The killing prices

Posted: 25 February 2013 in Uncategorized
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I don’t often recommend stories that appear in Time. But Steven Brill’s exposé of the healthcare industry in the United States is worth a careful read.

Brill sets out to answer what should be the first question of healthcare reform in the United States: why exactly are the bills so high?

What are the reasons, good or bad, that cancer means a half-million- or million-dollar tab? Why should a trip to the emergency room for chest pains that turn out to be indigestion bring a bill that can exceed the cost of a semester of college? What makes a single dose of even the most wonderful wonder drug cost thousands of dollars? Why does simple lab work done during a few days in a hospital cost more than a car? And what is so different about the medical ecosystem that causes technology advances to drive bills up instead of down?

What he finds is a “a uniquely American gold rush” on the part of corporations—both profit and nominally non-profit, from drugs through hospitals to billing services—that provide healthcare commodities that, in the end, leads to much higher prices than in other countries for results that are much less than 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.

Brill’s conclusion is that Obamacare only works around the edges of the core problem.

Put simply, with Obamacare we’ve changed the rules related to who pays for what, but we haven’t done much to change the prices we pay.

When you follow the money, you see the choices we’ve made, knowingly or unknowingly.

Over the past few decades, we’ve enriched the labs, drug companies, medical device makers, hospital administrators and purveyors of CT scans, MRIs, canes and wheelchairs. Meanwhile, we’ve squeezed the doctors who don’t own their own clinics, don’t work as drug or device consultants or don’t otherwise game a system that is so gameable. And of course, we’ve squeezed everyone outside the system who gets stuck with the bills.

We’ve created a secure, prosperous island in an economy that is suffering under the weight of the riches those on the island extract.

And we’ve allowed those on the island and their lobbyists and allies to control the debate, diverting us from what Gerard Anderson, a health care economist at the Johns Hopkins Bloomberg School of Public Health, says is the obvious and only issue: “All the prices are too damn high.”

U.S. workers are being forced to pay for increasingly high health insurance premia and healthcare prices out of their stagnant wages, while U.S. corporations are resisting paying any more out of their gross profits to purchase health insurance for their workers. Something has to give, which means going beyond Obamacare to finally create a decent, affordable healthcare system in the United States—a system in which doctors and nurses can actually do their jobs and the broad masses of people have a say in how their healthcare is provided.

  1. sharonsj says:

    What did you expect when Congress is for sale to the highest bidder? Those s.o.b.s get the best health care for the rest of their lives, provided for by the taxpayers or their next corporate master, while the rest of us go without or go broke.

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