Friday, March 29, 2013

Asking the right questions

In an American hospital, the little gauze squares used to clean skin prior to an injection cost a patient the equivalent of $1,400 for a box of 200. Drugstores charge $1.91.

Surgical patients are asked to pay for the surgeon’s gown, the straps on the operating table, even for the metal cover over the lights, and that’s after paying a use charge for the operating theater that covers all those costs.

In the March 4 edition of Time magazine, investigative journalist Steve Brill enumerates all these charges, and dozens of other ways in which the American health care system eats up 20 percent of the U.S. gross national product in “Bitter Pill: Why Medical Bills Are Killing Us.”

Time devoted nearly the entire edition to this 5,000-word piece because Brill asked the question always overlooked as the country continues to debate over who should pay: Why do we pay so much?

Brill discovered there is nothing rational—no rhyme or reason—about the costs borne by consumers in a marketplace they enter through no choice of their own. He describes how hospitals use pricing databases called chargemasters, something similar to the price lists followed by auto body shops. Prices generated are incredibly high and nearly devoid of any calculation directly related to cost. 

Brill discovered that chargemaster prices are only the opening bid in negotiations that result in large discounts for major insurance companies. Patients are never told that they, too, can negotiate bills they receive.  

Brill discovered that thousands of nonprofit institutions providing health care, from smaller community hospitals to huge regional hospital systems, have morphed into high-profile, high-profit businesses. 

Brill discovered what he calls the “medical industrial complex” of health care lobbyists responsible for laws that prevent the government and other payers from negotiating lower prices. That results in a bill to the federal government each year of $15 billion for medical equipment like wheelchairs and oxygen tanks.

What it really means, however, is the that the un- and underinsured, and increasingly even the insured, pay ridiculously high prices. Health care in America is the ultimate seller’s market that amounts to what Brill deems a gold rush.

Brill’s article is a must read. He is not an advocate for a particular answer to the complex problems of health care in the U.S. Instead, he simply asks whether whoever pays has a fair chance in a fair market. It’s a question we should all be asking. “Bitter Pill” will help everyone ask it more intelligently.


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