they would like to charge $100 for an MRI they have to charge whatever the competition is charging to obtain a license. It is the corrupt system that is driving the costs higher.

Posted by zbrowne | Report as abusive

To SunandRain

1 ) We are not Canada or Switzerland. Canada has the economy and population of JUST California. Switzerland would barely rank in the top TEN states.
To compare us to them you would need each state capable of having it’s own unique and unrelated and un-federally managed healthcare.

2 ) Citing Canada and Switzerland may not be all you think.
Switzerland in December banned minarets. Sorry muslims they dont like your architecture. erland-minaret-ban-violates-rights

And Canada makes the US treatment of Native Americans seem enlightened. Why in June 17 of 2011 they actually had a Supreme Court ruling acknowledging Native Americans are covered under human rights. Nice to know they have been human for only 2 years.  /06/17/human-rights.html
AND they still get Status cards — that is to recognize their status as “Wards of the State”.
A ward of the state is the same in Canada as here. It is someone incapable of managing their own affairs so the government manages it for them.
( Think Down’s Syndrome ).
But in Canada it applies to ALL Native Americans because of their race.  /?id=1058
read the third paragraph
“Status Indians” are wards of the Canadian federal government, a paternalistic legal relationship that illustrates the historical imperial notion that Aboriginal peoples are “children” requiring control and direction to bring them into more “civilized” colonial ways of life”
“They’re injuns … obviously the are mentally incompetent.”
Could you imagine the outcry if the US said Blacks or Latinos were “Wards of the State” due to their race?

So not only are your friends not capable of comparing well as they are at best the equivalent of ONE State … not FIFTY.
BUT they are citizens of some of the most bigoted countries on earth.

Posted by Chromehawk14 | Report as abusive

One major reason for high medical costs within the borders of the USA is that the American Government wants it that way. Other countries do not.

In the USA, we have the exceedingly odd notion that the taxpayer should fund medical education, with Government funded educators in Government funded buildings doing Government funded research, yet we call this system “private”. We require no service in return for this education and no return for the fruits of the research. Other countries are simply not that gullible.

In the USA, we allow private professional organizations to control medical licensure and then are surprised when they protect their own living standards. This is also foolish. For all the money that gushes into our medical system, we should have the best medical system in the industrialized world. Yet, looking at results, we have the worst.

Posted by usagadfly | Report as abusive

From CBC News,Dec 12, 2011:

Wait times to receive medical treatment in Canada are the highest they’ve been in 18 years, according to a new report.
The median wait time is 19 weeks between the referral from a general practitioner and the start of elective treatment, finds the report, released by the Fraser Institute.

Doesn’t sound great to me!

Posted by Shamizar | Report as abusive

This should be a “must read” for all in Congress. No other advanced nation allows this chain of gouging of the public.
Congress tries to make Medicare the goat of runaway medical costs when in fact it provides the only sanity in coping with outrageous billings. We owe a debt of gratitude to this newman, Mr.Brill, for revealing the obscene greed that permeates the medical field, particularly the so-called non-profit hospitals.

Posted by act1 | Report as abusive

Having worked in clinical medicine since 1965, for nearly 40 years. I witnessed changes that contributed to higher costs.
There was the growing influence of distrust between Dr. and Patient. Ambulance chasing lawyers saw a new niche to occupy. Then The chemical industry reduced the costs by inventing plastic syringes, needles, disposable single use everything. Prior to this everything was reusable Stainless steel, and glass. Remember Central Supply, where everything was pressure sterilized using steam?. Blood is no longer stored in glass bottles, but in plastic bags. Plastic is generated by Dupont and others, from crude oil supplies.

The technology from the 40’s to the present drives the ever expanding options for Medical businesses to hold down their bottom lines. Of course they didn’t pass that on to the consumer. They kept it to feed shareholders and keep them happy. Blue Cross/Shield arose to convert investor premiums into a way to make profits by selling ‘protection’ from catastrophic illnesses and the fear of them happening. Don’t forget, such businesses, especially insurance are gambling that you will not have an accident or become ill and you are gambling it will happen. It is a form of fear mongering. The older you get the more the insurance company becomes closer to your belief that illness and death will occur sooner and that is when they increase premiums…, Old Age.

After the 70’s, DRG’s, were force upon Medicine to try to help the government to control the corruption of the kick-back culture. Labs especially, were being hammered for that ‘special’ relationship with Dr.s, groups, and others they needed to build their volume. Even Doctors were/are(?), receiving kickbacks for promoting specified drugs, or the newest contraption(stents), by competing manufacturers.

There are innumerable vehicles for the medical supply industry to supplement the income of Dr.s, and all other consumers of needful supplies.

