Hullabaloo

Sunday, March 17, 2013

 
The health care costs are too damned high

by digby

This is a little bit late to the party, but on the off chance you didn't read Steven Brill's piece for Time Magazine on our insane health care system, if you have some time to spend with a long read, worthwhile.

The Hillman Foundation gave this piece a Sidney award this month:

The 24,105-word feature, the longest the magazine has ever published, explains the bewildering world of hospital billing. Brill spent seven months decoding the medical bills of real patients in an attempt to understand what Americans get for the estimated $2.8 trillion we will spend this year on health care.

Brill found hospitals charging $1.50 for a single generic Tylenol, $32 for the rental of a reusable blanket, and $13,702 for a drug that cost the hospital only $400. It's all part of a three-tiered system that offers deep discounts to Medicare and lesser breaks to private insurers but charges uninsured individuals the full internally listed price.

Many ostensibly non-profit hospitals are raking in even larger profits than their for-profit counterparts. These profits get reinvested in bigger buildings and more medical equipment, which encourage doctors to order even more tests, which generate even more profit for the hospitals.

"Bitter Pill explains how the medical industry subverts the free market by billing ordinary consumers exorbitant fees for whatever services the doctor says they need with no leverage to negotiate the price," said Sidney judge Lindsay Beyerstein. "The patient is truly at the mercy of the industry."

This is a quote from Brill from an earlier interview:

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. [...]

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?

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 health care 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 health care 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, health care 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.

Many health care experts have studied this for years and Brill very ably synthesizes their work along with his own reporting. But honestly, isn't this just common sense? Of course there cannot be a free market in health care --- the buyer is incapable of making an informed choice and has no idea what the value of what she's buying. This doesn't seem confusing to me, but most people seem to find it extremely complicated requiring study after study. It's quite clear we must do --- set prices. I know that an insult to the Market Gods, and I'm sure I'll be struck dead any minute for even thinking it. But that's what has to happen.

Brill doesn't come right out an say that we should have a single payer system, but it's hard to come up with any other conclusion.

Anyway, read the piece if you have the time. It's nothing your intelligent intuition didn't already tell you but it's well put together and interesting.

.

digby 3/17/2013 12:00:00 PM