You can easily judge the character of others
by how they treat those
who can do nothing for them or to them.
Malcolm Forbes
Steven Brill, "Bitter Pill: Why Medical Bills Are Killing Us":
Thumbs DOWN
There are parts of this article I like-- in particular, how individual patients, without pricing power of insurance groups or the government, face incomprehensible bills, absurd markups of items you could get in any drugstore much cheaper than a hospital with its economies of scale, apples-to-apples markups of not just single or double percentages over favored group prices--but MULTIPLES of prices/costs.
Part of the problem is cost-shifting, and another problem is imperfect information. For example, one time I had to have a medical test done, I was initially given a $300 estimate from the doctor's office, it had gone up to $375 for a preliminary payment when I went to the hospital, and then I got a follow-up bill for another $50-75. (Incidentally, there are some web resources, like healthcarebluebook.com, which provides some "fair price" information and some practical guidance here). Of course, shopping for medical care isn't like buying a new car where you can shop across dealerships or even hire a price-negotiating service; when you're ill, your options narrow.
His discussion of the chargemaster is good:
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. However, I quickly found that although every hospital has a chargemaster, officials treat it as if it were an eccentric uncle living in the attic. Whenever I asked, they deflected all conversation away from it. They even argued that it is irrelevant. I soon found that they have good reason to hope that outsiders pay no attention to the chargemaster or the process that produces it. For there seems to be no process, no rationale, behind the core document that is the basis for hundreds of billions of dollars in health care bills. According to [one] hospital's latest [government] filing (covering 2010), its total expenses for laboratory work (like Janice S.'s blood tests) in the 12 months covered by the report were $27.5 million. Its total charges were $293.2 million. That means it charged about 11 times its costs. [Self-pay] patients are asked to pay the chargemaster list prices. 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.I also think that he makes a good point about physician objectivity, crying out for professional ethics reform:
In 2008, Gregory Demske, an assistant inspector general at the Department of Health and Human Services, told a Senate committee that "physicians routinely receive substantial compensation from medical-device companies through stock options, royalty agreements, consulting agreements, research grants and fellowships."I also give him credit for taking on nonprofits, at one point pointing out when you adjust for their tax-exempt status, nonprofit hospitals can do as well, if not better. And unlike most progressives, he doesn't make a straw man of health insurance companies; to be sure, they have purchasing power beyond Brill's cases of lower-insured/uninsured patients, but he sees them as increasingly having to dicker off chargemaster instead of an offset off government prices, in theory based off actual hospital costs.
His examples are poignant, particularly the widow whose dying husband's medical costs left the family in six-figure debt; she's resigned herself to never remarrying because any future husband would have to take on his debt.
Where Brill starts to lose me is when he starts retreating into predictable talking points like this:
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.Let me list a few other sore points:
- Like other progressives, Brill is obsessed with the Politics of Envy. He's constantly rattling off huge hospital administrator salaries, impressive but expensive medical complexes, etc. I would need to know a lot more information than he discusses in the article to judge the relevance of salaries: overall costs, enterprise performance, growth, industry statistics, comparative executive compensation, etc. Good managers pay for themselves in improved performance. He seems to suggest that the cost shifting is to executive pay and hospital empire building.
- Brill has an agenda. He's particularly enamored with Medicare (he thinks Medicaid gets short shrift because Medicare has politically powerful seniors behind it and insurance providers under ObamaCare still have to battle chargemaster). It's a rather confused argument because he readily admits Medicare has blown past budget projections from the get-go. Among other things, he is dismissive of the argument that providers lose money on Medicare patients, quoting a source saying Florida has expanding hospitals overflowing with them. This is simply a state of denial. Avik Roy argues "the biggest driver of hospitals’ predatory behavior is an even larger predator: the federal government.." He points out MedPAC, an independent government agency, concludes nearly 2 of 3 hospitals lose money on Medicare patients, which has promoted industry consolidation, lowering competition. Consolidation provides more leverage against insurance providers.
- Conover does a good job here discussing Brill's use of apples-to-oranges statistics in international comparisons. For example, the implication is that our health care system is responsible for adverse comparisons (we have comparably high deaths due to violent crime, suicide and auto accidents, beyond the scope of the healthcare system). He also argues against the comparative study on prescription drugs, pointing out the opportunity costs of overseas regulations, cheaper generics here, and a conceptual confusion between average and marginal costs. In a followup piece, Conover points out inpatient profit margins are just 2%, industry profits are lower than in other industries and refutes the myth that Medicare administration costs are much better than the industry. Elsewhere he's described a 44 cent loss to GDP for each dollar taken in the form of taxes. The AHA has also posted a rebuttal here.
Department of Energy?
A sore point for me was Scott Brown's recent guest talking points memo on The O'Reilly Factor during which he cited "our energy policy or lack thereof" as a joke. I need fuller context of what he means by 'policy'. We have an ideological anti-fossil fuel administration which keeps most public land all but closed for new exploration, arbitrarily shut down drilling in the Gulf of Mexico, delays or vetoes new pipelines and refineries, and restricts or forbids exports of oil and gas. The last thing we need, Sen. Brown, is some megalomaniac attempt by the government to micromanage the free market.
Political Humor
The latest parody from Remy....
Musical Interlude: My Favorite Groups
Kiss, "I Was Made For Loving You". From the end of my CSN series to my next group Kiss, starting with my favorite, their highest charting hit, except for one ballad.