One of the most drastic consequences of single use supplies is the by magnitude increases of hospital/ medical garbage that must be incinerated and disposed of into the oceans or landfills, especially designed and designated hazardous to receive all the potential infectious and radioactive waste generated and monitored for leakage. Ultimately, where has all the costs, of this huge mountain of waste products fallen upon? The Government, also known as you and I.., our taxes.

I understand that all American businesses, view Uncle Sam, as having the biggest/deepest pockets, filled with unlimited amounts of money. Find where all the money is and find ways to tap into it. Legally or otherwise. Someone once asked a 1920’s Gangster, ‘why do you rob banks’, his reply? ‘Because that is where all the money is’ The medical industry, like most Capitalistic industries, are driven by profits, if your % earnings don’t increase significantly every quarter then get rid of the CEO, cut back the employees, reduce costs. Then Greed enters and becomes part of the equation. Free Capitalism at it’s best.

Posted by goguddy | Report as abusive

This is the medical world we live in. Life expectancy for white Americans living in the rural areas has dropped significantly, especially among poorly educated women. The main killer of middle age women in the areas I cover – 8 poor, rural counties in upstate New York and Pennsylvania is…prescription drug overdose or fatal interaction (poly-pharmacy). While some of this is intentional (suicide), most of this is accidental. The main drug group is prescription narcotics. Narcotic pain killers (opiates and synthetic opiates) are the cheapest to manufacture and the most profitable drugs for big Pharma. The fatalities I deal with may have a suitcase load of prescription drugs in their home – and yet no one in the home would have ever seen a dentist. The prescribing behavior of many providers – physicians, PAs and nurse practitioners is out of control. The situation is depressing and pathetic – and mostly preventable. Do any of you really think our elites intend to block this gold mine of profit which has the secondary benefit of winnowing out the surplus population and implement real health care reform for the citizens? Lets be serious.
OK, take Obama’s much publicized electronic medical record conversion for the nations hospital and clinics. Billions of taxpayer dollars have been spent subsidizing our hospitals and medical offices conversion to any one of the hundred plus medical information systems on the market. The result is a nightmare. The systems do not ‘talk to each other’, huge – really huge – mistakes are occurring – who know how many? Who cares?. Why were we forced to ‘purchase’ one of the Tower of Babel’ private systems – when the highly efficient, fully integrated system developed at the VA years ago was available for free? How could the lobbyists for the private medical software companies force their defective garbage on us – with billions of federal dollars attached?
It gets worse and worse. No one takes any responsibility for this multibillion dollar mess.
As a health care worker – I take some perverse comfort in the thought that our elites or their loved ones might just end up in one of our really dysfunctional emergency rooms and enjoy what the rest of us have to endure.

Posted by robinea | Report as abusive

The advent of health insurance as the middle entity heralded both the buyer and the supplier for the service we’ve termed health care. The health insurance industry is seen by the consumer as the provider of the service, while the health care provider sees insurance as the payer. It’s a market that’s rigged towards the middle at the expense of both poles, hence the expense.

Posted by Sarasota | Report as abusive

Why is this new news to Americans? My friend just paid 1200 USD cash for a 10-minute sunburn consult in Hawaii( 600 for the ER and 600 more for the doctor)!
What is your conclusion? Did/Will Obamacare solve this imbalance? Why is Medicare on the chopping block of the republicans in Congress if it is the only bright spot in the picture you paint?

Posted by codder | Report as abusive

I belong to a developing country and always hearing great system of government that is USA. In my ountry, a parliamentry democracy, people want to change to US system as our system has many problems. But learning and watching how USA runs its Healthcare and how powerful corporations subvert any attempt by Government to improve transparency, I feel it is good that we have not changed over to American capitalism.

Posted by candca | Report as abusive

Excellent article and I say that following the money, which is what exposed Watergate, illustrates the pure greed factor behind the abuses.

Having said that, I say it’s ridiculous to not blame the individual for their part of the problem. I know nurses who SHOULD be well aware of the horrible consequences of cigarette smoking, yet they still smoke. As I drive past a McDonald’s I see the obese and out of shape sitting in their cars munching sausage or burgers and drinking 32oz high fructose corn syrup.

Basically, people need to stop being so lazy and whinny. They have an enormous stake in their own healthcare. The biggest stake of all.

Fixing the problems with greed will not fix the problems with people not being responsible, but then again, aren’t greed, sloth, gluttony, and avarice four of the 7 deadly sins. Religion aside, much harm, personal and public, is the result of behavior that is bad. Only they themselves can exercise the self control to make change, even if that change is expressed as a collective a cooperative venture, it still starts with the individual.

Posted by unkjwea | Report as abusive